If you are a homeowner, you know how expensive and stressful it can be to deal with unexpected repairs or replacements of your home systems and appliances. Whether it’s your air conditioner, refrigerator, water heater, or washer and dryer, these items can break down due to normal wear and tear and cause a lot of inconvenience and hassle. That’s why many homeowners choose to purchase a home warranty plan, which is a service contract that covers the cost of repairing or replacing these items when they malfunction.
But what exactly is a home warranty, how does it work, and what are the benefits of having one? In this blog post, we will answer these questions and provide you with some tips on how to choose the best home warranty plan for your needs.
What is a Home Warranty?
A home warranty is not the same as homeowners insurance, which only covers damage caused by theft, fire, or weather-related events. A home warranty covers the normal wear and tear of your home systems and appliances, which are not usually covered by insurance. A home warranty plan typically covers parts of up to 23 systems and appliances, such as heating, air conditioning, plumbing, electrical, kitchen appliances, laundry appliances, roof leak repair, and more. You can also customize your plan with additional coverage for items like swimming pools, electronics, garage door openers, and more.
Read more about How to Choose the Best Home Warranty Company for Your Needs
A home warranty plan usually lasts for one year and can be renewed annually. The cost of a home warranty plan depends on the level of coverage you choose, the size and age of your home, and the service fee you pay for each claim. The service fee is the amount you pay to the contractor who comes to diagnose and fix the problem. The service fee can range from $75 to $125 per claim. The average annual premium for a home warranty plan in the US is about $600.
How Does a Home Warranty Work?
When you purchase a home warranty plan, you are essentially paying for peace of mind and convenience. If one of your covered items breaks down due to normal wear and tear, you can simply contact your home warranty provider and request service. The provider will then assign a qualified and pre-screened contractor from their network to come to your home and diagnose the problem. You will pay the service fee to the contractor and they will either repair or replace the item, depending on the terms and limits of your contract. If the repair or replacement exceeds the limit of your coverage, you will be informed of any additional costs upfront so you can decide how to proceed.
A home warranty can save you a lot of time, money, and hassle when dealing with unexpected breakdowns. According to a survey by American Home Shield®, 59% of their customers filed at least one claim in 2022 and saved $213 million in covered repairs and replacements. Without a home warranty, you would have to pay out of pocket for these expenses, which can be quite costly. For example, the average cost of repairing or replacing an air conditioner without a home warranty is $915 to $3,842; a plumbing system is $505 to $1,407; a heating system is $823 to $3,634; an electrical system is $480 to $2,496; an oven/range is $1,134 to $3,460; and a water heater is $1,388 to $2,051.
What are the Benefits of Having a Home Warranty?
There are many benefits of having a home warranty plan for your home. Some of them are:
- You can protect your budget from unexpected repair or replacement costs due to normal wear and tear of your home systems and appliances.
- You can avoid the hassle of finding and hiring reliable contractors on your own. Your home warranty provider will take care of that for you and send you pre-screened professionals who are trustworthy and experienced.
- You can enjoy flexible payment options and choose the plan that suits your needs and budget. You can also customize your coverage with additional items that are important to you.
- You can access 24/7 customer service and request service online or by phone anytime you need it.
- You can benefit from member perks such as discounts on new appliances and services like pre-season HVAC maintenance, tech set-up and installation, and more.
How to Choose the Best Home Warranty Plan for Your Needs?
There are many home warranty companies in the market that offer different plans and prices. To choose the best one for your needs, you should consider the following factors:
- The level of coverage: Compare what systems and appliances are covered by each plan and how much they cover in terms of repair or replacement costs. Look for plans that offer comprehensive coverage with high limits and few exclusions.
- The reputation: Check the reviews and ratings of each company and see what their customers say about their service quality, responsiveness, and customer satisfaction. Look for companies that have a long history and experience in the industry and are accredited by the Better Business Bureau.
- The cost: Compare the annual premiums and service fees of each plan and see what fits your budget. Look for plans that offer flexible payment options and discounts for multiple-year contracts or referrals.
- The customer service: Check how easy it is to contact the company and request service. Look for companies that offer 24/7 customer service and online portals for service requests and plan management.
A home warranty is a great way to protect your home and your budget from unexpected repair or replacement costs due to normal wear and tear of your home systems and appliances. A home warranty can save you time, money, and hassle when dealing with breakdowns and provide you with peace of mind and convenience. To choose the best home warranty plan for your needs, you should compare the level of coverage, reputation, cost, and customer service of different companies and find the one that suits you best.