Purchasing a home, particularly when you’ve gone from renting to owning, can be stressful, especially when it comes to managing a new budget. Added regular expenses of property taxes, mortgage payments, utilities, and insurance alongside unexpected repairs and maintenance on a home can seem overwhelming to a homebuyer.
Since homebuyers, particularly those in competitive markets like Toronto, have budgeted so much of their savings to bring the biggest possible down payment to the table and other closing costs, the unexpected expenses can add a significant strain to their budget. According to a 2018 survey conducted by The Canadian Payroll Association, "One in 5 working Canadians say they could not come up with just $2,000 within a month for an emergency expense." Unexpected expenses of this financial scope aren’t all that uncommon. Alan Carson of Carson Dunlop says,
It can be catastrophic if the furnace or air-conditioner quits unexpectedly, or if the refrigerator or the water heater breaks down. The Home Care Plan not only provides great financial protection against significant costs, it also provides peace of mind, and eliminates the frantic search for a competent fair-priced repair person on short notice.
The Home Care Plan is tied in with their home inspections and helps alleviate some of the guesswork and the need to rely on an emergency fund. Alan says:
A home inspection does an amazing job of describing the present condition of a home. The Home Care Plan picks up where the home inspection leaves off, and protects our clients into the future. We have been involved with home warranties and similar plans for over 25 years and have never seen one that compares to this.
You don’t just need to be a new home buyer to benefit from this extensive service plan. The Home Care Plan is available to anyone who has hired a Carson Dunlop inspection within the past 12 months. Not only do home inspections help current and prospective owners understand potential issues in their homes, identifying them before they become major ones, but they also help people plan their spending. This way people have the comfort of being able to allocate their savings towards home improvements and renovations, instead of simple repairs and appliance maintenance.
The most common claims put through The Home Care Plan are appliances, with dishwashers and refrigerators at the top the list. Without this plan homeowners can usually expect to pay several hundred dollars per repair. The average rate of claim for clients is once, every other year, with the cost of the annual renewal not increasing for those who have made a claim. Alan says,
Because this is an insurance policy, it expires every year, like your automobile or homeowner’s insurance policy. However, it automatically renews, and you continue to pay the $27 per month. You will receive a notice and a new policy document once a year.
A Small Monthly Fee
Whether you’re still climbing the ladder at work, or are retired and on a fixed income, The Home Care Plan is only $27 a month and can easily fit into a variety of budgets. Alan adds,
The $27 a month payment removes so many risks, from the heating and cooling systems, to appliances, to plumbing and electrical issues. A new furnace may cost $5,000 or more. That is a significant hardship for people on a fixed income. The Home Care Plan covers those unexpected expenses.
The plan also covers the water heater (unless it is rented), the dishwasher, stove, refrigerator, clothes washer and dryer, and additional coverage for emergency plumbing repairs, the whirlpool bath, sump pump, central vacuum system and garage door opener. Alan says, "A failed main sewer line under the front lawn typically costs $2500 to replace. The Plan provides coverage for that."
Is It Worth It for Condo Owners?
Many condo owners don’t realize it, but they are often responsible for maintaining the heating and cooling systems within their units. So, they are responsible for maintenance beyond basic appliances. It’s estimated that the replacement of heating and cooling units can cost upwards of $5000 to $10,000. Alan says, "One might argue against purchasing the Plan in the first year, since many things are under warranty. However, most appliance warranties only provide 12 months’ coverage. Extended warranties are very expensive. We strongly encourage people to purchase the Home Care Plan before the first anniversary of a new build, and within 12 months of their home inspection."
Getting Up Front with The Small Print
There are some items that will not be covered in your plan. Alan says,
Components that are non-functional or beyond their typical life expectancy are excluded from coverage. However, if those components are repaired or replaced, they are then covered under the Plan.
If a component or appliance cannot be repaired because the parts are not available, or when the cost of the repair exceeds the replacement cost, The Home Care Plan provides a fair market cash settlement for the item, and the home owner is able to replace it with the same or a different brand component/appliance.
Flexibility is one of the many benefits of The Home Care Plan, particularly for those who have two of the same items requiring coverage. Alan says,
Some homes have two furnaces, two air-conditioners or two refrigerators. The Plan only covers one of those, but the good news is that you don't have to decide which one to cover until you have a problem. The Plan addresses the first appliance to need repair.