Choosing the Right Homeowner's Warranty for Your Needs

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Men and women often choose to purchase a warranty when they buy a big-ticket item. They want to know any repairs will be covered if something goes wrong with the item. From cars and appliances to electronic devices, it seems everything comes with a warranty now. However, many individuals fail to protect their largest asset in this way. They never stop to think about purchasing a warranty for their home.

A homeowners warranty covers items in need of repair or replacement throughout the residence. This includes electrical and plumbing systems, kitchen appliances, the HVAC system, and more. An individual needs to read the warranty carefully to ensure they know what will be covered and what is excluded in the policy they are considering purchasing.

Why Purchase a Warranty?

A warranty saves the homeowner money. The owners know they won't be hit with an unexpected repair bill when they can least afford it. Furthermore, a home warranty is of great help when the time comes to sell the residence.

Potential buyers like knowing the home were covered, as it means repairs were likely completed in a timely manner because the warranty covered them. In addition, the buyer may find they can have the warranty transferred to their name as part of the purchase. They need to ask if this is a possibility before buying the home. Transferring the existing policy to the new owner ensures there is no break in the coverage. What does a homeowner need to consider when purchasing this type of policy?

What Is Covered?

Homeowners must compare policies carefully to learn what is covered in each plan. Policy documents should list all items covered in the home. Many warranties today will cover the cost of repairing or replacing various systems in the residence along with major household appliances. This includes the HVAC system, the refrigerator, and the washing machine. If an electrical or plumbing problem arises, the warranty will likely cover those repairs as well.

However, homeowners don't need coverage for every item in the home. For example, there is no need to have the coffeemaker in the kitchen included in the plan. The cost of replacing this item will usually be much less than the increase in the home warranty premium to have it covered. Homeowners need to focus on purchasing coverage for items that are nearing the end of their lifespan.

Focus on those items that would be costly to replace and ensure they are included in the warranty. The same holds for items the occupants of the home consider essential, even if other people wouldn't feel they are a necessity.

Look at the home warranty as a safety net. Men and women don't call their insurance company when they need an oil change or other maintenance performed on their car. The policy only benefits them when they are in an accident unless they choose to purchase additional coverage. The same reasoning should be applied to a home warranty. It isn't meant to cover basic maintenance, only major repairs or a replacement of the covered device or system.

What Does the Policy Exclude?

All warranties come with exclusions and limits. For example, the warranty won't cover any damage intentionally caused by the policyholder. A person cannot destroy their electronic device, for example, simply because they want a newer one with the latest features. The same holds with a home warranty.

In addition, warranties typically limit the amount of money the warranty company will pay for a repair or replacement. Any difference between the cost of the repair or replacement and the warranty's responsibility must be covered by the homeowner.

Homeowners must carefully read each policy to learn which one best meets their needs. If something is not understood, ask questions. Never sign with a warranty company until you know exactly what you will get. Doing so prevents any unpleasant surprises when something goes wrong in the home and the warranty company won't pay in full.

Contractors

Warranty companies work with contractors to provide the covered services. Consider this when choosing a company, as you want outstanding service and quality work. Although the policyholder works with the warranty company to schedule the service, often it is an independent contractor who actually performs the services. If something goes wrong, problems could arise in trying to get the matter resolved, as the homeowner must work through the warranty company to address the issue.

For this reason, always ask the company which licensed contractors they use, as this could change over the life of the warranty. If you aren't satisfied with the company's choices, continue searching for the right warranty company for your needs.

Reviews

Read reviews from current and former customers before making a decision as to which warranty company to work with and which policy to buy. Consider all reviews when doing so. Although a company may have one or two negative reviews, don't eliminate them from the list. Look at the overall picture when deciding, as no company can please everyone.

On the other hand, if a company has all glowing reviews that have nothing negative to say, question them. No company excels in every area, and these reviews might be biased or provided by people with a vested interest in seeing the company succeed. For this reason, every review needs to be read critically.

Eliminate two or three of the worst reviews along with two or three of the best ones. Doing so allows you to get a more accurate picture of what the company offers, its strengths and weaknesses, and whether it might be right for you.

A good home warranty company understands what its clients want and need. Consider the above recommendations when you go to choose a company, and always read the fine print of any contract before signing. The right choice when it comes to your warranty company will ensure you are ready for the unexpected and your wallet won't take a significant hit when repairs are needed in the home. Every homeowner is sure to appreciate that, as they know they are protecting their investment while using their money wisely.