Homeowner insurance not always protect you from all life unexpected situations that can happen, that`s why it’s good to have additional help like a home warranty. Common mistakes or misunderstatement about two of these things are that home warranties are not insurance, and no force under the law provides and compensate anything to you. Need to keep in mind that every home warranty can be totally different, even the same company in two different states. We strongly recommend read your contract with the home warranty company, state law, and federal law.
Home insurance doesn’t always protect you from unexpected situations. Thus it is a good idea to have additional coverage through a home warranty plan. These plans pay for the repair of appliances and/or systems in your home like the air conditioning or plumbing systems that break during the policies term. These can extend homeowner insurance, but as they have coverage limits and don’t cover the house itself, do not replace it.
How it works
Homeowners can choose the coverage term, usually a year, and pay in advance. If something covered breaks or requires repair during that time, the homeowner simply contacts the company and they will send a local technician to check and if the system or appliance is covered, repair or replace it. The homeowner then simply pays the service fee to the warranty company or the technician.
It is also worth noting that contracts usually take between 15 to 30 days to come into effect — don’t think that you can just purchase one as soon as something breaks.
What is covered
The most common confusion is what exactly is covered by the plan. The only way to be sure is to read the contract which quite likely will vary from state to state. Usually, you will have a choice of having appliances covered; having systems like the heating, air conditioning, and plumbing systems covered; or a combination of both. Of course, the more that is covered, the higher the more the plan will cost.
You may think that this sounds just like the monster’s warranty, and thus not really beneficial. Manufacturer’s warranties generally only last one or two years from the date of purchase by the original buyer. Home warranty plans cover appliances and systems no matter their age and without any home inspections needed. So they are particularly useful if you have used or older appliances.
The price of home warranties can vary a lot, being anywhere from $200 to $800 a year. We have listed some of the best companies in the industry so that you can choose the best one for you. Keep in mind that you will have to pay extra to have appliances added to your policy — this can vary from $100 to $900 depending on what you want to add and how many.
Prices, contracts, and what companies are available to you varies from state to state. We highly recommend reading the contract, knowing your state’s laws, and checking reviews to know what to expect. Keep in mind that home warranty companies will decline to cover appliances or systems that were improperly installed or lacked required maintenance. Make sure your appliances and systems have been properly installed and necessary maintenance is performed regularly before purchasing a home warranty plan.