5 Things You Should Know Before Buying a Home Warranty
1. Home Warranties Are Written for a Specified Period of Time.
Home warranties are similar to insurance policies because they are written for a specified length of time. Most home warranties cover your property for one year, but your coverage doesn’t have to end at that time. You can renew it before the expiration date so that your home will be continuously protected.
2. Companies May Have Basic, Gold and Individual Plans.
You can purchase a plan that is tailored just for your needs, or you can obtain a policy that offers basic or more extensive coverage. One example is a home warranty that covers the systems in the house, such as the air conditioning, the heating, the electrical system, the plumbing, the water heater, doorbell and ceiling fans. Another plan may cover the appliances, like the trash compactor, refrigerator, dishwasher, clothes washer, clothes dryer, ovens and cooktop. The type of plan you will ultimately purchase will depend on the company from which you purchase it.
3. Prices Vary.
As was mentioned above, you have several options when determining which plan to purchase. Since they are all different, you can expect them to come with varying purchase prices. Basic plans cover the least, so they tend to cost less than premium plans. This means that a home warranty may cost between $250 and $600 for the year.
4. Deductibles Apply.
Like with insurance, home warranties require that you pay a deductible, and the amount you will owe will depend on the home warranty company and the type of plan you purchase. Generally, these sums range from $50 to $100 per incident, but the good news is that this price will be all that you will need to pay at the time. In contrast, calling an HVAC specialist without the benefit of a home warranty may cost much more than $100.
5. Contractors Work for the Home Warranty Company.
One possible drawback is that you will not be able to decide on your own which contractor is going to do the work that needs to be done. However, the money that you save with a home warranty may be enough of an incentive to relinquish this control.