Being a homeowner comes with a lot of responsibilities. You have to take care of your appliances like the air conditioner, refrigerator, dishwasher, or water heater. The regular repair and maintenance and eventually replacement of these appliances can be costly. That’s why purchasing a home warranty plan is a wise move. It’s a great option if you want to keep your repair costs down. When choosing a home warranty plan, it may seem easy to just pick the first available option. However, it's essential to understand what the company is offering and if it will be a worthy choice. The checklist below is meant to help you select the best home warranty plan that will give you peace of mind.
Determine What Coverage Your Home Needs
Before you start shopping around for a home warranty plan, you must determine the type of coverage your home needs. You’d be hard-pressed to find a home warranty plan that covers every part of your home’s system and appliances.
Before making your decision, ask yourself these questions:
Do I have expensive systems and appliances that are costly to repair or replace?
Are the systems or the appliance new?
Are they well maintained but nearing the end of their lifespans?
New systems and appliances come with a manufacturer’s warranty, which offers protection, but they are limited.
Furthermore, you need to determine if there are any preexisting problems with your appliances. A home warranty plan may have some limitations as to what’s covered or excluded. It will be more economical if you'd find a company that covers preexisting conditions, as well as other appliance and system damages.
Determine What Coverage a Home Warranty Company Offers
It all starts with thorough research into the company whose warranty plan you’re interested in. One of the most important factors to consider is understanding the coverage you need. The last thing you want is a misunderstanding when your home appliances get damaged.
The Better Business Bureau advises homeowners to carefully read the coverage details to avoid complaints later on. Never presume coverage that’s not stated in your agreement. Keep in mind that the issuer is only mandated to pay the expressed coverage - nothing more.
So, be sure to keenly read the Terms and Conditions page and take note of what exactly the plan says it covers. If there are parts you don’t understand, don't hesitate to ask for clarifications.
Of course, you must consider the affordability of the warranty plan. Warranty plans differ from one company to another. You need to compare the cost of the home warranty plan for various companies and decide which one best suits you.
Don’t just look at the initial cost of the plan. Calculate the cumulative cost over time, say 12 months, and make the comparisons. To do that, take the monthly premium cost and multiply by 12 to get the annual cost.
The figure should not be more than the cost of repairing or replacing your appliances over that period. In other words, the cost savings should be substantial enough to make the protection plan worth it.
Check Customer Reviews
It's important to know what other customers are saying about the home warranty compant that you're considering. Check the positive reviews, but pay more attention to the negative comments. This will give you an insight into the reliability of the company. Check if and how they handle customer complaints to get a picture of what to expect if you find yourself in the same predicament.
Carefully Read the Exclusions and Limitations
Does the company have an overall limit on how much they pay? Some companies only offer to cover repairs up to a certain amount. Once the limit is reached, all repairs and replacements are covered out of your budget. Others place limits on certain appliances and systems, meaning the rest comes out of your pocket.
Some companies offer a cash-in-lieu option, where they give you what they would have paid to repair or replace the system or appliance. It will be up to you to decide how to proceed from there. Therefore, it's important to note these limitations and exclusions to know what you're getting into.
Look for Companies Within Your Area
Not all warranty providers cover the entire country. Some may have offices in more areas than others, while some may be offering coverage only in selected areas. National players may have wide coverage, but local companies may offer the best options.
In case of emergencies, a company located within your locality may respond much faster than those from outside. Most importantly, purchase a warranty plan from a company that services your state.
Disaster strikes when you least expect it. With a home warranty plan, you can rest easy knowing that if a major appliance or system breaks, you're in good hands. Home warranty plans, in combination with regular home insurance coverage, can tremendously help lower the budget-crippling surprises.
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