Buying a home is a huge and often expensive investment. You want to make sure you’re protected when something goes wrong, but navigating all the different types of insurance policies can be overwhelming.
A home warranty policy is a way homeowners can protect their investments. These policies usually cover the repair or replacement costs when systems and appliances break down due to normal wear and tear.
Home warranties provide peace of mind for homeowners, but understanding how they work, what they cover, and what coverage options are available can be tricky.
Whether you’re already a homeowner or just looking into becoming one, it’s important to understand what home warranty policy is best for you. Here’s everything you need to consider when getting a home warranty policy so that you know what situations are covered and which ones aren’t.
Table of Contents
1. Type of Coverage Needed
When looking over different home warranty policies, begin by identifying which type of coverage is most beneficial. This will vary from homeowner to homeowner, as not everyone is in need of the same level or type of protection for their homes.
Some plans include things like appliances, HVAC systems, and plumbing, while others may also include garbage disposals, pool maintenance, or hardware. It’s important to read through the fine print carefully so that you don’t buy something you don’t actually need—or miss out on something that you do.
2. Limits and Exclusions
It’s important to look at the limits and exclusions of a home warranty before making a purchase, as they will define what is covered (and not covered) by the warranty.
The limits and exclusions are often specific to certain appliances or components of your home, meaning some may be eligible for coverage while others won’t. This is also important to note so that you know exactly what you’re getting when you buy a home warranty policy.
When budgeting for a home warranty policy in addition to your mortgage payments each month, it’s essential that you keep overall costs reasonable without sacrificing features from your coverage plan.
However, there are certain measures that can be taken by homeowners prior to taking on such large investments in order to secure better pricing deals and lower monthly premiums.
For example, if your home was built less than 10-15 years ago and is up-to-date with inspections or repairs by qualified professionals, then you can likely seek discounts within said agreements. This will depend on the company you choose to take a policy with.
Additionally, most home warranty services may charge you additional fees, such as a service call fee. Every time a contractor comes out to your home, you may have to pay between $60 to $100 for the service. Make sure you choose a company that offers reasonable fees and premiums for what you need.
4. Who Are the Company’s Contractors?
Another important factor to consider is who the company’s contractors are. Make sure to ask the company what qualifications their contractors have. This is because home warranty companies don’t necessarily employ contractors. Instead, they partner with various local businesses in the areas where they provide their services.
The home warranty company will contact a contractor should your home need specific repairs. It’s important to find out how the company vets their contractors. You don’t want an unqualified contractor working on your home because it could cause further damage to your property.
With that being said, contractors should be licensed and bonded in the state they’re providing a service. There should be a policy in place that will protect you from poor-quality work if the contractor doesn’t provide the expected standard of work.
5. License and Insurance Regulations
The license and insurance regulations refer to the legal requirements that must be met in order for the home warranty policy to be valid.
Regulations of these policies can vary greatly, depending on the company providing them. Generally, they include specific definitions of what is covered and what isn’t, along with other restrictions, such as limitations on when the warranty can be used and where repairs can take place. Additionally, some policies may require an upfront fee or an added monthly premium.
6. Customer Service Levels
Finally, verifying solid customer service levels offered by distributors of contracted home warranty policies can save lots of future headaches down the line.
It’s useful if any representatives that handle customer inquiries are knowledgeable about what questions are being asked. If you want to know what the company’s service is like, then consider reading home warranty reviews.
You can find out a lot about a company simply by reading about other clients’ experiences with them. Ideally, you want to choose a home warranty company that has more positive reviews than negative ones. You can also see how the company responds to the negative feedback they receive.
With reviews, you can then make an informed decision on whether it’s the right company to take out a home policy with.
A home warranty policy is designed to protect your assets and help you save on costs should you need property repairs. But choosing a quality home insurance company is crucial if you want an affordable service provider that offers you a policy that’s specific to your needs.