Wait, Am I Covered?
If one of the major appliances in your home went out tomorrow, what would you do? Would you be able to find someone to repair it quickly and spare you the inconvenience of going without? How would you be impacted by the financial burden of an expensive repair or replacement?
As a homeowner, you never know when something is going to break, so it is important to be prepared at all times. The challenging part is figuring out the most effective methods to make sure all your bases are covered when it comes to adequately protecting your home and possessions.
A home warranty is just one of several ways to make sure you have a plan in case something goes wrong in your home, but before you start shelling out your hard-earned cash, you need to understand exactly what you are paying for and how much it should cost.
What Is a Home Warranty? (And Why Do I Need One?)
A home warranty is a service contract purchased by homeowners as a form of protection against the breakdown of their home’s systems and appliances due to standard wear and tear. This differs from homeowners insurance, which only pays for damages and loss that result from natural disasters and other calamities like flooding, fires, and theft. When buying a house, it is common for a home warranty to be included in the contract, but they can be renewed after the initial year if a homeowner feels that continued coverage is a good investment.
People often think they only need one, either insurance or a warranty, but this is actually not the case. A home warranty and a homeowners insurance policy are two very different types of coverage that work best in conjunction with one another to more fully protect the property and possessions of homeowners.
Say you only had a home warranty and not an insurance policy, and then your house was broken into. Anything that was stolen would not be covered under the home warranty, and you would have no way to recover your losses. However, if you only have home insurance and your dishwasher breaks a few months after you move into a new house, your insurance company will not do anything to help you have it repaired or replaced.
Aside from the difference in coverage, the benefits of a home warranty as a homeowner are primarily in cost and efficiency.
For example, if you do not have a home warranty and your heater breaks in the middle of the winter, you could be faced with several weeks of waiting for a technician to make a service call and higher prices due to higher demand for their services. Not to mention, if your unit cannot easily be fixed, you could be left with exorbitant repair or replacement fees on top of the already overpriced service charge.
With a home warranty, you skip hunting down a reliable, available repairman and go straight to your home warranty company. You file a claim with them, and they take care of the rest. They will have a technician sent out and will cover some, if not all, of the cost, depending on your specific contract.
What Does a Home Warranty Cover?
Every home warranty plan is different, but there are a few basics most include. A standard home warranty generally covers the major home systems like heating, cooling, plumbing, and electrical, as well as significant appliances, such as the hot water heater, garage door opener, washer, dryer, and most kitchen appliances.
There are also usually options to upgrade your home warranty to include the coverage of pools, spas, septic systems, and other home features, and many providers now offer customizable plans so that homeowners can pick and choose only the items they feel the need to have covered.
In order to determine what you want your home warranty to cover, consider the age and state of your home and its amenities. Aside from the basic systems and appliances, what other items would be worth the extra cost to invest in protecting?
The ideal plan is not going to be the same for everyone, so be sure to find a plan that is tailored to best suit your needs and not just settle on a company’s standard coverage.
The Big Question: How Much Does a Home Warranty Cost?
The cost of a home warranty varies drastically depending on the degree of coverage. HomeAdvisor reports the average cost for a year of coverage under a home warranty plan as about $940, with most contracts ranging somewhere between $230 and $1,660. It is important to remember, however, that a high price does not always reflect quality coverage, so you should carefully read through your contract to make sure you fully understand the terms to which you are agreeing.
The key to finding the best deal is to carefully evaluate the premiums and deductibles, or what the company covers in conjunction to the cost of the plan and how much they are willing to pay in the event of a claim. Unsuspecting homeowners might be shocked to find out that their home warranty company is only willing to pay $250 of a $2000 repair because they failed to read the fine print of their contract.
Some plans require that a predetermined service charge be paid for any service call regardless of the type of service being provided, while others may require homeowners to pay a certain percentage of the cost or only pay if the price exceeds a specified amount. These things have a significant impact on the true cost of your coverage and can help you determine if a plan is truly worth the investment.
What Are the Best Home Warranty Companies?
Once you decide you want the security offered by a home warranty, your next step is to find the best suited policy with the right provider. While there are hundreds of national, regional, and local companies, American Home Shield, The Home Service Club, America's First Choice Home Club, and First American Home Warranty were identified by Reviews.com as the four best home warranty companies nationwide for flexible coverage and customer service, comprehensive coverage, repair guarantee, and low premiums, respectively. Choice Home Warranty, Cross Country Home Service, Home Warranty of America, and UtiliPro also received honorable mention.
Some other well-known companies include:
- Select Home Warranty
- HSA Home Warranty
- America’s Preferred Home Warranty
- Home Warranty of America
- Landmark Home Warranty
- 365 Home Warranty
- 2-10 Home Buyers Warranty
- Secure Home Warranty
- American Residential Warranty
- American Home Guard
- Total Home Protection
- TotalProtect Home Warranty
- HMS Home Warranty
- OneGuard Home Warranties
Choosing a home warranty company can be tricky business because there are many factors that need to be considered aside from just price. And always remember that just because you are paying more does not mean you are receiving better coverage.
Companies like American Home Shield require that customers pay a predetermined Trade Service Call Fee any time they require a service call, but the amount is usually less than or comparable to what the service provider would charge and the repair itself is completely covered by AHS.
However, some companies require a similar fee but will also only cover the repair or replacement up to a certain amount. If you are paying an annual fee, a service call fee, and still having to pay for the work required on your home, you may need to carefully consider if your current warranty is actually saving you any money.
Another thing to look into is the list of contractors used by the warranty company. One potential downside to working with a home warranty company is that you are typically required to use only the service providers of your company’s choosing. Unfortunately, Consumer Affairs often receives complaints about home warranty companies sending out technicians from businesses that are unprofessional and provide poor service. Before selecting your home warranty company, ask for information about who their service providers are.
Reading reviews is likely your most reliable resource when gauging what kind of service you can expect to receive from a company. If the vast majority of home warranty customers were pleased with the cost, quality, and efficiency of the service that was provided for them, it’s likely that you will have a comparable experience. If a company is constantly knocked for the same things review after review, chances are that you could end up running into the same problems. Of course, no company is perfect, so there are always going to be a few bad reviews in the bunch, but you should still be able to detect a general trend.
Ultimately it comes down to finding what will most benefit you, meet your needs, and match your budget, which is going to be different for every homeowner. Don’t be afraid to ask questions and always be sure to compare several options before making your selection. The last thing you want to do is to pay for a plan that is not providing you with the coverage and protection you need.
Why Do Home Warranty Companies Choose One Point Service Group?
When locks need to be rekeyed or a garage door opener needs to be replaced, home warranty companies often turn to One Point Service Group to meet their needs. Mr. Rekey and Mr. Garage Door are two of our premium brands, offering expert service that is both affordable and efficient.
Top home warranty companies like American Home Shield have long recognized the excellent service provided by our brands. We provide quality service to every customer and always make sure the job gets done right. Whether your home needs to be rekeyed for security purposes just after moving in or your garage door opener goes out unexpectedly, we can send a technician out to ensure you are taken care of quickly.
Home warranties can provide homeowners with peace of mind in knowing they have someone to call on when something goes wrong in their home, but that does not mean they are the right choice for everyone. While One Point Service Group loves to work with home warranty companies to make sure their clients receive only the highest quality service, we don’t stop there.
If you need locksmith or garage door service and do not have a home warranty, please do not hesitate to give us a call at (888) 677-3539. We will work with you to ensure you receive the same quick and affordable service we strive to provide every customer. Home warranty or not, we’ve got you covered.