19. February 2019
Home warranties take the hassle out of home ownership and give you peace of mind by protecting your family from unexpected and costly bills when major systems or appliances fail. However, coverage options vary widely from provider to provider and choosing the right plan can be tricky. Here is a checklist that details what to look for in a home warranty and how you can choose the provider that's right for you.
- Make a list of all your appliances and systems. Determine which ones are critical to your family's needs, are costly to repair or replace or are at risk of breaking down.
- Home warranties are designed to fill in the gaps left by homeowners' insurance, but there is potential, however small, for some overlap. Also, some of your appliances may be covered under other warranties. Check and compare these policies so that you're not paying twice for the same coverage.
- Verify which home warranty providers offer coverage in your area. Then narrow your search based on your priorities. Some providers offer fixed plans that cover a list of appliances or systems, some specialize in only a few specific ones, while others offer the option to customize your home warranty benefits.
- Understand the various levels of coverage. You may find that the advanced coverage offered by one provider is equivalent to the standard coverage offered by another.
- Take note of the pre-conditions and limitations to any coverage under consideration. Many plans won't cover appliances or systems with pre-existing conditions or costs that arise from improper installation or maintenance.
- Are you planning to sell your home? Ask if the home warranty is transferable.
- Determine the annual cost and what's included. The cost of home warranties varies significantly depending on where you live, the kind of home you live in and what you choose to cover. Some plans include additional services, while others have a more scaled-down offering.
- Ask about service fees or deductibles. Home warranties take care of much of the heavy lifting when it comes to repairing costs, but there still may be additional fees, such as one for each home visit if something breaks down. Compare any added costs.
- Establish whether there are limits on the maximum amount a provider will pay for repairs.
- Easy access to a service network is one of the biggest home warranty benefits. With just one phone call, you can schedule a home visit for a wide range of maintenance issues. Investigate how many in-network contractors service your area and make sure there are a variety of specialties represented.
- Inquire about the provider's screening process and selection criteria for their contractors.
- With some companies, the service provider may be different from the company selling you the home warranty. Make sure you can find contact information for the company that will ultimately be servicing your warranty.
- Ask about the provider's service level agreements, average response time and claims process. Many providers offer the convenient option of requesting service and filing a claim online, but it's also good to know that you can reach a representative when you need one. Compare the level of follow-up documentation each company may require.
- Check out consumer ratings and reviews to learn about other customers' experiences. You want to make sure you choose a reputable provider.
- Peruse a company's social media and online presence to help confirm its legitimacy and level of consumer focus. Is this a company that places the customer first?
- Verify that the home warranty providers you're considering are properly licensed if you reside in a state that requires it. These requirements vary by state.