Home warranties are a great way to protect your home investment. But choosing the right one can be tricky.
The key is to assess your needs and understand the limitations of each plan. Start by making an inventory of your home appliances and systems.
Make sure to ask about any coverage limits, actions that will void your warranty, and how the process works for cancellations and claims. People often ask, “Is home warranty and home insurance the same?” Be sure you understand the difference between the two before making any purchases.
- What is a home warranty?
A home warranty is a service contract that covers the cost of repair or replacement for appliances and systems in your home that break down from normal wear and tear. A home warranty typically doesn’t cover windows, doors or flooring. New construction homes often come with a builder warranty, and credit cards sometimes offer extended warranties on appliance purchases.
You should carefully review any home warranty provider’s contract, which will usually include a description of what is and isn’t covered, as well as actions that could void the coverage. Then decide if a home warranty is right for you.
- What are the benefits of a home warranty?
A home warranty provides new homeowners with peace of mind and budget protection. It can also help avoid buyer’s remorse after a move-in and provide a safety net against expensive repairs.
For the cost of a service fee, a home warranty can help homeowners cover unexpected expenses and safeguard their investments. It can be a valuable addition to existing homeowners insurance and may even improve the resale value of a property. However, it’s essential to read sample contracts and understand what each provider covers before purchasing a home warranty.
- How much does a home warranty cost?
Home warranties cost several hundred dollars a year, paid either up-front or in monthly installments. They also come with service fees when you need to call in a professional for repairs.
A warranty deductible may also apply. It is important to read the contract carefully, including what is covered, actions that can void the warranty, and caps on how much the company will pay per item or repair.
Buyers sometimes ask sellers for a home warranty as part of the sale process to help cover costs they may not be prepared for. It is up to the buyers and sellers to decide if it makes sense for both parties.
- What is the waiting period?
Like many insurance policies, home warranties have a waiting period. This is to ensure that homeowners aren’t purchasing warranties in order to claim repairs on pre-existing issues.
The waiting period typically lasts 30 days and is used to verify that all systems are functioning properly. It also helps to filter out fraudulent claims. If a homeowner is planning to sell their home in the future, a warranty with a zero-waiting-period may make them more appealing to potential buyers. This is because it provides a sense of security for buyers that all appliances and systems are covered.
- What are the coverage limits?
Home warranties typically come with limits that determine how much a company will pay to repair or replace a covered item. These limits vary by company and plan level.
These limits help to keep plans affordable for the largest number of homeowners. They also protect homeowners from incurring the full cost of unusually expensive claims.
Companies have numerous plan options that allow consumers to personalize their coverage for peace of mind at an affordable price. This includes a variety of plans with raised payout caps and options to cover pre-existing conditions.
- Is the provider licensed and bonded?
Home warranty companies typically outsource their work to local contractors, and you should ask who they are and how they are vetted. Look for a provider that has a process for stopping contractors who don’t perform well.
You should also ask about any maintenance requirements for covered items. Some providers have strict upkeep requirements that can lead to coverage denials if they aren’t met.
Finally, you should check the provider’s reputation and customer reviews. You can do this by reading consumer reviews on third-party sites such as Google Reviews, Better Business Bureau and Trustpilot.
- How do I make a claim?
As you explore home warranty providers, ask about their claims process. Look for information about the deductibles and what types of items are covered. You can also ask about how long it usually takes to get a repair or replacement completed.
Also, check for limitations and exclusions. These are specific parts, items and situations that a warranty doesn’t cover. Some may include things like preexisting conditions and improper maintenance. You should be aware of them so that you don’t get surprised by cost gaps. You can also ask about the company’s list of contractors and how they are chosen.
Keep in mind that all companies offer different warranties so be sure to check your warranty and know what it offers.