Purchasing a home warranty can save time, money and provide peace of mind. It is also an important financial decision. There are several things to know about before getting your home warranty plan.
How can you tell which home warranty plan will be an excellent investment of your money and which one is going to be a source of frustration? What should you look for in a home warranty? There is no simple answer, and there is no one-size-fits-all home warranty solution. You have to consider each warranty’s options, premiums, deductibles, terms, and conditions.
To help you better understand your needs, your expectations, here are 5 questions you should ask:
1. What does the home warranty cover?
Coverage is the first thing you must consider when you want to purchase a home warranty. Start with a list of items you want to be covered by a home warranty. Be sure to add to this list:
- Items that are close to the end of their life cycle
- Items that are expensive to replace or repair
- Items that are essential for your comfort
Once you got the list, it’s time to do the research. Compare contracts from various reputable home warranty companies on their websites. You will notice that covered items vary from one company to another. Typically though, they will always include washer dryer, plumbing, electrical system, and roof leaks.
Keep in mind that there are different types of home warranties. There are structural warranties, systems and appliances warranties, appliance-only warranties, and an all-inclusive option. Make sure to ask about the limitations of coverage. If the home or appliance is not managed correctly, coverage may be voided.
2. What are the limits and exclusions of a warranty?
Understanding a home warranty company’s limits and exclusions helps to decide which company will be best for your situation.
All home warranty include exclusions and monetary limitations. Exclusions are recorded as particular items, parts, or situations that the home warranty will not cover under the agreement. Limits are monetary amounts that the home warranty company will pay up to repair or replace your appliance, but any other accumulated cost will become the homeowner’s expense.
Depending on the home warranty company, you can have limits on specific items or a set limit on all repairs. Once the repairs and replacements have gone over that amount, the homeowner must pay out of pocket.
3. How Much Does a Home Warranty Cost?
Usually, home warranty companies have the same basic parts that a homeowner has to pay: a monthly or yearly premium and a service call fee.
The yearly premium ranges from $250 to $600, and the service call fee ranges between $60 and $100. The service call fee is paid to the contractor when he arrives at the house to perform the diagnosis of the failed system or appliance.Prices may also vary depending on where you live.
Don’t forget that if you reach the limit for a system or an appliance, you have to pay the difference. Usually, this is a lower cost than what you would pay if you called an independent contractor.
When you choose your yearly premiums, remember that lower premiums can mean less coverage, higher service call fees, or lower monetary limits. Make sure you check all these things.
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4. Who are the company’s contractors?
Before buying a home warranty, make sure to ask for the qualifications of their contractors.
The home warranty company partners with local businesses; they don’t hire contractors. You will want to deal with licensed contractors that perform to a high standard. For more on local business management check this new guide on how to read paystubs.
5. What are the company’s ratings and reviews online?
When you are researching home warranty companies online, make sure to check their ratings on Consumer Affairs, the Better Business Bureau and Home Warranty Reviews.com.
Looking at the ratings and comparing positive versus negative reviews will give you good insight.