Whether you’re a pro or a first-time home buyer, there’s one thing all homeowners have in common: the need for a home warranty. Home warranties are service agreements that cover repairing or replacing your home’s major appliances and systems, like your furnace, water heater, and air conditioning. Unlike homeowners insurance, which protects your home against damage from natural disasters and other events outside of your control, a home warranty is designed to cover the cost of repairs for items that break due to normal wear and tear.
Shopping for a home warranty can be daunting, but it doesn’t have to be. In this blog post, we’ll walk you through the steps of shopping for a home warranty, from understanding the different types of coverage to evaluating pricing and reviews. You’ll be an expert on home warranties when you’re finished reading!
Types of Coverage
One of the first things you need to understand when shopping for a home warranty is the available types of coverage. Most home warranties will fall into one of three categories:
- Systems coverage: Systems coverage typically includes your home’s HVAC system (heating, ventilation, and air conditioning), electrical system, and plumbing system.
- Appliances coverage: Appliances coverage usually includes your oven, refrigerator, dishwasher, washer/dryer, microwave, and garbage disposal.
- Comprehensive coverage: Comprehensive coverage includes everything in the previous two categories plus any additional appliances or systems not already covered.
Determine Your Coverage Needs
Now that you know the different types of coverage, it’s time to determine what type of coverage you need. Start by listing all the major appliances and systems in your home. Then, decide which ones you would feel comfortable repairing or replacing yourself and which you want to be covered by a home warranty.
For example, suppose you’re handy with tools and comfortable doing your home repairs. In that case, you may be comfortable repairing a broken dishwasher yourself. On the other hand, if you know nothing about plumbing and would rather not risk making things worse, you should opt for comprehensive coverage that includes your home’s plumbing system.
Evaluating Pricing
Once you’ve determined what type of coverage you need, it’s time to start evaluating pricing. Home warranty companies typically charge a monthly or yearly fee for their services. In addition to the base price, you may also be responsible for a service call fee every time you use your home warranty. This fee is usually between $50 and $100, but it can vary from company to company.
When evaluating pricing, compare the base price, service call fees, and other additional charges. Also, some home warranty companies offer discounts for bundled coverage, so you can save money by purchasing multiple types of coverage from the same company.
Find Reputable Companies and Read the Fine Print
Once you’ve compared pricing and coverage options, it’s time to start looking for reputable home warranty companies. Start by asking your friends, family, and real estate agent for recommendations. You can also read online reviews from sites like Angie’s List, the Better Business Bureau, and Yelp.
When you’ve found a few promising companies, it’s essential to read the fine print before signing up. Make sure to consider things like the length of the contract, the coverage limits, and any exclusions or limitations. For example, some home warranty companies will only cover items that are in working condition when you purchase the policy. Others may exclude certain repairs, like cosmetic damage or normal wear and tear.
Do You Need a Home Warranty?
Now that you know everything there is to know about home warranties, it’s time to answer the most critical question: do you need one? The answer depends on several factors, including the age of your home, the type of coverage you need, and your budget.
If you’re buying an older home, a home warranty can give you peace of mind knowing that expensive repairs will be covered. On the other hand, buying a new home may not need a home warranty since most appliances and systems will be under the manufacturer’s warranty.
Ultimately, the decision whether or not to purchase a home warranty is up to you. Just be sure to research and shop for the best coverage at the best price.
The Bottom Line
Home warranties are an important part of ownership but can also be confusing and overwhelming. We hope this blog post has helped demystify the process of shopping for a home warranty. Now that you know what to look for in terms of types of coverage and pricing/reviews, you’re well on your way to finding the perfect home warranty for your needs!
Source:
How to Buy a Home Warranty, usnews.com
