What if something breaks under a home warranty?
Moving into your first home can be a thrilling experience, but unexpected home repairs can quickly dampen your excitement. If your water heater breaks down only a few months after moving in, you might wonder what to do, especially if it’s relatively new and expected to last a few more years. Hopefully, you invested in a home warranty, which can offer relief. Understanding how to use your home warranty when something breaks in your home is crucial in such a situation. Although home warranties have some limitations, they can be a valuable tool for overall protection against expensive repairs by simply filing a claim.
How does a home warranty work?
When you buy a new home, you can add a home warranty. The home warranty provides coverage for the major systems in the home and most of the major appliances. Most warranties last a year — good news for homebuyers. You just made the biggest purchase of your lifetime, and you may not be ready to pay a few thousand dollars in the next year to overhaul the electrical system.
Home warranties are different from home insurance. You can file several home warranty claims without paying more for coverage. Filing a home insurance claim can sometimes drive up your rates. However, many home warranties include a coverage cap, so read your policy carefully.
Understanding your home warranty contract
The first step in making a home warranty claim when something breaks in your home is understanding your contract. It’s important to read the contract carefully and understand what is and isn’t covered. Some warranties have exclusions and limitations, so be sure to ask questions and clarify any confusing terms or conditions. Make sure you understand the following:
Covered Items: Review the list of items covered by your warranty to ensure that the item you need repaired or replaced is covered.
Claim Limits: Most home warranties have limits on how much they will pay for a claim. Review your contract to determine the maximum amount the warranty will cover.
Deductibles: Some home warranties require a deductible to be paid by the homeowner for each claim, so you will need to determine if there is a deductible and how much it is.
Service Fees: Warranties often require the homeowner to pay a service fee each time a claim is made.
How to use your home warranty
Once you understand your contract, it’s time to make a claim. Here are the steps to follow:
Step 1: Contact Your Home Warranty Provider
The first step in making a home warranty claim is to contact your provider. Most home warranty companies have a 24/7 claims hotline that you can call to report your issue. You’ll need to provide your contract information and a description of the problem you’re experiencing.
Step 2: Wait for a Service Provider to Be Assigned
After you’ve reported your claim, the home warranty provider will assign a service provider to assess the problem. The service provider will contact you directly to schedule a visit to your home.
Step 3: Meet the Service Provider and Explain the Problem
When the service provider arrives, explain the problem you’re experiencing and provide any relevant details, such as when the problem first occurred and how often it has happened. Be sure to also provide access to the item that needs to be repaired or replaced.
Step 4: Wait for the Service Provider to Repair or Replace the Item
The service provider will assess the problem and either repair or replace the item, depending on your warranty terms. If a replacement is necessary, the service provider will typically order the replacement part and return it to complete the repair once it arrives.
Step 5: Pay Any Required Fees
You may be required to pay a deductible or service fee, depending on your contract. Review your contract and understand any fees you may be responsible for.
Using Your Home Warranty to Its Full Potential
To make the most of your home warranty, here are some tips to keep in mind:
Perform Regular Maintenance: Many home warranty claims can be avoided by performing regular maintenance on your home’s major systems and appliances. Follow the manufacturer’s recommended maintenance schedule for each item covered by your warranty.
Keep Detailed Records: Keep a detailed record of all maintenance performed on your home’s major systems and appliances. This can be helpful in the event of a claim, as it can demonstrate that you have taken proper care of the item.
Understand Your Responsibilities: It’s important to understand what responsibilities fall on the homeowner and what responsibilities fall on the home warranty provider. For example, some warranties may require the homeowner to perform certain maintenance tasks, such as changing air filters, in order to keep the warranty in effect.
Choose a Reputable Home Warranty Provider: Do your research and choose a reputable home warranty provider with a good reputation for customer service and prompt response times. Read reviews from other customers and ask for recommendations from friends and family.
Keep Your Contract Up to Date: Make sure your home warranty contract is up to date and that you understand any changes that have been made. For example, if you’ve added new appliances to your home, you may need to update your contract to ensure they are covered.
Why was my home warranty claim denied?
They may deny your claim if you don’t keep up with routine maintenance. For example, suppose you don’t get the ducts in the HVAC system cleaned in the fall, and something breaks down that winter. In that case, the home warranty company may not cover repairs to your HVAC system.
Improper installation is another reason the home warranty company may deny your claim. This one is tough because it’s usually out of your control. The previous owner did something incorrectly or hired an inexperienced contractor that messed up. Now you have to pay the price. Hiring a good home inspector before you finalize your property purchase may help you avoid this issue.
If you’ve improperly used an appliance or system, the damage you encounter could be considered unusual wear and tear. As a rule, home warranty companies don’t cover anything broken by user error. The system has to address a problem from typical use.
Coverage caps can apply to a specific system or residence as a whole. For instance, you may have limited coverage for your electrical system but no limit on appliances like the oven or stove.
A home warranty can provide a valuable money saver for homeowners when unexpected breakdowns occur in their home’s major systems and appliances. You can make the most of this valuable coverage by understanding your contract, knowing how to make a claim, and using your warranty to its full potential. Remember to perform regular maintenance, keep detailed records, understand your responsibilities, choose a reputable provider, and keep your contract current. With these tips, you can rest assured that you’re getting the most out of your home warranty.
If you are a homeowner or are planning to buy a home, consider adding a home warranty to your to-do list. It’s a financial safety net that can shield you from unforeseen expenses related to your home’s systems and components.
