Home warranties are a valuable tool for new homeowners to minimize risk and protect their budgets. But buyers need to do their homework to find a provider with clear contracts, transparent terms and conditions, and no hidden fees or exclusions.
Here are 7 essential questions to ask before purchasing a home warranty: 1. What is the waiting period?
What is the coverage?
What does homeowners warranty cover? Home warranties offer financial assistance when appliances and systems break down. They typically include bundles of home system or appliance plans and optional add-ons that allow homeowners to customize their coverage.
Many companies exclude certain items from their contracts, such as rust, mold and other environmental conditions. In addition, they generally deny claims for systems or appliances that broke down prior to the start of the contract.
Be sure to read a company’s service contract carefully to understand what is covered and the annual limits on coverage. It also lists what isn’t covered, actions that void the policy and other important information.
What is the waiting period?
Typically, insurance companies have waiting periods for policies to protect themselves against individuals who take out policies, then immediately make claims for pre-existing conditions. The duration of the waiting period varies by insurer.
Home warranties are a great option for homeowners that want to avoid paying out-of-pocket for repairs or replacement of appliances and systems in their home. They are also an attractive real estate incentive for buyers and can help sellers earn more money on their sale. There is usually a monthly or annual premium to pay for the home warranty. In addition, there are service fees for each time a technician visits the property to evaluate and carry out a repair.
What is the pricing?
Home warranties are a great tool for homeowners, and the cost of one varies by company, plan and state. There are typically two major costs associated with a home warranty: a yearly premium and a service fee per repair.
Some companies offer add-ons for appliances and systems that aren’t included in a standard policy, such as pools and spas, septic systems or roof repairs. It’s important for homeowners to compare plans and pricing to make sure they’re getting the best value for their money.
Real estate agents often recommend home warranties to their clients as an added security blanket during the buying and selling process. Whether your client has questions about premiums, service fees or payout caps, it’s worth it to have the
What is customer service like?
A home warranty provides financial protection in the event that appliances or systems break down when used as directed and after normal wear and tear. However, it is important to do your homework before signing up with a provider. It is recommended to compare company prices and coverage limits and read sample contracts carefully.
What is the company’s reputation?
Home warranty companies typically charge an annual fee to cover repair costs and service providers. Most also impose coverage caps or maximum payouts per item and year.
Many homeowners consider a home warranty to be worth the cost, especially for older appliances and systems that are more likely to break down. Some home sellers may even offer a year of coverage as part of the selling process to help entice buyers. However, homeowners should carefully read contracts to ensure they’re getting what they expect. There are many scams that give legitimate home warranty companies a bad name.
What is the company’s experience?
Your home is one of your greatest investments and a home warranty is a great way to protect it. But, it is important to make sure that you are choosing a company with a good track record. To do so, you should read reviews and ratings from reputable sources. Additionally, check with your state’s insurance or licensing department to make sure that the company is licensed to offer service contracts.
Avoid providers who use high-pressure sales tactics or have a reputation for denying claims. Also, beware of companies that tack on hidden fees or have coverage caps.
What is the company’s track record?
A home warranty company should have a good reputation among customers. This can be determined by reading online reviews and checking a company’s track record with local authorities, such as state attorneys general, for warnings or investigations related to unethical business practices.
Also, ask how the company selects contractors for repair and replacement work. Some companies have requirements that homeowners must meet to have their covered items repaired, such as performing regular upkeep. If you are not willing to follow these requirements, consider alternatives such as setting aside money for these expenses in a savings account or emergency fund.