When you own a home, you depend on your appliances and home systems to work reliably. But when they don’t, a home warranty can significantly ease the financial burden of repairing or replacing the faulty components — as long as you choose the right one.
Shopping for a home warranty is the same as making any other major purchase. You need to make sure you’re purchasing coverage from a reputable company. You also need to know what you’re getting, so you can make the most of your policy. And, of course, you may need to ask about additional coverage for your pool, hot tub or other specialized home system. Here’s what to look for in your home warranty.
Investigate the Provider’s Reputation
Before you purchase a home warranty from a specific company, do your research to make sure the provider is reputable. You can look up online reviews to make sure that other customers have been satisfied with the service, but don’t stop there. Contact your state’s consumer protection organization, insurance commissioner and attorney general to make sure no serious complaints have been lodged against the provider you’re considering.
Know What the Policy Covers
Usually, when a homeowner is unhappy with the coverage offered by his or her home warranty policy, it’s because he or she had unrealistic expectations of the provider. You can prevent this by asking lots of questions about what your prospective policy will cover. Ask what home systems and appliances are covered, as well as some of the following questions:
- If an appliance must be replaced, will the policy cover an equivalent model?
- What are the exclusions and limitations of the policy?
- Are there routine maintenance obligations that I must meet if I want the policy to cover repair or replacement of an appliance or system? If so, what are they?
- Are there limits on how much the plan will pay per covered item or per policy period?
- Under what circumstances will a broken appliance or system be repaired rather than replaced?
- How much is the service call fee? Do I pay it each time the contractor comes out, even for the same issue?
- What other additional expenses might I have to pay?
- What contractors will be used to handle any issues?
Make sure to read the fine print when you buy a home warranty. Most warranties will cover appliances and home systems like HVAC and electrical but may not cover repairs to structural elements of your home. Often, your homeowner’s insurance will cover what your home warranty policy does not, and vice versa.
Ask About Additional Coverage to Meet Your Needs
Most home warranty providers offer a range of plans from basic coverage for a single appliance or system to premium plans that cover HVAC, electrical, some plumbing repairs, kitchen appliances, pools, hot tubs and more. Your needs will depend on what home systems and appliances you want to cover. When you buy a home warranty, ask the provider about extending your coverage, if necessary, to encompass your hot tub, sauna, pool, sprinkler system or other less common home systems and appliances.
You can add specific appliances or systems to your home warranty for an additional yearly fee, but a basic plan typically costs about $500 a year. In addition to customizing your coverage, you can also adjust your payment schedule to meet your needs if a yearly lump sum is too difficult to fit into your budget. If you would like to extend your warranty coverage over multiple years, ask about multi-year coverage discounts.
A home warranty is a service contract that helps you offset the cost of home repairs and maintenance by sharing them with an insurance provider. Buy your home warranty from a reputable provider who can offer you the coverage you need for all your home’s systems and appliances. Shopping around might take some extra time, but it’ll be worth it. A home warranty that doesn’t meet your needs or provide the coverage you expect is worse than no home warranty at all. Know what to look for, so you can reap the financial and psychological benefits of being protected in the case of emergency.