Why do home warranty companies have coverage limits?
All home warranty companies have limits on their coverage. Coverage limits help keep the costs of purchasing a Home Warranty Service Agreement affordable for the average homeowner. They also allow home warranty companies to set expectations for your specific coverage. And of course, limits define how home warranty companies cover the cost to repair/replace eligible system or appliance breakdowns.
Though all home warranty companies have these limits, each company’s limits are different. Today, we’ll look at the following:
- Why limits exist
- What happens if you exceed a limit
- Can you increase your limits?
Why do home warranty limits exist?
Limits exist for two main reasons.
- To allow home warranty companies to provide the most robust coverage to homeowners at a reasonable price
- To allow the home warranty company to continue providing quality coverage and service that homeowners expect and deserve
The first reason is the one most likely to affect you. Home system and appliance breakdowns can be extremely expensive. However, 2-10 Home Buyers Warranty (2-10 HBW) has an extensive network of contractors and vendors, which lets us leverage cost discounts on repairs and parts, often below wholesale price. That’s how we can offer you low-cost coverage and service your breakdown at a fraction of the retail cost.
We’ve designed our coverage and limits to address the kinds of breakdowns that over 95% of homeowners experience. Though many homeowners won’t reach their coverage limits due to our buying power, these limits do protect against unusually expensive claims and help keep prices lower for all homeowners.
An example of how limits work
Consider this example. You can get a Simply Kitchen plan from 2-10 HBW that protects your kitchen’s major appliances for as little as $19 a month. With this plan, the maximum dollar limit on an eligible refrigerator repair or replacement is $2,000.
So, say your fridge breaks down. Without warranty coverage, you could pay an average repair cost of $340* or average replacement cost of $1,370* to address your refrigerator—upfront and out of pocket.
However, with coverage, you’d likely just pay a Service Fee—usually $65–$100. (Note: Non-eligible repairs or items may lead to non-covered costs for you. Fortunately, you can always access your 2-10 HBW Service Agreement through your account and review your coverage.)
That’s a sizeable amount to save on unexpected, upfront, out-of-pocket costs, all while 2-10 HBW helps you find a trustworthy technician.
In short, limits help keep coverage affordable for the average homeowner. They also protect homeowners from bearing the full retail cost of other customers’ unusually expensive claims. Finally, they help home warranty companies manage the claim and provide clear expectations.
What happens if I exceed a limit?
Because every service request is unique—and 2-10 HBW offers several plans based on your needs and budget—there is no one-size-fits-all answer to this question. In some cases, you might be responsible for the dollar amount over the stated limit. In others, 2-10 HBW might offer you a buyout to address your breakdown if the cost to repair/replace it exceeds the limit.
Fortunately, 2-10 HBW’s transparent Service Agreements and supportive customer service team can help walk you through your limits. Because no two breakdowns are exactly the same, the answer to this question is as unique as your situation.
Can I increase my limits?
In some cases, yes! In fact, 2-10 HBW created an industry-exclusive option for homeowners who want to raise certain limits. When you purchase our Luxury Package Option, you can raise your limits on certain systems and appliances.
Consider the following example using 2-10 HBW’s Complete Home plan. This plan covers unexpected breakdowns to your home’s centralized heating and cooling system, plumbing, electrical, and kitchen appliances.
|System/Appliance Covered With Complete Home||Base Limits (No Luxury Option)||Increased Limits (Luxury Option)**|
|Air conditioning/Heat pump||$2,000||$5,000|
$5,000 in aggregate (combined)
**Subject to all other limits stated in the Service Agreement, including individual item limits and those of any selected options, and the Aggregate Limit of $25,000.
As you can see, you can raise your limits by $3,000 for each of your heating and cooling, electrical, and plumbing systems. You can also raise your total combined limits on your kitchen appliances by $1,000 and give yourself more coverage flexibility.
That’s $13,000 limit increase overall, and this option is only available through 2-10 HBW.
So, even though limits will always exist with a Home Warranty Service Agreement, 2-10 HBW gives you options to raise those limits. That helps you personalize your coverage for added peace of mind at an affordable cost.
Home warranty coverage limits allow the greatest number of homeowners to get cost-effective coverage at a relatively low price. Every home warranty company has limits on coverage, but each company’s limits differ. Some companies will set low limits that essentially guarantee you’ll pay out of pocket. 2-10 HBW works to set limits that allow as many homeowners to obtain coverage as possible.
2-10 HBW takes pride in being transparent about limits and exclusions in our Service Agreements. Those limits might make you nervous. But remember: 2-10 HBW’s lower costs combined with limits allow you to get quality coverage at an affordable price.
In short, we want to help you find the best coverage for your budget and let you personalize your coverage for years to come.
2-10 HBW offers the most comprehensive home warranty coverage for homeowners. Let us help you protect your home.
*Based on estimated average retail cost of replacement and observed claims experiences of 2-10 HBW customers as of 2021.