How to Shop for the Best Home Warranty


An article from Andrea Needham

Finding a good home warranty is just like finding good insurance – you have to do some digging to find something worthwhile. Not every home warranty on the market is worth your hard-earned money. But the right warranty, from the right company, could save you from big out-of-pocket expenses. Today, ApplianceAid covers home warranties in detail here, including why you might need them and how to find the best deal out there.

What is a home warranty?


A home warranty is a service contract that covers the costs of maintaining household systems and appliances. The exact household systems and appliances covered depend on the plan. A typical warranty will cover damages to systems like HVAC, electrical, and plumbing, as well as appliances like stoves, refrigerators, and air conditioners.

You pay about $40 to $60 per month for such a contract. Moreover, you also have to pay a deductible – anywhere from $50 to $150 – each time you call it in. Coverage caps typically cover the cost of repairs and sometimes outright replacement (if necessary) of broken systems or appliances. Without a warranty, you'd pay significantly more out-of-pocket. MarketWatch offers a closer look at costs.

A home warranty isn't the same as home insurance. U.S. News explains the difference in detail. To sum it up, home insurance covers damage due to perils (like storms). It does not cover damage caused by wear and tear, which a home warranty does. Also, homeowner's insurance covers other parts of your home (like the walls, windows, flooring, and more). Many homeowners have both insurance and a warranty.

When might you need a warranty? What are the benefits?


Home warranties are popular with sellers (people who are selling their houses). Sellers often pay for a home warranty plan as an extra incentive for buyers. Also, a good warranty sometimes reduces the liability for sellers who are responsible for repairs and are legally required to provide a well-maintained home at the time of closing. Note that sellers aren't required to repair the house if they disclose the defects, but that's not exactly a selling point.

Any other homeowner can also benefit from a home warranty. A good warranty covers the cost of repair of several critical systems, which can save you money. The warranty company also provides the servicemen needed for repairs when you call them, which saves you from having to find people yourself. Last but not least, a warranty can be a good buffer when you don’t have a big pile of savings to draw upon for emergency repairs.

Keep your home warranty and other documents organized digitally


Organizing your home warranty documents digitally will make it easier to submit your paperwork when you need to file a claim (or reference the fine print in your contract). Organizing your other home documents digitally can also help you find the paperwork or information you need quickly. You can store files on your computer or in the cloud in PDF. If you need to share files, PDFs are often the preferred format over Microsoft Word, Excel, and PowerPoint. You can use an online resource that allows you to convert these types of files to PDFs; this may help and it's as simple as dragging and dropping them into the tool.

Finding the right home warranty


Keep in mind that home warranty companies are not insurance but service contracts. They aren't as heavily regulated. The service you’ll receive from company to company varies drastically. As such, it’s critically important you do your research and shop around when purchasing a home warranty. Here are some suggestions for finding something worthwhile:

  1. Consider your needs: To save money, find a warranty that matches your needs and nothing else. For example, if you have a brand-new home, chances are plumbing isn't going to fail anytime soon. A basic policy should suffice if that's the case.
  2. Check the company's reputation: Not every company delivers on its promises. Check the company's reputation. Read customers' reviews and see how satisfied they were. Look for companies with a history of prompt, fair service.
  3. Shop around: You should get quotes from multiple companies, and compare plans offered. Read the contract carefully and check for surprise expenses.
  4. Be persistent: Home warranty companies can be as stingy as insurance companies. If you need to use your warranty, don't be afraid to put your foot down. Be firm, persistent, and insist on receiving the service you paid for. Knowing your contract inside out always helps.

Special note for sellers


If you're selling your home, you have to comply with several legalities besides providing a repaired house (which a warranty can help with). For one, you will need a Sewer Discharge Certificate, which is obtained from the local government. You’ll also have to ensure the title is clear of defects, for another. There are dozens of small details to consider. An experienced realtor can help you get organized and compliant (or you can use an attorney). It’s a good idea if you make a file for all the paperwork.

Besides the official requirements, you should keep important telephone numbers for utility companies on hand. You’ll have to contact them when the closing date is set up. Also, if you’ve made any recent renovations, maintain the receipts (to show the home inspector for a better evaluation). Lastly, keep a list of the service people you use for convenience.

Shopping for the Best Warranty


A good home warranty can offset repair expenses on expensive home systems and appliances – and sometimes cover them fully. The right warranty can be a good investment – especially for sellers looking to sell their homes or homeowners who own aging homes. In all cases, it's a good idea to shop around and carefully consider a plan's details before you pick up the warranty.

ApplianceAid is here to help you find the parts and repair resources you need.

Image via Unsplash.


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