How to Choose the Right Home Warranty
When choosing the right home warranty for you, it is important to research and compare the options available for your needs and your budget. Monthly and annual costs can vary widely between home warranty providers, but out of pocket costs are just one of the considerations when selecting a home warranty.
Most home warranties have a monthly or annual fee, along with a service fee that is collected for each service visit.
To choose the right home warranty for you, it is important to understand all of the factors that may be important to you.
Is the home warranty company licensed?
Before buying a home warranty make sure the home warranty company is licensed. Your state’s department of insurance can verify whether or not the company is licensed to do business in your state.
If you live in a state where licenses for home warranty companies are not required, you may choose to review their Better Business Bureau accreditation and reviews.
What coverage do you need from a home warranty?
One of the most important factors to consider when buying a home warranty is understand the coverage that you need. Many complaints about home warranty companies are a result of a misunderstanding of coverage.
After narrowing down your list of home warranty providers, write down a list of the systems and appliances that you need to be covered. You will be able to visit each of the home warranty company websites and review the exclusions or limitations in each home warranty coverage plan.
Read the terms and conditions for each home warranty plan carefully before selecting and buying your plan.
Ensure you understand home warranty pricing
Once you understand the coverage exclusions and limitations of different home warranty companies, make sure you understand the home warranty pricing.
The best way to do this is to request a quote from each company and to request a sample contract for the plan that matches your budget and coverage needs.
Home warranties have a service fee or a deductible that you select at the time of purchase that can cost between $50-$125, depending on the company. Often, the lower the deductible, the higher the monthly or annual premium.
How does a home warranty provide different coverage than other warranties or insurance?
No matter what home warranty plan you purchase, it is important to understand how the coverage you get from a home warranty varies from the coverage you have from home insurance or other warranty programs.
Home insurance provides coverage in the event that something like fire or a natural disaster damages or destroys your home. However, home insurance does not provide coverage for the breakdown or repair of your home’s systems and appliances from normal daily use.
Some systems and appliances may come with a manufacturer’s warranty to ensure you are covered in the months after purchasing.