Questions to Ask When Selecting a Home Warranty
If you’re a homeowner, you should already have some form of home insurance coverage. But this policy won’t cover everything, which is why getting a home warranty is a smart move. Before you sign on the dotted line, you must know what to look for when buying a home warranty. Unlike home insurance, this plan covers the cost of repairing or replacing appliances and systems, such as plumbing or electrical, in case of an issue or a breakdown. This guide has some important home warranty questions you should ask before you commit, so read on to learn more.
Top questions to ask a home warranty company
Before purchasing a home warranty, here are some of the most important questions you should ask. Getting the answer to these warranty questions ahead of time will ensure you’re making the right choice and will also give you peace of mind.
What does the warranty cover?
The most important of all warranty questions is to find out what the plan covers. Make sure you create a comprehensive list of the major appliances and systems in your home, then find out whether or not the warranty covers some or all of them. Remember that most home warranties have a few conditions. Most plans won’t cover extremely old appliances or anything with a “pre-existing condition” or prior issue. Use the information you get to help you choose a policy that covers your needs.
What does the warranty not cover?
Once you know what the home warranty covers, you’ll also need to be clear about what it doesn’t cover. For example, these warranties will not cover damage to your home’s structure, which is usually something that homeowners’ insurance takes care of. The warranty will also not cover issues related to improper installation, damage or malfunction due to neglect or misuse, or anything related to natural disasters. They also won’t cover problems like asbestos, pests, or mold.
Who pays for a home warranty: buyer or seller?
Suppose a home seller already has an existing home warranty. In that case, they can transfer the coverage to the buyer when they close on the property. However, most home warranties are paid annually, meaning the buyer will have to pay for the coverage themselves once it’s up for renewal. When asking who pays for a home warranty – the buyer or the seller, the answer is that it depends. Some sellers will use the warranty as a selling point and a perk to buying their home versus other homes that may not have coverage. Buyers can also choose to purchase a home warranty voluntarily on their own after they buy the house.
How much do service calls cost?
Most home warranty companies will charge you a flat annual or monthly fee, but there is an extra fee for service calls if something breaks. Make sure you know what the service call fee is before committing. The cost of a home warranty for a seller or a buyer in terms of the service fee should always be the same. It usually depends on your location, the age of the home, and other factors, not who’s buying or selling the home. Be sure to get a complete list of all the fees involved with a home warranty, so you know what to expect if you ever need help with repairs.
Is there a waiting period for coverage?
Some home warranty companies have a 30-to 60-day waiting period after you enroll. Others have no waiting period, meaning you’re immediately covered if something goes wrong. Most homebuyers get immediate coverage as soon as they close on a new home. If a seller chooses to add a home warranty when they sell, some companies will start the coverage as soon as the plan is ordered. Always look at the fine print to determine whether or not your specific plan has a waiting period attached to it.
How fast will the warranty company respond when something breaks?
If an appliance or system in your home breaks down, you want fast action to address the issue. Some problems require immediate attention, such as a leaky pipe or a non-working HVAC system. Ask the warranty company how quickly they respond to service requests and whether or not they are available to you 24 hours a day, seven days a week, including on holidays. Some companies may only be available during standard business hours. How fast you receive a response also depends on what contractors the warranty company uses, the current demand for service calls, and the urgency of your specific issue. Always be clear if you’re facing a serious emergency when calling your warranty company so they can send help as soon as possible.
Can I upgrade my warranty plan?
Eventually, you may purchase additional appliances in your home that need coverage. If so, you’ll want to ensure that the warranty company allows for upgrades. Find out which types of add-ons and upgrades are available, and make sure you know how much they will cost. In some cases, new appliances or upgrading a system in your home could save you money rather than cost you more since they’re newer and less prone to break or fail. Find out if additional services are available, including things like pest control to help protect your home.
Who are the contractors the warranty company uses?
Home warranty companies utilize specific contractors in your area to provide service. These contractors partner with the home warranty company and are sent to your home whenever they receive a service call request. Ask the warranty provider for a comprehensive list of the contractors they use. Doing this will allow you to research the contractors and determine whether you think you’ll be happy with their services. It’s also essential to ensure that the warranty provider vets their contractors and that they are fully licensed, bonded, and insured.
What to look out for when selecting a home warranty
Once you’ve received answers to the top questions, knowing what to look for when buying a home warranty is essential. Here are a few important warning signs or possible issues that may arise, even if you have enrolled in coverage and have done your homework.
Exclusions and limitations
Every home warranty plan has some form of exclusions and limitations. The exclusion portion includes specific items, parts, or issues not covered under your contract. The warranty limits refer to the specific monetary amounts the company will pay if you need to have a system or appliance repaired or replaced. You will pay for the difference out of pocket if the cost exceeds these limits. Ask for a sample contract to look more closely at what types of exclusions and limitations are included before you commit.
Pricing
If you’re on a tight budget, then paying for a home warranty plan might not be right for you. Remember that these companies charge you a monthly or annual premium in addition to the cost of a service call (if you need one). Yearly premiums typically cost anywhere from $250 to $600, while service calls usually range between $50 and $150. The service call fee is paid to the contractor when they arrive so they can diagnose the issue. You may also have to pay for a separate service call if the need arises. Find out what type of “rules” your warranty company has regarding a one-time versus multiple service call fee.
Company reputation
As with anything you buy, it’s important to check for customer reviews to find out what others think about the home warranty company. Make sure that the company also has a minimum of a B rating from the Better Business Bureau (BBB). Look carefully at customer reviews online to understand better what the company offers and how easy they are to work with. If you’re a new home buyer, ask your real estate agent or mortgage lender for a list of home warranty providers they recommend.
Why you should get a home warranty
There are several circumstances where a home warranty is extremely beneficial, especially if you own an older home and/or have older appliances. Suppose you’re looking to limit the amount of money you need to pay for various repairs or replacements for appliances and systems in your home. In that case, a warranty is a great way to do so. First-time homebuyers often choose to get a home warranty for peace of mind, as do sellers who want to offer a perk to potential buyers. And, if you’re new to an area or unfamiliar with local contractors, a home warranty will take care of this for you.
Now that you know the top questions to ask when selecting a home warranty, you can find the right plan. A home warranty will protect your appliances and major systems and help you save money. Always make sure that you look at reviews, read the fine print, and do your research before committing to a home warranty policy.
