What Are You Risking When You Don’t Have a Home Service Contract?

One of the best things you can do to safeguard your financial future is avoid risks that will blow up your budget. The hardest expenses to avoid are the ones that you don’t see coming. Things like broken or malfunctioning appliances are often overlooked when planning for emergencies but can cost a pretty penny to fix. When an appliance or system is integral to your daily life, there’s no time to delay a repair or replacement. According to a recent study conducted by SCIC, 75% of people feel anxious about the possibility of an unexpected repair cost.

And that worry is well founded! Even if you’ve never had a problem with one of your home appliances, odds are you may encounter issues at some point. In fact, many appliances that are essential to your comfort and routine tend to break down within the first five years:

• Air conditioners: 46%
• Laundry machines: 47%
• Refrigerators: 40%
• Dishwashers: 30%
• Over-the-range microwaves: 25%

Having to deal with the anxiety of an unexpected breakdown is bad enough without fretting about the cost, and these things can get pricey. Without a home service contract to help mitigate the cost, even small appliances could cost up to $1,200 to replace.

• Microwave: $300-$600
• Dishwasher: $700-$1,000
• Dryer: $800-$1,200
• Washer (top/front load): $800-$1,200
• Refrigerator: $1,800-$2,500

Larger-scale systems can get even more costly to replace. Did you know a new HVAC system can cost up to $9,000 – and a plumbing system replacement can reach $10,000? With systems as essential as these, a fix can’t be put off until you have had time to save. According to the U.S. Federal Reserve’s recent Survey of Household Economics and Decisionmaking, 37% of people are not able to cover a $400 emergency expense. That means these types of large expenditures would likely need to be paid for with credit cards – leaving homeowners vulnerable to high interest rates over many monthly payments.

What can you do to avoid these unexpected situations? A home service contract can cover some or all of the cost of a replacement or repair for appliances and systems around your home, thereby protecting your budget and your pocketbook. Check out this link for SCIC’s basic information on home service contracts and a helpful list of providers to explore available products.

Note: Replacement costs are based on pricing data from a combination of reliable sources in retail, home service and consumer data.