A home warranty can be a smart investment, offering peace of mind by covering repairs and replacements of major systems and appliances in your home. But with so many providers and plans on the market, how do you make the right choice? Here’s what to consider when selecting a home warranty that fits your needs and budget.
Understand What a Home Warranty Covers
A home warranty is different from homeowners insurance. While insurance covers damage from events like fire or theft, a home warranty handles the wear and tear of systems and appliances over time. Typical items covered include HVAC systems, plumbing, electrical, water heaters, kitchen appliances, and sometimes even washers and dryers.
Each plan varies, so it’s important to read the fine print. Some base plans cover only systems or appliances, while more comprehensive plans cover both. Optional add-ons may include pools, spas, septic systems, or well pumps.
Assess Your Home’s Needs
Before purchasing a plan, evaluate your home’s age and the condition of your systems and appliances. If your HVAC system is over 10 years old or your appliances are aging, a warranty can save you significant money in repair or replacement costs.
New homeowners or sellers can also benefit from a warranty. Buyers get peace of mind during their first year of ownership, and sellers can use it as a value-added incentive to attract buyers.
Compare Providers and Plans
Not all home warranty companies are created equal. Start by researching multiple providers, reading online reviews, and checking with the Better Business Bureau (BBB) for ratings and complaints. Be wary of companies with a history of denying claims or poor customer service.
When comparing plans, pay attention to:
Coverage limits: Each item has a maximum payout per claim or per term.
Service fees: These are out-of-pocket costs for each service visit, typically ranging from $60 to $125.
Exclusions: Some conditions, such as pre-existing issues or improper installation, may void coverage.
Ask the Right Questions
Before signing a contract, ask the following:
What is the claims process?
How quickly are repairs handled?
Can I choose my own contractor, or must I use theirs?
Are there penalties for canceling?
These details can make a big difference in how useful your warranty will be when you need it.
Budget for Long-Term Costs
Home warranties usually range from $350 to $700 per year, plus service fees. While this is generally more affordable than unexpected repair costs, it’s important to understand the full scope of coverage to avoid surprise expenses.
Final Thoughts
A well-chosen home warranty can protect your budget and reduce the stress of unexpected home repairs. By carefully comparing plans, understanding the fine print, and choosing a reputable provider, you can make a confident decision that keeps your home running smoothly.