A home warranty is a contract between you and a home warranty company that covers repairs and replacements on systems and appliances in your home. Most home warranty companies offer the contract for a period of one year. The contract covers all parts of your home’s electrical, plumbing, heating, and air conditioning units.
Most homeowners confuse between a home warranty and insurance. While a warranty protects your appliances from breakdowns, insurance covers damages and losses caused by unexpected events like fires and weather. If you are on the market for a home warranty, picking the first available or cheapest one may seem easier.
However, research can help you choose the best home warranty plan, coverage, and price for your home. Here is what to look for in the best home warranty companies.
1. Proximity. The first thing to look for when shopping for a home warranty is the nearness to where you live. You wind many national players that provide home warranty services nationally.
However, look for a local company to see your coverage options. Request quotes from three local companies, and compare the plans and pricing. You can also request a sample contract form to see the contract type you will be entering once you purchase the home warranty.
2. Your Needs. After identifying a list of local companies and the coverage they offer, look at your home and write all the items that are likely to fail quickly. If you buy a new home, you can get this information from your agent or seller. You can also use the appliances’ user manual to determine the age of each system. Compare the age of your appliances to their lifespan to identify what you need covering.
Most home warranty companies will not cover appliances near their average lifespan. Ensure that all appliances and systems are properly maintained and do not have previous issues. No home warranty company will cover previous conditions or lack of maintenance.
3. Exclusions and Limitations. Some home warranty companies have limits, where they will only pay a certain amount for every repair. Once they meet the limit, you will pay for all other repairs and replacements. Other companies will place a one-dollar limit on some items. Some companies will allow you to receive a cash-in-lieu option.
Here, you will get what the home warranty company would have paid to replace or repair the system. You can then use the money to purchase a newer model for the appliance you choose. List all the limitations and ensure that there are few within the contract.
Also, pay attention to lower-priced options since some companies have significantly less coverage and higher limits than their higher-cost counterparts.
4. Cost. The cost of a home warranty depends on several factors. Like your home’s location and the plan you choose. Some companies will let you customize your services based on an estimated number of claims. Home warranty providers offer different plans with varying coverage and costs.
The annual average cost of a home warranty ranges from $300 to $600. So, you can expect the monthly payment to range from $25 to $50. Home warranty providers also charge a services fee of around $60 to $100 each time a technician comes to your home.
5. Compare Coverage Plans. Once you have sample contracts from at least three companies, note the ones that offer the coverage you want. Ensure you read all the terms and conditions since you may find that the plan does not cover some parts of your appliance or system. Take note of what coverage you like and do not like on each contract. Use this information to select the one that best fits your needs.
6. Read Reviews. Go online and read reviews about your potential home warranty company before committing to the contract. Reviews will let you know what other consumers say about the home warranty company. Compare the positive and negative reviews of each company.
Look at how these home warranty companies respond to their customers. If they receive a negative review but try to help customers with their problems, you can rest assured that they have excellent customer service. If they do not respond to customer reviews, go for another company.
A home warranty can protect your appliances and give you peace of mind. These tips will help you choose a warranty plan that meets your needs. Ensure that you assess your needs and budget to see whether planning is worth the cost.