What is a Home Warranty?
A home warranty is a contract that provides customers coverage for repairs and replacements of major household systems and appliances due to normal wear and tear. It offers protection for unexpected breakdowns, including fixing or replacing covered items like air conditioning, stoves, refrigerators, washing machines, and plumbing systems.
How Do Home Warranties Work?
Home warranties help homeowners cover the cost of repairing or replacing appliances, systems, and other home items that break over time. When you purchase a home warranty, it's like having a security blanket for unexpected repairs. If something goes wrong with covered items, the appliance warranty company pays for repairs or replacements up to your plan's limit.
Should you have a problem with a covered item, you can call the warranty company and they'll send a technician to fix it. The technician will use parts from an approved list to repair or replace the item so that it works again.
You usually need to pay a small service fee or deductible for each repair or replacement job. Your plan will cover the rest of the bill up to your policy amount. This is why many people view home warranties as a worthwhile investment—you pay little to nothing if something breaks.
Are Home Warranty Plans Worth It?
Home warranty plans are worth it for most homeowners. They protect you from the steep fees of unforeseen repairs and replacements, especially for major appliances such as fridges or washing machines.
There are many reasons to get a home warranty plan, including peace of mind, and knowing that if something breaks down in your house, you may not have to pay as much to get it fixed. Many companies also offer extra coverage options, like for pools, spas, additional appliances, or systems, so you can customize your plan depending on your needs.
When Do You Need a Home Warranty?
A home warranty can be beneficial in many situations, whether you're moving into a new house or one that's been well-loved for decades. For those moving into a newly built house, a warranty provides coverage against defects and malfunctions in the home's major systems and appliances. It may even reduce total maintenance costs in the first year.
Getting coverage on an older house is also a good idea as it guards against expensive repairs due to aging and wear and tear. While most plans don't cover existing issues in older homes, there are a few home warranties that cover pre-existing conditions—allowing repair services to be done at a reduced rate or no cost at all.
How to Choose the Best Home Warranty Plan for You
When you're ready to purchase a home warranty plan, follow these steps to ensure you choose the best company for your needs.
- Research different plans and compare features: Read up on the various home warranty contracts available to determine which best meets your needs. Consider coverage limits, service fees, and other benefits each plan offers.
- Ask important questions: Reach out to home warranty companies to ask them any questions you have about their plans. Ensure you understand what's covered and if any restrictions or limitations apply.
- Get home warranty quotes from multiple providers: When you're ready to make a purchase, compare prices and ask for quotes from several providers. Make sure to read the contract's fine print before making a decision.
- Check for credentials: Look for companies certified by organizations such as the National Home Service Contract Association to ensure they're reputable and have proper licenses and regulations.
- Examine customer reviews: Read home warranty reviews from customers who've used the company before. Check how reliable, helpful, and responsive their customer service is, so you know how to submit a claim or repair request in the future.
What Does a Home Warranty Cover?
Basic home warranty plans generally include major appliances, offering coverage for:
- Refrigerators
- Dishwashers
- Washing machines
- Dryers
- Ovens and cooktops
- Garbage disposals
In addition, most home warranties cover these essential home systems:
- Electrical system
- Ducts
- Water heater
- Air conditioner
- Cooling and heating system
- Furnace
- Plumbing system
- Garage door
At an extra cost, many home warranties offer add-on coverage for the following items:
- Septic tanks
- In-ground pools
- Well pumps
- Sump pumps
- Septic systems
- Central vacuums
- Spas
- Water heaters
Cost Involved with a Home Warranty Plan
Home warranty plans usually cost between $300 and $600 annually, which comes down to $25 to $50 per month. Some companies offer monthly payment options but pay annually if you can, as many providers give discounts for this.
In addition, most home warranty companies charge a flat service fee or deductible each time a technician visits. This can cost anywhere between $60 and $150. There may also be fees for after-hours repairs, specific types of services, and other items not included in your plan. Read over your plan's terms and conditions to exactly understand its associated fees.
Why Buy a Home Warranty?
An additional layer of insurance for your home, home warranties can offset costly repairs or help fund replacements on major appliances and other items in your house. With a home warranty plan, you can preempt surprise expenses and enjoy peace of mind knowing that any issues under warranty will be taken care of.
What a Home Warranty Policy Can Offer Homeowners and Landlords
Homeowners and landlords can benefit from home warranty policies, as they cover the cost of repairs and replacements on major appliances and systems that will eventually break down. This is especially useful for landlords, who depend on rental income to pay bills and keep up with maintenance costs. With a home warranty plan, they don't have to worry about additional out-of-pocket repair costs.
Homeowners also benefit from knowing that if something goes wrong, they won't have to scramble to come up with the money or find a contractor to fix it. Customizable coverage options are available from most companies, letting homeowners choose the specific items they need protection for.
What Types of Home Warranty Plans Are Available?
Home warranty programs are a helpful way to protect yourself from expensive repairs. There are several types of home warranties out there, so it's crucial to understand each plan's coverage. Here's a breakdown of the different types of plans and what they cover:
- Appliance-only plans: Major home appliances such as cooktops, garbage disposals, refrigerators, and ovens.
- Systems-only plans: Home systems, such as plumbing, electrical, and HVAC.
- Comprehensive plans: Both major appliances and home systems.
- Add-on coverage: Items not included in your base plan, such as pools, spas, second refrigerators, septic tanks, sump pumps, and well pumps.
No matter what type of home warranty plan you choose, always read the fine print and ask questions before committing. That way, you can rest assured that the investment in your home is properly protected.
What Is Not Covered Under Warranty?
While home warranty plans provide homeowners with valuable protection, they may not cover everything. You often need a higher-tier plan or specific add-on to get some things covered. Here are a few items and situations that typically aren't covered under most warranties:
- Breakdowns due to improper maintenance: You'll have to pay for damages or malfu