Tips for a Wise Home Warranty Buyer
Your home is one of your most valuable investments; protecting your home makes financial sense. Finding the right home warranty means getting the two “Cs” right: Coverage and Company.
Home Warranty Coverage
Home warranty coverage can provide an added layer of financial protection if a covered appliance or home system suddenly fails. But the benefits of home warranty coverage does not stop there.
protects your budget from costly repairs on covered items.provides an easy, time-saving way to find service providers when a covered item breaks down.provides the security of unlimited service calls and flexibility of 24/7 service requests.
Home warranties are designed to cover the repair and replacement of mechanical and electrical systems, such as air conditioning, plumbing, garage doors, and other predefined home features.
While there are “new home warranties” that cover new home builds and the materials of a brand-new structure, that is just one type of warranty available. In fact, most warranties purchased by consumers are for existing homes and the appliances, also known as “service contracts”.
There are many warranty companies that offer competitive warranties for older, well-maintained home and appliances. Do keep in mind, home warranties do not cover the cost of repair or replacement of items that were damaged before the warranty went into effect, and the burden to prove when the damage happened is your responsibility.
Warranties do not replace insurance
Home warranties do not replace the need for home insurance. Home insurance is designed to cover unexpected loss or disaster such as fire or robbery. Home warranty works in combination with home insurance to protect you from large unexpected expenses.
Home Warranty Limitations
Home Warranty coverage is designed to replace the higher expense parts and components of your appliances, such as motors, heaters, or fans. Warranty coverage is less likely to pay for ancillary items such as knobs, buttons and cosmetic trim.
Home warranties do not cover pre-existing conditions. For example, if your garbage disposal motor stops working and it wasn’t caught during your recent pre-move inspection, it likely will not be covered. Also, keep in mind that home warranties repair or replace the covered item with like-kind quality; you would need to pay for the costs of the improved quality replacement product should you desire to upgrade during the claim process.
Nice to know: According to the FTC, the Federal Housing Authority and the Department of Veterans’ Affairs require new home builders to purchase warranties to protect buyers of new homes with FHA or VA loans.
Home Warranty Coverage
Home Warranty Costs
Warranty companies contract with qualified trade service providers in your local area. If a problem with your home results in a call to your home warranty company, you will likely be charged a “service call fee”. The service fee is in addition to the premium for your warranty policy. The service call is required to determine if the repair will be covered by your warranty and the service providers are generally very helpful and knowledgeable about how to best solve the issue at hand. This service call fee is generally $75 or less and due at the time of service and payable direct to the service provider. Check your contract for your service call fee in your warranty contract and confirm the service fee at the time you make a warranty service call.
Most warranties are charged up-front as a one-year contract; however, more warranty companies today are offering installments plans. Your warranty company will generally give you the option to purchase additional coverage for additional exposures such as pools, spas, freezers, or other items that are not considered “standard”. Consider the extra cost for the expanded coverage and determine whether it makes financial sense.
Home Warranty Coverage Warning
While most Warranty companies are reputable and provide transparent information on the exact home system, appliance and coverage details, we encourage you to read the warranty contract before buying. Print or keep an electronic copy of your warranty contract to prove the coverage at the time you purchased your service plan.
Home Insurance generally covers your home largest exposures; structure, attached structures, and personal belongings. In the case of a coverage overlap, most warranty and insurance policies have contract language outlining that they will not pay for claims that are covered by another policy/contract therefore, you will be covered by your warranty or insurance company not both.
Top Recommended Home Warranty Companies
First American Home Warranty
American Residential Warranty
America’s 1st Choice Home Club
American Home Shield
“Predicting when a home system or appliance might suddenly fail is as difficult as predicting the weather. But when those unexpected breakdowns are covered by a home warranty everyone benefits