Want a clear guide on how to buy a Home Warranty? We got you!
Home warranties are an excellent way to protect your home from unexpected repairs and expenses.
After all, there’s always the possibility that something could go wrong with your home, no matter how well you take care of it.
In fact, according to Consumer Reports, average family could save around $330 per year by repairing existing items instead of replacing them
Having a home warranty would ensure peace of mind knowing that if something does go wrong, you’re covered. Keep reading to know more about how to buy a home warranty.
What Is a Home Warranty?
A home warranty is like insurance that covers certain repairs or replacements that may need to be made to a home.
This can include repairs to appliances, wiring, plumbing, and other systems in the home.
Home warranties are typically offered by homebuilders when a new home is purchased or by homeowners associations to maintain common areas.
Home warranty cost depends on the size and age of the home, as well as the coverage that is included.
Most policies cover major appliances and systems in the home, such as the furnace, water heater, and air conditioning unit.
They may also cover repair or replacement costs for roofing, siding, and windows.
Reasons To Buy A Home Warranty Plan
If you are stuck between the thought of wether you should buy a home warranty or not, then let us make it simple for you. Here are some practical reasons why you should buy a home warranty plan:
- It offers you peace of mind.
- It protects you against regular wear and tear.
- It offers financial aid when you cannot afford an unexpected expense.
Here is when you should buy a home warranty plan:
- When you are moving to an older home.
- When you have moved into a locality where you do not know a local repairman.
- When you are selling your house and want to offer something additional that raises the value of your home.
- When you are a first-time home buyer.
5 Steps to Buying a Home Warranty
You know what a home warranty is; now, you may be curious to know how to go about buying one. Here are five steps to take when purchasing a home warranty:
Step 1: Determine What You Need to Cover
When purchasing a home warranty, the first step is to determine what you need to cover.
This will vary depending on the age and size of your home, as well as the coverage that is included in the policy.
Most policies cover major appliances and systems in the home, such as the furnace, water heater, and air conditioning unit.
They may also cover repair or replacement costs for items such as siding, windows, or roofing.
It’s pertinent to read through the fine print carefully to make sure that you’re aware of what is and isn’t covered. This will help you decide which policy is best for you.
Step 2: Compare Quotes From Different Companies
Once you have learned what you need to cover, the next step is to compare quotes from different companies.
Home warranty policies can be purchased through home insurance companies, homebuilders, or homeowners associations.
When comparing quotes, be sure to pay attention to the deductibles and coverage limits. These can be different depending on one company to another.
Step 3: Choose a Deductible That You’re Comfortable With
The deductible is one of the most important factors to consider when choosing a home warranty policy. The deductible is the amount you will have to pay out-of-pocket before the policy kicks in.
Deductibles can vary from a few hundred dollars to several thousand dollars. It’s important to choose a deductible that you’re comfortable with so that you’re not stuck with a hefty bill if something goes wrong.
Step 4: Read the Fine Print
Before purchasing a home warranty policy, be sure to read the fine print. This is where you will find all the details about the coverage, including what is and isn’t covered.
It’s important to understand the policy before purchasing it so that you’re not caught off guard if something goes wrong.
Step 5: Purchase the Policy
Once you’ve compared quotes, chosen a deductible, and read the fine print, you’re ready to purchase the policy.
Home warranty policies can be purchased through home insurance companies, homebuilders, or homeowners associations.
Be sure to keep your policy in a safe place so that you can reference it if something goes wrong.
What Do Home Warranties Cover?
A home warranty plan covers the major systems and appliances in your house. Here are things that your home warranty may cover and may not cover:
Systems & appliances covered:
- Ovens / Ranges / Cooktops
- Plumbing systems
- Refrigerators
- Furnaces
- Garbage disposals
- Dishwashers
- HVAC systems
- Electrical systems
Additional coverages:
- Pool and spa equipment
- Ice makers
- Ductwork
- Roof leaks
- Septic systems
Home warranty plan does not offer coverage for:
- Pre-existing conditions
- Scratches and dents
- Items under manufacturer warranty
- Damages made due to improper use, negligence, etc.
Final Thoughts
Your home is likely one of the most expensive purchases you’ll ever make, so it’s important to protect it. A home warranty can help to do just that.
If you’re in the market for a home warranty, be sure to follow the steps outlined above. This will help you find the best policy for your needs and budget.
FAQ’s
How much does home warranty cost?
On average, the most basic home warranty plan may cost you $480 a year. More comprehensive plans can cost you up to $839 per year or even more.
Additionally, the service fees will cost you $50-$125 as per the industry standard.
When should you not buy a home warranty?
If you have purchased a new house with new appliances then you do not need a home warranty plan.
Also, if your appliances are stilll under manufacturer’s warranty then you do not need a home warranty yet.
What to look for in a home warranty company?
There are so many home warranty companies in the market today, and it can get really confusing to choose a good one.
But here’s what you should look for in a home warranty company:
- Check if the company has brick and mortar office.
- Look for customer service numbers. Make sure they work.
- Companies registered with BBB and those having a rating of more than B+ are generally good.
- Look for online customer reviews on portals like Trustpilot, Yelp, etc.
- Ask your realtors if they can recommend you any good home warranty company.
Shefali Jain is a Content Editor & Writer at National Planning Cycles.
After completing her graduation in hospitality, Shefali decided to follow her passion and started writing. Shefali has been writing for two years now and contributes to our website as a skilled editor and content writer with strong research skills. Writing product and service reviews, biographies, and book reviews are some of her key areas, among many others in which she specializes.