Important Information to Know About Buying a Home Warranty


Purchasing a home is typically a large investment. The median cost of a home in the U.S. is $226,800, which is up 6.1% from the past year. As individuals begin to consider how they can protect the investment they make, they should not be tempted by all the home warranties offered online and on TV without first learning a bit more about these.

A home warranty can be a smart investment, and 2-10 HBW can help ensure a homeowner gets a great deal. However, before diving in and making a purchase, be sure to ask the right questions. Keep reading for helpful information about home warranties and what to consider to ensure the right one is purchased to protect the investment that has been made.

Understanding the Potential Limitations of Home Warranties

Having a home warranty provides peace of mind. However, it is important to understand that companies providing these plans may create “wiggle room” that makes it easier to deny making payouts when a claim is made. As a result, many consumers complain to the BBB about home warranties because they did not provide the benefits expected.

An alternative to a home warranty is to self-insure. For example, the money that would be spent on a home warranty can be put into a savings account that is dedicated to replacing or repairing what the warranty would cover. It is also possible to put additional funds into a person’s emergency fund. However, there is no guarantee that the money in savings will be enough to cover the needed replacement or repairs.

If someone is considering the purchase a home warranty, the first step is to determine if it covers everything. There are many limitations, which mean there are things the plans will not cover. This includes nonmechanical home components, like windows, the home structure, and similar items.

Also, keep in mind that, when a new home is purchased, the items provided will likely be fully covered under the warranties offered by the builder or manufacturer. It may be more beneficial to consider a home warranty if the appliances in the home are older and more likely to break or need to be replaced.

When someone decides that a home warranty is necessary, there are a few questions to ask before making this investment. Keep reading to learn what those questions are.

Is Any Protection Currently in Place?

As mentioned above, new home appliances may be covered. Even if the appliances are not new, they may still be covered by a warranty if they were bought using a credit card. This is because there are some credit cards that will extend the length of the warranty. A person should check with their credit card provider to see if this is the case. One example would be the American Express card, which adds as much as 24 months of additional coverage to the manufacture’s warranties of two to five years on items that are purchased with the card.

What is the Cost of the Warranty?

The answer to this question is dependent on the type of plan that is purchased and the provider selected. In most cases, it is possible to purchase one of three different types of home warranties: a plan for a specific appliance, a plan for all the appliances in the house, or a plan that covers the appliances, electrical system, and plumbing system.

Prices may also differ based on where someone lives. For example, a plan that covers most of the major appliances runs around $480 in central Ohio, but one that includes electrical and plumbing systems can cost up to $600. In New York, though, the cost is significantly higher, ranging from $900 to more than $1,000.

Along with the plan’s cost, there will be other expenses, too. If someone is dealing with a problem with a system or appliance in their home—even one that has been covered—they will have to make the needed copayment when the contractor comes to provide the requested services. The fees usually range from $60 up to $125, but all this depends on the work that must be done.

What Is the Total Cost of the Warranty?

The majority of complaints received by the BBB about home warranties are because the consumers don’t fully understand the coverage offered by the plans. The takeaway of this is that it is necessary to read all the conditions carefully. When examining home warranty plans, there are some that will cover refrigerators but not the icemaker in it. Other policies will cover the water heater components but not the tank of the unit.

In some cases, if there are certain circumstances present when an appliance breaks, it may not be fully covered. One example is if an oven may not be fully covered if it does not continue working while it is put in self-clean mode or if damage occurred because of a power surge.

The way appliances are maintained and cared for also matter. If someone did not have the required maintenance done or if an appliance was not installed correctly or by the professionals, the provider of the warranty may refuse to pay for the repairs even if the appliance is listed as being covered. There may also be a pre-existing condition, even in situations when it was not evident to someone when they purchased the home warranty. All this is going to give the provider a reason to deny the coverage for the item.

When it comes to home warranty companies, there are more than a few factors to consider. Keep the tips and information here in mind to know what to do and what to expect. Being informed is the best way to ensure the desired results are achieved and the warranty purchased will provide the coverage needed to protect the home and the items that are listed on the warranty as being covered. Not all providers are the same, so keep this in mind.

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