Owning a home can be costly. With mandatory expenses, such as homeowners insurance and homeowners association fees, you may wonder whether optional coverage, like a home protection plan, is worth adding to your budget.

However, a home protection plan might be an investment that could pay off over time by protecting your budget from unexpected costs. Keep reading to learn more about whether a home protection plan is right for you.

What is a home protection plan?

A home protection plan is an annual service agreement that helps cover repairs and replacements of major systems or appliances (or both) in your home. Much like insurance, you will typically pay a monthly premium for the coverage, but when issues occur, you may only need to pay a set service call fee (or deductible). Your home protection plan will then help cover the rest of the expenses related to the issue if the diagnosed failure is covered by your plan's terms.

It is most common for home protection plans to cover large kitchen and laundry appliances, such as washers/dryers, ovens, refrigerators and dishwashers. If you opt for a plan that protects home systems, your heating, cooling, plumbing and electrical systems will likely be covered as well. You may also have the option to add coverage for other items, such as spas, swimming pools or gas lines.

Do you need a home protection plan if you already have homeowners insurance?

Home protection plans pick up where homeowners insurance usually drops off. Homeowners insurance will generally protect you from damage to your home and belongings resulting from accidents, theft and natural disasters.

Home protection plans cover appliance and system breakdowns due to wear and tear and mechanical failures. They are complementary types of coverage, and having both can help you avoid suffering from financially devastating home expenses.

It's also important to note that a home protection plan is different from a manufacturer’s warranty, which often has an expiration date and may not cover all parts and labor. Additionally, most manufacturers’ warranties are offered per item.

Instead of paying for individual coverage per item, a home protection plan gives you the option to cover a wide variety of items, across an array of brands, under a single plan.

How does a home protection plan work?

Home protection plans simplify the process of dealing with a breakdown in the home. Say you are about to make dinner, but your oven won’t heat up. Without a home protection plan, you would have to research appliance repair companies in your area, find one that’s available and pay for the entire cost of the visit, the parts and the labor out of pocket.

With a home protection plan, however, you would typically report the issue to the company providing your plan to request service. The home protection plan company would then locate an available and reliable service provider to evaluate and complete the job for you. Then, regardless of the overall cost of the work, you may only owe your set service call fee for the work covered by your plan; the home protection plan company could pay the rest!

Because repairs and replacements can cost hundreds to thousands of dollars, a home protection plan can end up paying for itself with just one to two service requests. A small monthly cost can be easier to factor into your budget than an expensive repair or replacement that takes you by surprise.

What are the features and benefits of a home protection plan?

The top advantages of having a home protection plan are the budget protection and peace of mind that come with knowing you have a game plan for when your appliances and systems break down. But there are a number of other less-intuitive benefits that you may not realize a home protection plan can provide.

Access to vetted service providers

If you don’t already have a service provider you trust, the task of finding one can be daunting. It can take hours of researching online and calling around, and there are still no guarantees that the work needed will be done correctly. A home protection plan solves this problem because the home protection plan company researches and vets providers in your area who are standing by to help.

Service guarantees

Many home protection plan companies provide workmanship guarantees that are longer than those offered by individual service providers. While individual providers may only cover their work for 30 days or may not offer a guarantee at all, some home protection plans come with guarantees of up to 60, 90 or even 180 days. This means that if the same covered issue you already received work for reoccurs within that time period, the home protection plan will cover repair costs.

Rental damage control

If you are the owner of any rental properties, you may want to consider investing in a home protection plan for the property, which might help repair wear and tear to any covered systems and appliances caused by tenants.

Property appeal

If your home is on the market (or you plan to sell it soon), having a home protection plan on the property can be a great selling point for potential buyers. It helps put their mind at ease that if anything breaks down after the sale, they can rely on the plan to help reduce additional costs.

Ancillary benefits

Many home protection plans come with extra benefits related to home care, such as maintenance tips and access to special discounts. Make sure to do your research and read your plan materials carefully to ensure you take full advantage of everything your home protection plan offers.

Which home protection plan should you choose?

When choosing a home protection plan, make sure that the coverage you need is provided at a price with which you are comfortable. Confirm that service providers will be available in your area and be sure to choose a plan with features and benefits that appeal most to you.

RBFCU Insurance Agency partners with Cinch Home Services to offer home protection plans to our members. Serving customers for 45 years, Cinch offers an industry-leading 180-day workmanship guarantee on all covered repairs. With three plans to choose from and a host of benefits, they are a solid choice for the peace of mind that comes with having home protection.