What is a Home Warranty?

A home warranty is a service contract that helps homeowners cover the costs of repairs or replacements for major home systems and appliances, such as HVAC, plumbing, and refrigerators. By paying a fixed monthly or annual fee, homeowners can avoid unexpected repair bills. Instead of paying out-of-pocket, a small service fee is paid when a technician arrives to handle the problem, which can include everything from fixing a broken furnace to replacing an oven.

Why Do Homeowners Need a Home Warranty?

Imagine a homeowner who’s just moved into their new home. Everything is going great until the refrigerator suddenly stops working, the HVAC system fails in the middle of summer, and the dishwasher breaks down. The repair bills quickly start to add up, and finding reliable service technicians is becoming stressful. This homeowner decides to invest in a home warranty. The next time something breaks, they file a claim and pay a small service fee. A trusted technician arrives to fix the problem, and the repair or replacement is covered by the warranty, saving the homeowner both time and money. This is how home warranty plans help homeowners avoid unexpected repair costs.

Understanding Home Warranties

If you’re tired of paying out of pocket for every unexpected repair on your home systems and appliances, then a home warranty has you covered. By paying a fixed monthly or annual amount, you receive full coverage of repairs and replacements of your home systems and appliances. Give yourself peace of mind knowing that a huge bill won’t come your way with every breakdown in the home.

Do I Need a Home Warranty if I Have Home Insurance?

Home warranties and insurance both protect your home, but they cover different things. A home warranty covers repairs for major appliances and systems, while home insurance covers damage to the structure of your home and its contents.

At the end of the day, having both home insurance and a home warranty protects you against unexpected expenses. You’ll have coverage for damages with your home insurance. Plus, you’ll save money on maintenance and repair fees. These expenses can add up, and paying a monthly premium for both insurance and a home warranty can save you hundreds, if not thousands.

Exploring Home Warranty Coverage Options

Typically, home warranty companies offer coverage options for common home systems and appliances. Many also offer optional add-on coverage for things like a pool, spa, and similar home items. You’ll likely be able to create a custom plan based on your coverage needs.

Common Home Systems Coverage:

• HVAC
• Plumbing
• Ductwork
• Electrical
• Water heater
• Ceiling and exhaust fans

Common Home Appliance Coverage:

• Refrigerator
• Oven
• Built-in microwave
• Garbage disposal
• Washer
• Dryer
• Cooktop
• Garage door opener

Common Optional Add-Ons:

• Pool
• Spa
• Second refrigerator
• Stand-alone freezer
• Salt water pool
• Septic tank pumping
• Roof leak repair
• Well pump

Keep in mind that your typical American home warranty provider has limitations. Exclusions may include pre-existing conditions, structural issues, or normal wear and tear. So make sure to read the fine print before signing up.

The Financial Considerations

A home warranty covers unexpected repairs on home systems and appliances like ovens, fridges, and air conditioning. Homeowners pay a monthly or annual premium for their coverage. A home warranty plan usually requires a deductible service fee for an item inspection, around $65 to $100, known as a trade call fee.

Paying a monthly or annual premium to your home warranty company can save you thousands of dollars in the long run. Consider the cost of home warranty plans and the cost of repairing or replacing common household systems. The average cost of a home warranty ranges between $300 and $600 per year for a basic plan, with monthly payments usually ranging from $25 to $50 depending on the coverage level and provider. Most plans also charge a service call fee per repair, typically between $50 and $100.

Still not sure if a home warranty is worth it? Take inventory of the systems and appliances in your home. How old are some of them? Consider their value and the potential costs of repairing them. Then compare that to a home warranty comparison to ensure you are getting the best deal for your needs.

Home Warranty Providers and Comparison

When you’re exploring home warranty plans, it's essential to compare home warranty companies. A good home warranty plan will cover many crucial home systems and appliances, but it’s important to assess the best home warranty plans to find the most comprehensive and affordable options. Look at the benefits of each provider, their reputation, and customer reviews to ensure you are choosing the most reliable and budget-friendly option.

Choosing the Right Home Warranty Provider

Having a home warranty can give you peace of mind knowing that you won’t have to pay for expensive service repairs when systems and appliances break down. It’s a budget-friendly protection against unexpected expenses, like replacing a refrigerator or repairing your home’s HVAC system.

Before choosing your provider, do your research. Take a look at the company’s reputation by reading customer reviews. Side by side comparisons can help understand the services offered by the best home warranty companies out there. That’ll make your decision a lot easier knowing what to expect.

Key Questions to Ask:

• What are the average monthly and/or annual costs of home warranty plans?
• What does the company charge for service claims?
• Does the company offer optional coverage to meet the needs of your home?
• What are the claims processes?
• What do customers have to say about their experience with the home warranty company?
• What does the fine print say? Are there any coverage limitations and contract terms you should consider?

The Home Warranty Experience

Whether you’ve just bought a new home or you’re looking for a way to save money on repairs, a home warranty can make a lot of sense for your wallet in the long run. Like with any big purchase, doing a little research can go a long way.

Before purchasing your plan, select a few companies that stand out. Submit an inquiry and compare home warranty quotes. This will help narrow down your choices and stay within budget.

Know what you can afford before you start shopping. Don’t forget unexpected fees, like installation or removal of old appliances. See what customers have to say. Finally, protect all appliances in your home with a solid home warranty plan — you'll save yourself the headache of paying for unexpected costs.

Filing a Claim

Now, let’s say you’ve purchased a home warranty plan, and something in the house breaks, like a washing machine or oven. Many home warranty plans offer 24/7 support so you can call them immediately or submit a claim online. Typically, it takes just a few days for them to send a repairman to come have a look at the problem. Home warranty plans usually require their customers to pay a fee for each repair, which can range from $50 up to $150.

Most home warranty providers have terms and conditions on units that they will repair or replace. In some cases, they won’t cover any item still under warranty from the manufacturer. They may also exclude malfunction due to the following:

• Rust or corrosion
• Mold or mildew
• Misuse or abuse
• Failure to maintain equipment
• Fire, power surges, electrical shorts, water damage, lightning or storms
• Pest damage

Keep in mind that systems and appliances that exceed a certain age will not fall under coverage. Some companies have specific coverage limits for each type of system and appliance. Make sure to read your contract thoroughly to understand the fine print before signing up.

Final Thoughts & Encouragement

Between our busy schedules, the last thing anyone needs is to deal with the hassle of home repairs, especially to fix something crucial like plumbing or a refrigerator. A quality home warranty plan relieves the stress of worrying about what to do, plus saves money in the long run.

A home warranty plan means that help is just a phone call away. Under your plan, you know that you only have to pay a pre-agreed upon fee that won’t break the bank. After all, replacing home systems and appliances can come at a hefty price.