How to Purchase a Home Warranty

A home warranty can help you cover the costs of repairing home appliances and maintaining plumbing, electrical, and heating systems. As a homeowner, you may consider a home warranty if you don’t want to have to worry about paying out of pocket for normal wear and tear on your home. Start by choosing a home warranty that fits your needs. Then, research home warranty companies to find one that suits your budget. Make sure you review the terms and conditions of the warranty before you buy it so you know exactly what you are paying for.

EditSteps

EditDetermining Your Home Warranty Needs

1. Get a home warranty that covers one specific appliance if it is expensive or old. Appliances like a refrigerator, a dishwasher, a stove, or a garbage disposal may be worth covering with a warranty. Home warranties can also cover appliances like a built-in microwave oven or a washer and dryer. The warranty will cover the costs of repairs, maintenance, and replacing a faulty appliance.^[1]
   
   • A home warranty for one appliance may be worthwhile if it is very old and you want to try to offset the cost of replacing it. Keep in mind it will need to pass an inspection by the home warranty company to be insured.
   • This type of home warranty is also the least expensive option, costing $100 USD or less a year.
2. Go for a home warranty that covers all of your home appliances. If you have several expensive appliances in your home, a home warranty that covers them all may be ideal. Most home warranties will allow you to bundle together all your appliances and pay one fee to cover them all.^[2]
   
   • Most home warranties that cover major appliances will cost around $200-$300 USD a year.
3. Get a home warranty that includes all appliances and systems for full coverage. Most home warranty companies require you to get your home appliances and home systems like plumbing, electrical, heat and cooling covered in one package. You can decide which systems you want to get covered under the warranty, depending on your needs.^[3]
   
   • This type of home warranty is the most expensive option, costing up to $800 USD a year.
4. Ask your real estate agent for advice on home warranties. Your real estate agent will likely know a lot about home warranties and can recommend the best one for your needs. They are a great resource as they know the value of your home and can suggest how much coverage you might need.^[4]
   
   • If you plan to sell your home in the future, your real estate agent can also tell you how much value a home warranty will add to the sale.

EditFinding the Right Company and Plan

1. Contact reputable home warranty companies. Search online for home warranty companies in your area. Look on their website for an outline of their pricing and what they cover in their home warranties. Read reviews of the company online to see what other consumers are saying about them. Note if they have a high consumer rating and offer detailed plans.^[5]
   
   • You can also call the home warranty companies directly to speak to them about their plans.
2. Find out how much the warranty covers in costs. Most home warranty companies will offer a maximum amount of money they are willing to pay for any repairs or replacement parts for 1 year. This can range from $1,000-$1,500 USD for one appliance, depending on the provider and plan you get. They may also provide a maximum of around $7,500 USD for all appliances or systems covered under your plan.^[6]
   
   • Go for a plan that covers more than you need or just enough. The plan should provide you with enough coverage so you do not end up paying out of pocket for repairs or replacement parts.
3. Look for warranties that have a “repair or replace” policy. This policy means that if the appliance or system cannot be repaired, it must be replaced under the warranty. A “repair or replace” policy may be a good option if you have a lot of appliances that are old or that need a lot of repairs.^[7]
   
   • Avoid warranties that have an “obsolete parts” clause, which means the warranty company does not have to repair an appliance or system if the parts are too hard to find.
4. Factor in the cost of deductibles. Most home warranty companies will charge a fee for any service calls or maintenance bookings you do through them. The deductibles can range from $50-$100 USD for each visit or service call. Consider this added cost when you review home warranties so you know what you will be charged per repair visit.^[8]
   
   • You may opt for a plan with lower deductibles to save money. However, a lower deductible may mean the premium, or overall annual cost of the warranty is higher.
5. Read the terms and conditions carefully. Make sure you know exactly what is being covered in your warranty. Go through each term and condition. Some warranties will cover only certain parts of an appliance, such as everything but the ice machine in your refrigerator or your hot water tank but not the water tank itself. You should be aware of what is and isn’t covered in your warranty before you agree to it.^[9]
   
   • Some warranties also have conditions where an appliance is not covered due to a power outage or if it stops working on a particular setting.
   • You may also be required to perform regular maintenance on your appliances and systems, and have proof of this, in order to cover them under your warranty.
   • Under the conditions of most warranties, you do not have a say on which repair company comes to your home for the service visit. But you will not need to arrange service visits yourself, as the warranty company will usually do it for you.

EditGetting the Home Warranty

1. Find out if you need a home inspection to get the warranty. Some home warranty companies will require a detailed inspection of your appliances and your home systems before you can qualify for the warranty. They may assess the current state of your appliances and systems, and decide if they are willing to cover it. Some companies will not offer a warranty for items that are very old or in poor repair.^[10]
   
2. Compare quotes from several companies. Most home warranty companies allow you to get a free quote online once you provide your contact information and your property address. Compare quotes from several different companies to find one that covers what you need and fits your budget.^[11]
   
   • Some home warranty companies may allow you to negotiate the price for a plan or your deductible rates if you bring competitive quotes from other companies.
3. Pay a lump sum or do monthly payments for the warranty. Depending on the cost of the warranty, you may opt to pay the entire amount once a year so you are covered for 12 months. Or you may pay a small amount every month for the warranty as part of your home expenses.^[12]
   
   • After 12 months, you can renew your warranty or renegotiate it. You can also switch to a different home warranty company that better suits your needs and budget.

EditTips

• If you decide to sell your home down the line, include the home warranty in the sale to increase your home’s value. You will also be covered by your warranty the entire time your home is listed on the market, beyond the usual 12-month cap.^[13]

EditSources and Citations

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