5 Things to Consider While Purchasing a Home Warranty Plan

Homeownership comes with its own set of expenses.

There will be property tax, home insurance, and home maintenance charges you will have to pay.

There is normal wear and tear of home appliances such as washers and refrigerators that you need to account for.

At some point of time, your systems such as HVAC, plumbing, and electrical may also malfunction.

Getting these repaired or replaced might make a big hole in your wallet. This is where a home warranty plan comes into the picture.

A home warranty plan is actually a contract that you sign with a company that agrees to cover the repair costs on certain selected items in your home. These plans normally cover any breakdown due to normal wear and tear. However, they may not cover any damage or malfunction that might occur due to misuse, neglect, or natural disasters.

There is no saying when an appliance or home system might fail. If and when this happens a home warranty can give you the peace of mind that things will be taken care of. You won’t even have to search for a contractor or repair technician, as the home warranty company will provide you one.

You may not need a home warranty if you have decided to purchase a new home. The systems and appliances will be new and covered by the manufacturer’s warranty. Nevertheless, these warranties only cover damages or malfunctions due to faulty installations or defective materials. And they last only for about a year or two.

Hence you should ideally purchase a home warranty if you own an old home and don’t want to pay for repairs and replacements of your appliances and systems from your pocket.

There are many home-warranty companies you can get in touch with, through home warranty leads. Nevertheless, before finalizing your decision, here are a few things you need to consider:

Identify the type of home warranty plan you need

Determine what are the items you need coverage for, before buying a home warranty plan. The plan you choose depends both on the type of items and the number of items that need to be covered. Weigh your coverage options well before purchasing a plan.

Go Through Sample Contracts

Since there are a number of things involved when it comes to home warranty, it is better to read a sample home warranty contract before purchasing. This will help you understand what is the coverage you get and what kind of limitations are included.

Check Out the Coverage Caps

At times certain coverage caps are placed on certain systems and appliances. Although these may cover the repair costs, they may or may not cover replacement charges. Anything above that coverage cap will have to come out of your pocket.

Compare the Pricing

Price is definitely one of the main factors when deciding on a home warranty plan. Look for plans that fit into your budget. Monthly payments may be more affordable in case you find it difficult to pay that hefty upfront fee. Make sure you get a clear idea of the deductibles and service call fees that you will have to pay.

Verify the Quality of Customer Service

Make sure the company you choose has a helpful and responsive customer service team that is available 24/7. A few companies even offer the option of filing claims through their app or online portal.

Get quotes from at least three reputable home warranty companies. Compare their contracts, costs, and limitations before finalizing your decision.

The Bottom Line

A home warranty plan seems like a must-have when you are buying a slightly older home, which may not include new home appliances and systems. Nevertheless, you have to understand that not all types of damages may be covered by the company. Hence, it is recommended to also maintain an emergency fund, which you can use for any unforeseen expenses.

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