When choosing a home warranty, you need to exercise the same care as you do when choosing your home if you want to save money and have peace of mind. It is important to understand what is covered and what to expect from the home warranty company. Here are five questions to ask when looking for the best home warranty coverage. 

What does the home warranty cover? 

Home warranties are not the same as home insurance. Homeowners insurance protects the structure of the home and its contents, whereas a home warranty covers appliances and systems. Home warranties are particularly helpful to first-time homeowners who may not have experience in handling home maintenance and repairs. 

Your first step should be to find out exactly what a home warranty covers. You generally want coverage on items that are well-maintained but getting older, those that are expensive to repair or replace, such as HVAC systems, and others that are necessary to live comfortably in your home. 

If you want to know more about your home warranty options, House Method provides unbiased reviews of some of the best home warranty companies on its website. 

What are the limits and exclusions?

It is important to read the terms and conditions of the warranty. For example, cover for systems and appliances under a home warranty may require a regular maintenance schedule. If you fail to perform routine maintenance, the home warranty company could argue that it is not responsible for the repair. 

Limits are the specific amounts of money a company will pay to repair or replace an appliance or system. Some companies set limits on specific items. For example, a company may set a limit on repairs to a swimming pool but not to repairs on air conditioning or heating systems. 

Other companies place an overall limit on all repairs and replacements. After this amount is reached, the homeowner must be for any further costs out-of-pocket. 

What is the price of a home warranty?

Prices of home warranties will vary depending upon the provider you choose, the type of plan you buy, and even the state where you live so you need to plan your budget accordingly.

Most home warranty companies set a monthly or yearly premium and these can range fairly widely from about $250 to $600 and even up to $800 in some cases. Companies also charge fees for service calls and these can vary from about $50 to $120. 

Warrantees with lower monthly or yearly premiums may offer less coverage, more limits and higher call fees so it is important to assess overall costs before making a decision. 

Who are the company’s contractors?

Home warranty companies partner with local contractors in the regions they serve. When a homeowner calls in with a problem, the local contractors are notified by the company and they respond to the call. 

You need to choose a company that uses contractors that are licensed and bonded in the state they serve. The company should vet the contractors and have ways of no longer providing them with work if it is not up to standard. 

What ratings and reviews does the home warranty company have online?

Make sure you look at the company ratings on relevant websites and how many positive or negative reviews there are. Do not just dismiss a company because of some negative reviews. 

If a company reaches out to a customer who has written a negative review and tries its best to fix the issue, this is a sign of good customer service. However, if it has many negative reviews and makes no effort to respond to them, it is better to steer clear.