Rising Demand For Home Protection Plans Drives The Home Warranty Service Market
Home warranty services have grown surprisingly popular in the last couple of years as more and more homeowners becomes aware of the benefits of these services. According to a recent study by Allied Market Research quoted on einnews, the global home warranty service market was worth $7,315.1 million in 2020 and is predicted to grow to $13,611.2 million by 2030, growing at a 6.3% CAGR from 2021 to 2030.
A home warranty is a legal agreement between a homeowner and a service provider that ensures both the maintenance and replacement of home systems and appliances in the event of typical wear and tear. The increasing need for home protection plans and increased homeowner awareness of the benefits of these plans are said to be the reason behind the recent growth in this industry.
Market Determinants and Trends
The expansion of the home warranty service industry is owed to a variety of reasons, including rising demand for home protection plans, the increasing price of home repairs and replacements, and rising homeowner awareness of the numerous advantages of such policies. Popular online searches on the topic include such questions as: are home warranties worth it? Or does home warranty cover AC, smart TVs, and other modern home gadgets? The demand for home warranty services is also considerably boosted by the fact that the home appliances in many homes across the country are starting to age, becoming more susceptible to malfunctions and requiring more upkeep.
There is also a noticeable shift towards customization in home warranty service as service providers now provide customized plans that meet the specific demands of homeowners. Some service providers, for example, offer plans that only protect major systems and appliances, whilst others offer full plans that cover all major and small systems and appliances.
COPYRIGHT_WI: Published on https://washingtonindependent.com/rising-demand-for-home-protection-plans-drives-the-home-warranty-service-market/ by Emmanuella Shea on 2023-04-24T08:53:25.247Z
The growing popularity of smart home technologies is also likely to open up new prospects in the sector. Thermostats, security systems, and water sensors are examples of smart home equipment that can assist homeowners in identifying and avoiding problems before they become serious issues. Some top home warranty service providers are already providing plans that include cover for smart home devices, which is expected to become more prevalent in the near future.
Are Home Warranties Worth it?
Many home owners worry that they may spend money on home warranties and never have to use the service. However, the only way a home warranty service subscription will go to waste is if appliances in the home never break down. Furnaces break down, pipes burst, washing machines and driers decide to pack up at the most inconvenient of times, so there will always be use for a home warranty service. These services cover the cost of these appliance breakdowns saving the owner the stress of paying out of pocket.
According the Allied Market Study, The global home warranty services sector is highly competitive, with multiple participants in the industry. The market is marked by fierce rivalry, and high market penetration. As a result, established market participants' profit margins have shrunk.
Another difficulty in the market is the exorbitant price of labor and materials. The cost of labor and materials needed for maintenance and replacements, have increased tremendously over the years resulting in a decline in the profit margins of service providers. In spite of all these, an Ibis World report reveals that the home warranty services industry in the US outperformed other US industries in the last 5 years.
As smart home technology becomes more popular, new opportunities in the home warranty sector are projected to emerge. Service providers can sell plans that cover smart home devices as well as real-time surveillance and preventive maintenance to homeowners. Incorporation of machine learning as well as AI technology can also assist service providers in detecting and preventing problems before they become significant breakdowns.
The increase of home automation systems is also projected to open up new industry prospects. Home automation systems enable homeowners to operate and monitor their houses' different systems and appliances, making it simpler to recognize and avoid problems. Some service providers are currently offering plans that include coverage for home automation systems, which is expected to become more prevalent in the near future.
What Does a Home Warranty Policy Cover?
People frequently ask if a home insurance policy is the same as a home warranty policy and the answer is no. These two policies do not replace each other and need to be purchased side by side. What your home warranty policy covers depends on the kind of plan you pay for. Some plans will cover just the basic components of most homes such as electrical units, heating and plumbing. Other plans would include more appliances such as the washer, drier, dishwasher etc. Some plans allow you to include appliances you want covered. Home warranty policies do not cover structural issues in the home and other similar issues.
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