What is Home Warranty?
Whether you like it or not, your home appliances will break and would need fixing. If you want this fix to happen effortlessly, you need home warranty coverage.
Now, you should not confuse home warranty coverage with homeowner’s insurance. Homeowner insurance covers natural occurrences, like fire outbreaks, water damage, and any other thing that can damage the structure of your home. Home warranty coverage pays more attention to repairing or replacing the equipment and systems used in the house.
Home Warranty Coverage Explained
A home warranty is a contract between homeowners and home warranty companies covering the cost of maintaining the systems or appliances in a home over an agreed period of time.
Why You Should Have Home Warranty Coverage
A home warranty is highly recommended for a homeowner who does not have the finances to cater to emergencies.
For people who might lose their mind over the cost to fix broken things in the house, a home warranty can act as a buffer when they have such problems.
If you have eyes for luxurious gadgets like smart-home gadgets and appliances, you should get a home warranty to cover such items since their repair cost would likely be very expensive.
What Does Home Warranty Cover?
A home warranty is an optional coverage you can purchase for some major appliances or systems in your home. After contracting a home warranty company, you can pay a monthly or yearly fee to help offset maintenance or repair costs of those covered appliances, depending on the signed agreement.
A home warranty can cover systems like:
- Electrical
- Heating
- Plumbing
- Ductwork
- Air conditioning system
- Smoke detectors
- Doorbell
Most appliances that a home warranty can cover include:
- Refrigerator
- Spa equipment
- Garbage disposal
- Dishwasher
- Oven, cooktop, range
- Garage door opener
- Built-in microwave
- Clothes washer and dryer
There are several things a home warranty company could cover. Still, it boils down to which items the homeowner thinks are more valuable and expensive to repair or replace.
What Does Home Warranty Not Cover?
Not all types of appliances or system damages are catered for by the home warranty company. A home warranty will likely not cover an appliance or system if:
- The items were faulty before the home warranty started
- The damaged or broken items were caused by a lousy installation or poor maintenance
- An item has been used for purposes other than its original purpose
How to Make Sure You Have Enough Coverage
To ensure you have adequately covered your important items, you must:
- Make sure all big and expensive items are covered first.
- Be sure that all appliances and systems were installed correctly.
- Make certain multiple items are covered — the refrigerator in the kitchen may be covered, but what about the one in the garage?
- Use a professional and reliable home warranty company as they can guide you on things you will want coverage for that you likely didn’t think of.
Best Home Warranty Companies
Some of the most reliable home warranty companies include:
- Landmark Home Warranty
- American Home Shield
- Select Home Warranty
- First American Home Warranty
- AFC Home Club
- Choice Home Warranty
- Old Republic Home Protection
In a review by U.S.News, Landmark Home Warranty topped the list as the best home warranty company in 2020 with a monthly plan of $61.25 and an annual plan of $56.25 per month, followed by American Home Shield with a monthly plan of $60.
Why You Should Get Home Warranty
You should get a home warranty if you have and use older appliances and systems as they are more likely to malfunction. Also, as mentioned already in this article, if you use expensive appliances.
Other reasons why you should get a home warranty include:
- Value-added savings: Some home warranty companies offer extra saving opportunities, like the American Home Shield’s Appliance Discount Program.
- Time management: You do not have to waste any time fixing things on your time.
- Budget protection: You can spend the money for repairs on other things.
- Peace of mind: No need to worry about fixing anything in your home.
Are There Any Cons?
Just as you might have guessed, a home warranty is not perfect. There are a few drawbacks you should be aware of. Some of them include:
- If you woke up to find a tree fell onto your roof or a flood swept half your property away, a home warranty is unlikely to cover those damages.
- A home warranty company may choose repair instead of replacement — everyone wants to spend less, including the contractors, and in cases where the most effective solution would have been a replacement, the company might choose to repair.
- Not everything is covered.