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What Homeowners Need to Know About Home Warranties?

Umar Tazeer by Umar Tazeer
October 29, 2022
in Lifestyle
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What Homeowners Need to Know About Home Warranties?
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Home warranties, also known as home warranty plans, are service contracts that protect homeowners against the cost of repairing or replacing covered appliances or systems. There are different levels of coverage available, from home appliance warranties to plans that cover everything from appliances to HVAC and electrical systems. 

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What Home Warranties Are Not

Because there are a lot of misconceptions surrounding home warranty plans, it’s worth clarifying one important thing before moving forward. Home warranties are not the same thing as insurance plans. Homeowners’ insurance only covers damage from certain natural disasters, vandalism, and other specific events, while home warranties cover breakdowns that occur due to ordinary wear and tear. These two very different types of protection work wonderfully together, though, so there’s certainly no need to choose one over the other.

Home Warranty Coverage Options

The next important thing to know about home warranties is that they offer varying levels of coverage depending on the plan and its pricing. The most common type of plan protects kitchen appliances. It does not cover other appliances in the home or any of its systems. That requires upgrading to a home systems warranty package. In almost all cases, the coverage term lasts for one year at a time, at which point homeowners need to reapply.

How the Warranty Works

As long as homeowners choose a good warranty company, the process for requesting service on covered appliances or systems should be simple. Instead of having to search around for contractors and companies in the area, vet each of them carefully, schedule an appointment with one, and cover 100% of the cost, homeowners just contact their warranty plan provider. 

The warranty company takes care of hiring a contractor and sending the person out to diagnose the problem and then report back. The company determines the best way to fulfill its obligation under the homeowner’s service agreement and pays for repairs or a replacement depending on the circumstances. It’s that simple.

A Note About Service Fees

Just like there is often some confusion about the difference between home warranties and homeowners’ insurance, service fees sometimes give homeowners pause. These fees are paid directly out of pocket to contractors during the initial inspection, which may seem counterintuitive since the rest of the balance will be covered by the home warranty company. It can help to think of the service fee as being like the warranty version of a deductible.

Start the Search for the Right Warranty Company Early

There are many different home warranty plan providers out there, but they’re not all created equal. Some offer better rates than others or a larger variety of coverage options, and there are even disreputable home warranty companies that try to stick customers with hidden fees. It’s important to do some homework before choosing which provider to trust and to read through contracts carefully to make sure the fees, contract terms, and other particulars make sense. Start reaching out to respectable companies for information about plans and pricing as soon as possible.

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