What Does It Mean When It Says an Amount of Money Is the Deductible?
Home warranties require that you pay what is called a “premium.” You can pay this amount up front in one lump sum, but this is not possible for everyone. Therefore, home warranty companies may allow you to pay your premiums on a monthly, quarterly or semi-yearly basis. The fact is that premiums are not the only amount you will have to pay when you purchase a home warranty; you will also have to pay the deductible.
The Deductible Explained
In the contract you sign with a home warranty company, the organization will agree to pay a portion of a service call’s cost. The other portion will be paid by you, and it is called the “deductible.” Every time that you contact the company because there is a problem at your home, you will be responsible for paying the deductible when the contractor arrives to fix the issue.
Suppose that you have a problem with your air conditioner. You call your home warranty company who sends an in-network contractor to your home. The contractor fixes your air conditioner, and you pay the deductible for the service. Typically, deductibles for service calls range from $50 to $100. If the amount of the service is less than the company’s fee, you are only responsible for paying the amount charged for the service.
The Value of Home Warranties
If you believe that paying $50 per incident is out of your reach, you may be able to find a plan that doesn’t have a deductible. However, these plans are few and far between. The fact is that home warranties help people save a lot of money even though clients are required to pay a service fee with every incident. When the appliances, the electrical system or the plumbing system need attention, you will need to call someone to have them repaired, and it will require that you pay a cost.
Home warranties actually pay for themselves even with a deductible. Plumbing issues can cost you thousands of dollars to fix if they are serious enough. Although a home warranty policy may not cover the entire cost, the sum that the company pays reduces what you are responsible for paying.