How to Choose a Home Warranty


Owning a home is the American dream, but there is no question it includes many expenses that renters do not encounter. While homeowners endure many costs as a homeowner, they should ensure that a home warranty is in place the very moment they purchase.
Many different home warranties exist, each designed to protect the buyer and their home against the many defects that can occur. The different policies and companies can be overwhelming when you simply want protection when it’s needed. Rather than choose the first warranty company in town, answer the following questions. With the answers to the following questions, finding an exceptional home plan/warranty that surpasses all of your needs is simple.

Am I Protected?

All new home appliances include insurance protection, but some used appliances may also be covered if purchased with a credit card, which extends the length of the warranty. American Express is one credit card company that extends the lifetime of a warranty when bought using your AE card.

What’s the Cost?

Home warranty companies determine rates of your policy based on the amount of coverage and type of policy you choose. Three primary types of home warranty options exist, including a plan that covers all of your appliances, one that covers a specific appliance; or a plan that covers both appliances and plumbing and electrical systems.
Your address also impacts home warranty rates. A plan that covers all home appliances costs about $420 on average, according to American Home Shield. Add electrical and plumbing protection and the average cost increases to about $550.Even with a warranty, expect to endure expenses. There are copayments for contractor service, with fees that range from $60 – $125 average. Costs vary from one state and city/town to the next as well.

What Does the Warranty Cover?

Most customers who complain about their policy to the Better Business Bureau (BBB) simply didn’t fully understand the coverage their plan offered. Read the terms and conditions of any policy carefully to fully understand the home repairs and services that your plan covers. Each policy covers different appliances and repairs. Some policies require that routine maintenance is performed before the warranty kicks in or damages paid. Read all of the terms of the policy so that you know exactly what is and is not paid for and find the best home warranty your money can buy.

What are the Payout Limits?

Most warranty companies place payout limits on any claims for home repairs that their policyholders file during the year. This limit determines the length of time you can file a claim and the amount of money payable on a specific appliance. Even the best home warranty companies include payout limit provisions in their policies. Terms vary from one company to the next. Research the payout limits before purchasing a policy or plan.

Repair or Replace?

Most home warranties replace appliances/fixtures when the costs to repair exceeds the value of the item or otherwise is deemed to be expensive. However, some warranty companies may offer only a depreciated value for the replacement. This may cause you to spend money out of your own pocket for the replacement. Since each policy varies, select one that has terms favorable to your situation.
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