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There are many advantages of owning a home of your own, ranging from privacy in a space you can call your own to the freedom to do almost anything that you want. However, there are also nuances. There will be times when a vital device will break down in the house and this is where a home warranty can come into play; always have someone that can fix anything in your house in the blink of an eye.
This is what home warranty plans offer you as a homeowner, it is an umbrella warranty covering all the appliances in your home. Instead of going through the hassle of repairs on your own or working with random repairers, all you have to do with a home warranty plan is to put a call through to your warranty company, and your appliances are usually fixed or repaired within the day.
It’s no doubt that homeownership is beneficial, but it can also be stressful. Have a plan to help you ease out that stress and cover for the otherwise exorbitant cost of repair in the absence of a plan.
What are Home Warranties?
Home warranties are comparable to insurance policies or service contracts that cover the products and structural components of a residential building. One condition of a home warranty is that covered appliances and systems must be regularly maintained. This type of coverage is different from home insurance, which pays for damage and losses caused by natural disasters.
Home warranties cover equipment packages such as kitchen appliances, additional equipment like water heaters, HVAC units, sewers and gas pipes, plumbing and electrical systems, swimming pools, spas and more. Other forms of home warranty take care of home systems such as:
- Fire alarm
- Cooling fan
- Air conditioning and heating channels
- Doorbells
- Septic tanks
- Centralized vacuum cleaner
- Garage door opener
- Integrated food centers
- Pump well
- Water softeners
Home Warranties are usually directly sold by home warranty managers or indirectly by real estate agents, builders, or mortgage firms when a home is sold. Home warranty protection is also often sold by utility companies and through affinity groups such as AARP or AAA.
Domestic warranties allow you to repair mechanical defects in the product covered by the manufacturer’s or builder’s warranties. They usually include deductibles and limit repairs, where repair costs are essentially determined based on the product, period, and length of the contract.
By estimate, home warranty revenues are expected to grow 50% annually from $ 2.3 billion in current valuations. But it should be noted that it still suffers from a bad reputation based on widespread damage prevention practices caused by high negative selection by the major players in the sector.
What Are Home Warranty Deductibles
Since home warranty plans are all different, ask specifically what kind of deductibles your plan includes. Contact your broker to see if any upgrades are available. Make sure to make all the checks require before signing a home warranty contract.
Home warranty companies often list three types of coverage: basic coverage, full coverage, and optional coverage. Some carriers may not have basic insurance, but they do have a standard policy.
Below is more information you should know on these three types of coverages.
Basic Home Warranty Coverage
A basic home warranty covers systems and devices that are essential for everyday use. Items covered by a home warranty vary from state to state. The daily use of devices depends on climatic conditions and other factors—for example, built-in microwaves, plumbing, ceiling fans, etc.
You should note that not all companies include the same list of items in their default policies.
Enhanced Home Warranty Coverage
Extended coverage includes some systems and devices that are not included in a basic plan, but are used frequently. Enhanced coverage costs a little more than basic coverage. Under certain warranty conditions for private households, air conditioning, refrigerator, washer/dryer, etc. Basic insurance does not include them.
Optional Home Warranty Coverage
Optional coverage includes items that are not covered by basic or full coverage. This cover gives you the ability to add your own pool, spa, wine cooler, well pump, etc. You have to pay a fixed additional premium to add one of these items to your home coverage.
Most home warranty company websites have sample policies. Indicate which items are included in basic, full, and optional coverage. Be sure to read the document for a clear understanding of the elements included in each policy and speak to a representative of the company.
Deductible Costs, Service costs, and Other Fees
When evaluating a home warranty deductibles, make sure you know exactly the costs involved. This means you have to take into consideration, among other things, acquisition costs, service costs, and additional costs.
The actual price of a home warranty deductibles depends on the chosen coverage. Typical annual costs can be $200 for large appliances and $800 for HVAC, plumbing, and electrical systems.
When buying a home, the warranty premium is a part of the final costs of the house. However, the question of who to pay the premium remains open. Payment responsibilities can be transferred entirely to the seller or shared between the seller, the buyer, and the broker.
Some home warranties have a deductible of around $60-70; or the repair cost, whichever is lower. If the warranty includes a deductible, this fee will be charged for every repair. And even if you don’t pay the actual repair or replacement costs, you may be liable to pay from between $65 and up to $125 in trade fees for each repair. This fee, stipulated in the contract, covers the price of the technician who comes to your home to diagnose the problem.
Deductibles in Different Companies
Company | Amount |
Choice Home Warranty deductible | $60 |
Select Home Warranty deductible | $60 |
American Home Shield warranty deductible | $75 – $125 |
Fidelity home warranty deductible | $75 |
HSA Home Warranty deductible | $75 – $100 |
Home Warranty of America deductible | $75 – $100 |
HMS Home Warranty deductible | $100 |
Total Protect Home Warranty deductible | $75 – $125 |
First American Home Warranty deductible | $75 |
Sears Home Warranty deductible | $75 |
Old Republic Home Protection deductible | $65 |
Restrictions: What Home Warranties Do Not Cover
A home warranty plan usually covers essential appliances like stoves, water heaters, and refrigerators. It can also include household structures such as HVAC, plumbing, and electrical. It is important to read the fine print on any warranty document to differentiate the coverage and exclusions. Some warranties cover garage door openers as part of the basic package, while others may require further premiums.
While you can buy additional coverage for a home feature that isn’t available with basic coverage, it’s also likely that some warranty companies won’t cover specific areas of a home. For example, some companies cover outdoor pools or spas for an additional premium, while other companies may not list a pool as part of their offerings.
Service providers can also refuse payment under certain conditions. This could be the case when you consider that repairs are too expensive. If so, the seller may offer to replace the item or pay the amortized value.
The home warranty company can refuse payment for a variety of other reasons.
- Failure to carry out compulsory maintenance may result in rejection,
- If the device or system is not properly installed or if there is a code violation,
- If there is excessive wear or if there is a pre-existing condition.
How to Choose the Best Warranty for Your Home
There are three basic types of home guarantee plans that increase costs and coverage.
- The first concerns a specific device, e.g. a refrigerator.
- The second contains several appliances such as a refrigerator, washing machine, and dishwasher.
- The third concerns critical equipment and systems such as HVAC and electrical systems.
Even the most expensive home warranty plans may not cover all of your appliances or systems. The warranty may not cover a second refrigerator in the garage or equipment for an outdoor pool. If you want items that do not fit into the original policy, you will need to negotiate with the insurance company.
Those companies are clear and specific in what they do and don’t cover. Negotiation can pay off. Companies like Weber includes the pool-powered cellular chlorination system in their $ 670 warranty. Imagine if you’ve lived in a home for six years, and your cell has gone out around three times – that would have cost you $1,000 each time to replace. But if you have the right warranty package, you would have actually save a lot of money.
Conclusion
There you have it – virtually all you need to know about home warranty in order for you to make informed decisions on your next home warranty deal. It should be noted that you should look for updates online, stay updated, and harm yourself with the right information at the right time.
It is evident that home warranty offers solutions to the unforeseen problems that homeowners may face year-round. Make sure you have read the warranty agreement for your home before buying it.
As a home seller that would like to give home warranty to their buyers, make sure most equipment and systems in active use are covered. This gives them peace of mind that a home warranty covers for their repairs or replacements.
You also need to do extensive research to get a reputable home guarantee company. This pays off for actual repairs when they are required.
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Reviewed Home Warranty Companies:
- Total Home Protection
- Choice Home Warranty
- First Premier Home Warranty
- The Home Service Club
- American Home Sheild
- Cinch Home Warranty
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