7 Questions to Ask Before Buying a Home Warranty

If you deal with properties, you may have heard the term ‘home warranty’ being tossed around quite a few times, or the buyer or seller may have mentioned it to you. If you don’t know what it means, a home warranty is a residential contract done for one year that covers the repair and replacement of home appliances and systems. It’s different from homeowner’s insurance.

You should check the home warranty option when buying a house. A well-constructed home warranty contract protects the home system and appliances by covering the repair and replacements. You should consider getting a home warranty if you already don’t have one. However, you must ask yourself a few things before you can opt for a home warranty. We have listed seven important questions for you below.

Do you need a home warranty?

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A home warranty isn’t the same as homeowner’s insurance. Check the latter to see the kind of coverage you’re already getting. Usually, the insurance doesn’t cover the repairs and replacements of home appliances. You have to pay the repair cost if they break down, and it can be expensive. Therefore, it’s imperative to do your research on what does a home warranty cover when buying a house and check with your seller to understand the coverage and opt for the best home warranty plans. The seller usually offers it to the buyer when closing the sale. If you don’t get the offer, you will hear from home warranty services or companies to buy a plan for your home once the deal is closed.

How much will it cost?

A home warranty costs a few hundred dollars. You might have to pay the entire amount upfront or in monthly installments. The type of property determines the amount payable, however, the size might not affect the amount. But a change or enhancement in structure might increase the cost. New houses also increase the cost of coverage.

Apart from the cost, every service request will cost around $60 to $100 for repair or maintenance. If more than one service is required, the homeowner must pay for them separately.

What does the contract cover?

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Coverage is the most important part of a home warranty contract. If you’ve dealt with these contracts before, you know what to expect from them. However, if you don’t know about them, check your house to list down the appliances that might need repairing or replacement soon. Try to include them in the contract. Also, include expensive appliances or systems. 

Expect to find loopholes in the contract terms and conditions. Many people don’t understand the policies and parts of their appliances remain excluded from the coverage. Understand when the appliances won’t be replaced. Bad handling or using them on modes not mentioned in the contract means they won’t be replaced if damaged under those circumstances.

What are the limits of the company?

Every home warranty contract will have some monetary limitations and exclusions. Exclusions are parts of appliances that will not be covered by the contract. The monetary limits are the maximum amount the warranty will cover to replace or repair your appliances. The homeowner will have to bear any additional expenses.

The monetary limit can be on specific appliances or items. It can also be on a certain amount for all repairs and replacements. Contracts usually set a certain limit for all types of repairs and replacements and the homeowner pays the rest.

Check your contract thoroughly to see what option is available for you. It helps you narrow down the contracts and pick the best one.

Does the company hire licensed technicians?

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As home warranty deals with repairs and maintenance, the company needs to staff trained and licensed technicians. Discuss the details with them before signing a contract and also ask them to show the license. Many states require such companies to have licensed technicians only for any type of home maintenance job. Licensed technicians also ensure quality service and prevent any risks of mishaps. It also protects your rights as a customer. Check local forums for reviews on the company and cross-check its credibility before signing a contract with them. 

Will the company repair or replace your appliances?

Many contracts only mention partial replacement or only repair. In cases where the repair cost is too high, the company might offer a replacement, but it can vary depending on the item in need of maintenance.

A good way to learn about it is to go through the terms and conditions thoroughly. They should indicate which items are only suitable for repair and which items can be replaced. Check the list of limitations or exclusions to see if your desired items fall under them. In that case, you won’t get a replacement for that item.

Does the company have a good reputation?

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And finally, check the reputation of the company to understand whether they’re worth the effort and money. Ask the company for previous testimonials or reviews. Check online for ratings and reviews from homeowners who have used their services before. Your appliances and home systems are sensitive, and wrong maintenance can damage them further. So, don’t take the risk of signing with a mediocre company. 

A home warranty can save you a lot of trouble and provide consistent maintenance for your home appliances. However, choosing the wrong company can create a lot of problems for you. Do your research to understand the home warranty contract and its limitations, and check the background of the company before hiring them to get a hassle-free experience.

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