How to Shop for a Home Warranty Plan

It seemed so easy in the beginning. Initially, your new home was the stuff of dreams. From summer evenings on your front porch to fabulous dinner parties, your first year as an owner was terrific.

And then, winter arrived. Now, that charming character home has morphed into a living nightmare. Barely a month goes by without something breaking. February isn’t even over, and you’ve already spent over $5,000.

The dishwasher ate it. Then, an ice dam in the roof triggered a leak. And worst of all, the furnace died. You’ve burned through your savings, and now, you have a growing credit card balance. Homeownership was supposed to make you rich – so much for that idea!

When you’re a renter, maintenance and repair bills are a foreign concept. When something goes wrong, the landlord takes care of it. But, when you become an owner, you become the landlord.

Here’s the reality – home repair is bloody expensive. As it stands today, fewer owners can afford to deal with these costs adequately. There is a better way, though – more and more, Americans are discovering home warranties.

These plans allow owners to pool their risk. In doing so, they can avoid being surprised by huge, unpredictable repair/replacement bills.

That only leaves one question: Which home warranty firm should I choose? In today’s article, we’ll show you how to separate the wheat from the chaff. 

Wait – What Are Home Warranties?

If you’re new to homeownership, you’re probably unfamiliar with the concept of home warranties. In short, a home warranty is a plan that covers the cost of emergency repairs/replacements.

Like homeowner’s insurance, you’ll pay monthly premiums to a home warranty provider. Whenever a covered appliance or system breaks, you call your firm. If they approve your claim, they’ll send a repairperson to your house.

At that point, you’ll pay a nominal charge called a service fee. Similar to an auto insurance deductible, it discourages small claims, but keeps more significant claims, like a busted furnace, viable.

Costs for home warranty plans vary by provider. However, you can expect to spend an average of $600 per year, and $75 (service fee) per call.

Find Firms That You Can Trust

Home warranties sound like a cool concept. Sadly, the under-regulated nature of the industry means that it’s home to than its share of shady outfits. Don’t believe us? Start googling home warranty firms in your state. Chances are, more than a few have a long trail of horror stories associated with them.

You often don’t hear from those who receive satisfactory service. But, you’ll hear plenty from those whose home warranty firms failed to meet their expectations. Despite extensive bad reviews online, there are home warranty firms that are legit. Start with search terms like “[company name] Trustpilot” or “[company name] scam”. Then, skim through the reviews.

Many bad reviews follow a familiar formula – often, you’ll hear complaints about firms not covering x appliance/system. However, had these reviewers read the fine print before signing, they would have already known that. Or, they’ll complain about their plan’s cost. Often, these folks fail to realize that in some years, major repairs aren’t needed.

However, some reviews should raise a giant red flag. If you repeatedly hear about “preexisting conditions” being used to deny claims, excessive wait times for service/reimbursement, or incompetent contractors, steer clear.

Profile Your Needs

Now that you’ve found some legit firms, figure out what coverage you need. For instance, if you can handle appliance repair jobs, but not furnace repairs, opt for a systems plan.

If you can handle no more than a $50/month commitment, make a note of that. Do you have more significant resources, and don’t want anything to do with repairs? Check out a firm’s comprehensive, or “platinum” plans.

Once you have accounted for these factors, use ReviewHomeWarranties filterable tool. By doing so, you’ll eliminate options that don’t fit your situation, thereby making the selection process smoother. 

Analyze The Home Warranty Providers On Your Shortlist

By now, you should have highlighted some promising plans. Before you start contacting firms, however, be sure to put them through their paces.

Are you still on ReviewHomeWarranties.com? For each firm you are considering, read their in-depth review. At the top, you’ll learn about what they cover. You might be surprised at the random things that each provider covers – and what they don’t.

As you hover over different appliances and systems, keep your eyes open for coverage caps. These limits, which often apply to budget plans, could leave you on the hook for part of a claim.

Scroll further down, and you’ll learn more about your chosen firm. There are sections on trustworthiness, how much they charge for plans, and what’s in their fine print. By the end, you’ll get a better sense of whether they are right for you. 

Protect Yourself Against The Hidden Costs Of Homeownership

Homeownership can be rewarding, but it’s no walk in the park either. As a homeowner, you can no longer defer responsibility to your landlord – you’re the one who is in control.

While home repair costs can be crippling, there are ways to cope. For some, a home warranty can help better manage these expenses. If you’re looking for a plan, we hope this article aids you in your search.