It’s normal to worry about something going wrong when buying a home. Perhaps you are worried that you will move in only to discover a nest of termites along the foundation or maybe your basement will turn into a swimming pool once it starts raining. You can now arm yourself against such calamities using a home warranty.
A home warranty is designed to cover what home insurance will not. Home warranties are basically service contracts that promise to cover the cost of replacement or repair if items covered such as plumbing, appliances, air conditioning and heating systems stop working. Generally, having a home warranty can offer you a peace of mind if anything goes wrong.
It’s however worth noting that providers of these warranties often leave room that makes it easier for them to escape making the payments. As a result, numerous consumers have complained about their home warranty plans, mostly because they never received payouts as expected. But still, home warranty can’t be wished away especially if the appliances and the home itself is a little older. When it comes to what to look out for when purchasing a home warranty, the following questions will offer excellent guidance.
1. What does the home warranty cover?
When purchasing a home warranty, the first thing you should consider is coverage. So before you start going through the contracts and squinting at the fine print, you should first take a look around your house. Note down a list of items you would like covered. And if you aren’t sure of what items you should have covered by your home warranty, keep in mind that home warranties replace or repair appliances or a system when it breaks down from wear and tear.
Generally, you should plan to cover items that are well maintained but a little older, expensive to replace or repair, and those necessary for your comfort living around your home. When coming up with this list, remember that home warranties are generally designed to cover mechanical components of appliances and systems, and not necessarily the structure of your house. Foundation and structure coverage will most likely be taken care of by your home insurance.
After creating your list, go through a number of warranty contracts from reputable home warranty companies and find out the kinds of items they cover. According to an article by Andree Brooks of the New York Times, you are better off with a home warranty contract that doesn’t include house structural coverage.
2. What are the exclusions and limits with the home warranty?
All home warranty offers have monetary limitation and exclusions. Exclusions are often listed as specific situations, items and parts that the warranty won’t cover under the contract. Limitations, on the other hand, are monetary amounts your home warranty provider will pay you for repairs and replacements of your appliances or systems, but any extra accrued costs will become your expense.
Some companies have limitations on specific items and parts within your home, while other warranties have limits on all replacements and repairs. So when you go over the set limits, you will be required to pay for the extras out of your pocket. Understanding the limitations and exclusions of a home warranty will help you to determine which company suits your situation.
3. How much will it cost?
The answer to this depends on the provider you choose and the kind of plan you buy. You can generally buy one of the three common plans; a warranty to cover a specific appliance, for all the appliances in your house or for your appliances plus your electrical and plumbing systems.
So the prices will vary depending on the cover you choose. A typical plan that covers major appliances will cost you between $200 and $300 annually. A warranty that includes your plumbing and electrical systems can cost you between $800 and $1000. Apart from the cost of the home warranty contract, you are likely to incur some additional costs. When a contract comes in to fix repairs, you may have to make a co-payment.
4. What are the company’s reviews and ratings online?
By reading this, chances are you’re searching online for a home warranty company you can trust. If this is the case, then be sure to look at ratings of the company from major real estate and Home Warranty platforms. Go deeper and take a look at the number of negative and positive reviews while paying attention to concerns pointed out in the negative reviews.
If the company is making an effort to fix the concerns raised, chances are they have a good customer support team that will work with you should you find yourself in the same situation. However, if the company doesn’t make any effort to sort these concerns, they might treat you the same way, so be sure to perform your research in advance.
5. If Something Needs Repair, How can I Make a Claim?
One more important thing to remember is that you should always keep written records of each communication with your home warranty provider and the service vendor given the job. Always make your requests in writing and request for return receipts for your record keeping. After you’ve notified your warranty provider, they will contact a repairman to fix the broken item or recommend a replacement where applicable. There might be some service charges for the repair, but this will come from the warranty provider rather than the repairmen.
6. Will broken items be repaired or replaced?
This is often thrown under the fine print section. Some company will promise to repair your broken items and parts but will keep quiet about replacements until you squint at the fine print. Most home warranty providers explain that in the event that a repair is considered expensive, the provider might opt to replace it instead. In this case, your home warranty provider may only offer to give you the depreciated value and require that you pay more for the item to be replaced. Make sure that you are clear on this before making your decision.
If you keep all these questions on what to look out for when purchasing a home warranty, you will find the best cover for you’re and your home. You will be able to save money, time and have peace of mind, and in addition, you will be better prepared on what to expect from your home warranty provider.