Home warranty companies sell contracts to cover repairs and replacements on a wide range of systems and appliances. While these warranties can be a valuable investment, buyers should carefully review contracts for hidden costs and restrictions. Look for a reputable company who has years of experience.
1. How Much Does the Warranty Cost?
Home warranties can cost a fair amount, but they’re worth it if they save homeowners money in the long run. The price of a home warranty depends on the location, coverage and service fee.
Some plans may have a per-item or overall payout limit, which is something homeowners should be aware of. For instance, a standard contract may only pay up to $1,000 for a broken septic system or plumbing issue.
A warranty can be upgraded to cover add-on items such as a pool, guest unit, spare refrigerator and pest control services for an additional fee that typically ranges from a few dollars per month to $30 or more.
2. What Kinds of Repairs Does the Warranty Cover?
Does home warranty cover plumbing leaks? From electrical to plumbing, every home warranty company’s coverages are different so be sure to check for the specific coverage you need. Home warranties cover repairs and replacements for certain systems, appliances and components. Ask each provider what is included and what is not. Home warranty providers usually do not include cosmetic damage, such as a chipped dishwasher door.
Some companies also have appliance age or maintenance stipulations for specific items, which homeowners should be aware of before purchasing a warranty.
You should also find out which local contractors your warranty company uses. These contractors typically receive discounted prices on parts and labor and will handle your warranty claim. Ask the warranty provider who their contractors are and how they vet them.
Every company is different so be sure to check with each company to see what is covered.
3. What Are the Coverage Limits?
Home warranties typically come with set limits on the amount they will pay for repairs and replacements. These limits vary by company and by plan. Some companies offer much higher coverage limits than others.
Shoppers should review the contract closely to see these limitations. They can also request quotes from multiple companies to compare their options.
4. Is the Provider Licensed and Bonded?
A license means that the business is able to accept financial responsibility in the case of damage or injury to persons or property. It is also important to ensure that the company is bonded.
You can find this information by checking online sources like the Better Business Bureau. Be wary of a warranty company that only provides glowing testimonials on its website and avoid those with one-star ratings.
Many home warranty companies offer sample contracts for buyers to look at before they sign up. These will not fully reflect the final contract you’ll receive but can provide you with an idea of what to expect.
5. How Long Is the Waiting Period?
Many home warranty providers require a waiting period before they will cover a home system or appliance. This time frame allows them to verify that the system or appliance was working correctly when the warranty was purchased. It also helps to weed out fraudulent claims.
During this time, it is important to shop around and compare pricing from different providers. Check out a company’s Better Business Bureau rating and read customer reviews online before making a decision. For new homeowners, the waiting period may be waived if they purchase the warranty during the closing process of their home.
6. How Does the Claims Process Work?
Home warranties can offer peace of mind to new homeowners who may not know how well a home has been maintained or might not be able to afford regular maintenance. However, home warranty contracts typically don’t cover components that haven’t been properly maintained, and homeowners must understand the coverage limits.
To evaluate home warranty companies, it’s important to read customer reviews and Better Business Bureau ratings. Look for companies that have a high number of positive customer testimonials. Also, determine if the company offers aggregate coverage limits or per-item limitations.
7. Which Contractors Does the Warranty Company Use?
Home warranties typically partner with local contractors throughout the states they operate in. When you submit a claim, the warranty company will send one of these contractors to evaluate and repair or replace your covered item. Ask if the
company’s contractors are licensed and bonded, what qualifications they need to have, and how the company vets them and addresses contractor complaints.
Home warranties can be an important investment, saving you thousands of dollars in out-of-pocket repair costs and increasing the value of your home if you ever decide to sell it. Use these essential questions to compare providers and pick the right one for your needs.
