Home Warranty Plans and Benefits

ByTop10.com StaffOct.21, 2018

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Woman choosing a home warranty plan
After purchasing a home it’s important to look into the benefits of buying a home warranty plan. While home insurance covers the building itself, a home warranty protects the appliances and systems within it.

Your insurance might cover natural disasters or emergencies such as fire or flooding, but your warranty is the cover you need for usual wear and tear and breakdowns.

A home warranty can benefit a variety of people, including:

Homeowners

  • Appliance breakdowns are bound to happen, but a home warranty ensures that fixing your appliances and services is seamless and efficient, getting them up and running in as little time as possible.
  • If just one breakdown happens in a year, this could cost hundreds of dollars to fix. A home warranty limits the cost of fixing appliances to one flat monthly or annual fee, plus a service fee ($60-$100).
  • There is no cap on the number of appliances fixed in a term. As long as they come under coverage, you receive the needed repairs.

Home Sellers

  • A great perk to offer potential buyers, as most policies will just roll over to the buyer.
  • Helps protect against legal disputes which may come up post-sale about goods included in the sale and systems within the home.
  • Increases how marketable the home is, giving your property an edge in the local housing market.

Landlords

  • Never worry about unexpected costs for repairs or heavy use by tenants. Just one flat fee and all repairs and breakdowns are covered.
  • Provides easy access to local qualified and competent contractors.

How Does a Home Warranty Work?

Most home warranty companies charge a monthly or annual fee to cover a wide range of appliances and systems in the home. When something breaks down or becomes damaged, you simply get in touch directly with your warranty provider. From that point, you can sit back and relax. The warranty company will provide a contractor to come to your home ASAP, assess the damage and fix the problem at hand.

If the appliance or system is unfixable, the warranty provider will often replace it, or in some cases such as with Choice Home Warranty, offer the value of the item in cash so that you can choose a suitable replacement yourself. Most appliances tend to start showing signs of wear and tear after a year of ownership, so plan ahead and don’t wait for it to break first, as most companies don’t include already broken equipment in the policies.

Will a Home Warranty Save Me Money?

Home warranties vary in price, but most cost about $300/year or $35/month, with even the most expensive under $500. Some companies like Select Home Warranty even offer 2 months free of charge. Also factor in an added service call fee, which is around $60 per call.

Repairing or replacing items without a home warranty plan can become extremely costly. Throw in the extra stress of finding a good contractor and dealing with the administration hassle and it’s easy to see why many people plan ahead and buy a home warranty plan.

Some companies such as Advanced Home Warranty, offer multiple subscription options such as a Basic and a Total plan. This allows you to look over the systems and appliances covered in the Standard option, and save yourself some money if you don’t need the bells and whistles of the more expensive plan. 

Some companies don’t offer prices on their site, only offering precise quotes over the phone. This usually means that the company wants to consider the number of appliances you have, or the size and location of your home before giving a price. An advantage of this system is that you can try to get a better deal or special offers through customer service, especially as a new customer. 

It’s also worth asking your provider what the claims limit is. While most will be around $2,500 or $3,000, some companies offer exceptional liability such as AFC Home Club which caps out at $7,500.

Which Features Should I Look for in a Home Warranty?

Obviously one of the most important elements when choosing a home warranty is what is covered within the plan. These can be split into appliances and systems.

Systems included in most Basic home warranty coverage are water/plumbing systems and electrical systems. Extended coverage usually includes heating, A/C, and septic systems.

When it comes to appliances, basic plans are likely to cover ovens/ranges/stoves, built-in microwaves, dishwashers, garbage disposals/trash compactors, garage door opener, ceiling fans/exhaust fans.

More comprehensive plans can include 

  • Refrigerators/freezers
  • Washer/dryers
  • Pool/spa
  • Stand-alone appliances
  • Whirlpool bathtubs

Some companies even offer fully-covered plans for one price, while others have targeted plans with unique quotes to cover whatever elements of your home need the support. It’s worth looking thoroughly around your home, and writing a list of the items you would like protected. Talk this through with customer service and ensure they can offer you the coverage you need. Even if the item isn’t listed in their standard plans, they may well be able to accommodate you.

Once you know that your home warranty choice covers the appliances and systems that you need, it’s also important to check out the customer service. Arguably the most important consideration is the help you get when you need it.

Select Home Warranty offers 24/7 customer service, which we would always recommend looking for when you sign up for any kind of warranty. If your electrics stop working over Labor Day weekend, or your oven stops working out of business hours with dinner for 4 inside, you want to know that the help you need is only a phone call away.

If you would rather type than talk, look for a home warranty company with 24/7 live chat from the website, or an online claims system such as Choice.

The last important element is the contractors who will be sent to your home. As well as choosing a company who gets your claim to a contractor quickly, you also need to be sure that the people entering your home are fully vetted, trained and qualified to do a superb job. It’s reasonable to ask your company of choice what training and monitoring systems they employ with their contractors before you sign on the dotted line.

Are There Any Extras I Could Benefit From?

The main elements to look for are extensive coverage, reasonable costs, and efficient and qualified contractors. Some home warranty providers have extra incentives to encourage customers to sign up. 

A great example of this is AFC. Whichever warranty protection you sign up for, users will be entitled to member perks of their exclusive Home Club. These include a monthly gift certificate to Restaurant.com, cashback with some of America’s top online stores (including Target, Bed Bath and Beyond and Macy’s) and even complementary medical alerts through the Emergency Alert Network.

How Can I Choose the Best Home Warranty Plan?

It might feel like many of the best home warranty companies are very similar, making it difficult to make a final decision. It’s true that the small variations in subscription prices, call out fees, and contractor reputation can make all the difference in a time of crisis. We’ve put together in-depth reviews of top home warranty companies to make it easier for you to choose a plan.