Choosing the Right Home Warranty: A Guide to Types and Options

Choosing the Right Home Warranty: A Guide to Types and Options

A home warranty is designed to protect one of your biggest assets. When choosing a plan, you must confirm that it will provide the coverage you need. These plans pay for the repair or replacement of covered systems or appliances, and you don’t want to learn that a certain item isn’t covered when it fails. With multiple options to select from today, how can you know what home warranty to buy? This guide helps you compare the types and options to find the right fit for your situation.

What is a Home Warranty?

The first question you may ask is, “What is a home warranty service agreement?” Think of this warranty as a service contract that covers multiple items in the home. When you purchase a new appliance or system you might buy this type of contract. However, it only covers that specific item. A home warranty offers broader coverage, and the term is typically one year. When the term ends, you choose whether to extend the warranty,

A home warranty is not the same as homeowners’ insurance. The warranty covers damage caused by normal wear and tear. Homeowner’s insurance, on the other hand, covers any damage caused by an accident or a natural disaster. For comprehensive coverage of the home’s systems and appliances, you need both policies.

Home Warranty Types

When you purchase a warranty, you must choose between basic and comprehensive coverage. The basic home warranty covers essential appliances and systems. These systems and appliances include your HVAC and plumbing systems. The warranty also protects electrical systems, the water heater, oven, cooktop, and dishwasher. Other items might be covered depending on the plan and warranty provider. The premium is lower than seen with a comprehensive home warranty, but the coverage is limited.

A comprehensive home warranty covers items found in the basic plan and extends this coverage to include appliances and systems such as the washer and refrigerator along with garage door openers and ceiling fans. Although a comprehensive plan comes with a higher premium, it covers additional components for your peace of mind.

What Should You Consider When Making This Choice?

Many factors need consideration when you purchase a home warranty. The warranty comes with a coverage limit. Any money due for the repair or replacement of a system or appliance is your responsibility. If you decide on a higher coverage limit, expect to pay a higher premium monthly.

Each time a technician visits the home to work on a covered item, you will pay a service fee or deductible. This fee varies by the provider selected, so compare the options. Some providers charge as little as $50 per visit. Others charge $125 or more.

Review the fine print in each warranty contract carefully to guarantee you understand what will be covered. Home warranties often have exclusions and limitations. You need to know what these are before purchasing, so there are no surprises when an item breaks.

Customer Service

Always read reviews before choosing a home warranty company, as you want a provider with a good reputation. Check with the Better Business Bureau to learn about any complaints lodged against a company. You need a provider with outstanding customer service and an easy claims process.

Never purchase a home warranty solely on price. You get what you pay for. With time and research, you can find a provider that will protect your home and keep its systems and appliances in good working order.

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