A home warranty is a service contract that covers the repair or replacement of your home systems and appliances when they fail due to normal wear and tear. A home warranty can save you money and hassle when something goes wrong with your covered items, such as your plumbing, electrical, heating, air conditioning, water heater, refrigerator, oven, dishwasher, washer, dryer, and more.
However, not all home warranties are the same, and you should be aware of the benefits, limitations, and costs of each plan before buying one. In this article, we will explain what a home warranty covers, what it does not cover, how much it costs, and how to choose the best one for your needs.
What Does a Home Warranty Cover?
A home warranty covers different items depending on the plan you choose. Most home warranty companies offer several plans with varying levels of coverage. These may include appliances-only or systems-only plans in addition to combination plans that cover both. Some companies also offer optional add-ons or upgrades that cover additional items or provide higher coverage limits.
Some common items that are covered by most home warranty plans include:
- Plumbing system
- Electrical system
- Heating system
- Air conditioning system
- Water heater
- Kitchen refrigerator
- Built-in microwave oven
- Garbage disposal
- Clothes washer and dryer
- Garage door opener
- Ceiling fans
Some additional items that may be covered by some plans or as optional add-ons include:
- Swimming pool
- Central vacuum
- Heat pump
- Stand-alone freezer
- Full garage door system
- Instant hot water dispenser
You should always read the contract carefully before signing up for a plan, as it contains important information about your coverage, exclusions, limitations, conditions, fees, and responsibilities. For example, some items may be covered only if they are less than a certain age, or if they are maintained according to the manufacturer’s instructions. Some items may have a cap on how much the home warranty company will pay for repairs or replacements. Some items may not be covered at all if they are damaged by natural disasters, pests, misuse, or neglect.
What Does a Home Warranty Not Cover?
A home warranty does not cover everything in your home. There are some items and situations that are typically excluded from home warranty coverage. These may include:
- Structural components of your home, such as walls, roofs, foundations, windows, doors, etc.
- Cosmetic defects or damages, such as scratches, dents, stains, etc.
- Items that are still under the manufacturer’s warranty or another service contract.
- Items that are not installed properly or up to code.
- Items that are modified or customized beyond their original specifications.
- Items that are damaged by improper use or abuse.
- Items that are damaged by acts of God, such as floods, earthquakes, fires, etc.
- Items that are damaged by pests or animals.
- Items that are subject to recall or class action lawsuits.
- Items that require routine maintenance or cleaning.
You should always check the contract carefully and understand what is covered and what is not covered by your home warranty plan. You should also keep records of your receipts and invoices for any repairs or replacements that you pay for out of pocket.
How Much Does a Home Warranty Cost?
The cost of a home warranty varies depending on the company, the plan, and the option you choose. Generally, you can expect to pay between $300 and $600 per year for a basic plan that covers appliances or systems only. You can expect to pay between $600 and $900 per year for a comprehensive plan that covers both appliances and systems. You can also pay extra for add-ons or upgrades that cover more items or provide higher coverage limits.
In addition to the annual or monthly fee, you will also pay a service fee every time you file a service request. The service fee ranges from $60 to $150 depending on the company and the option you choose. The service fee is usually lower if you choose a higher annual or monthly fee and vice versa. The service fee is due at the time of service and is non-refundable.
To determine if a home warranty is worth it for you, you should compare the cost of the plan with the potential savings from repairs or replacements. You should also consider the age and condition of your home and its systems and appliances as well as how often they break down or need maintenance. A home warranty may be more beneficial for older homes or homes with older or more expensive systems and appliances.
How to Choose the Best Home Warranty?
There are many factors to consider when choosing the best home warranty for your needs. Here are some tips to help you make an informed decision:
- Compare different plans and companies: You should shop around and compare different plans and companies based on their coverage, cost, reputation, customer service, and reviews. You can use online tools like U.S. News or Forbes Home to find and compare top-rated home warranty companies in your area.
- Read the contract carefully: You should always read the contract carefully before signing up for a plan as it contains important information about your coverage, exclusions, limitations, conditions, fees, and responsibilities. You should also ask for a sample contract before buying a plan as some companies may not provide it online or may change it without notice.
- Check the reviews and ratings: You should check the reviews and ratings of the home warranty company and its contractors from other customers as they can give you an idea of their quality, reliability, and professionalism. You can use online platforms like Better Business Bureau or Consumer Affairs to find and read customer feedback and complaints.
- Beware of scams: You should beware of scams that may try to trick you into buying a fake or fraudulent home warranty plan. Some signs of a scam include unsolicited letters, phone calls, or emails that urge you to act quickly or offer unrealistic deals. You should also avoid paying upfront fees or giving out personal or financial information to unknown or unverified sources.
A home warranty is a service contract that covers the repair or replacement of your home systems and appliances when they fail due to normal wear and tear. A home warranty can save you money and hassle when something goes wrong with your covered items. However, a home warranty is not a one-size-fits-all solution and you should carefully weigh the pros and cons of each plan and company before buying one. You should also do your research and compare different options based on their coverage, cost, reputation, customer service, and reviews. By following these tips, you can find the best home warranty for your needs and enjoy peace of mind in your home.