What is Home Warranty? Are Home Warranties Worth the money?

Homeownership is an amazing experience, at least until you get hit with your first major repair or replacement bill. Maybe your HVAC system is not working properly. Perhaps your oven gave up the ghost. Whatever the case, as the homeowner, you’re on the hook for the costs. Not only that, but you need to find someone to do the work for you!

​A home warranty could save you time, money, and hassle, but it can be challenging to choose the best plan for your needs, and not all warranty companies are worth working with. In this guide, we’ll explore the reasons you need to read up-to-date 2019 reviews on home warranty companies, as well as discussing the basics, such as how these plans should work, why they can be problematic, and how to research the market to find the best home warranty.

What Are Home Warranties?

We’ll start with the basics – what’s a home warranty? Is it the same as insurance? No, these are different from homeowner’s insurance. A home warranty, according to The Balance, is basically a home protection plan that you’ll need to re-up every year. In essence, it’s a contract between you, the homeowner, and the warranty provider. You pay an annual fee each year in exchange for coverage of specific items, such as repair or replacement of appliances and systems within your home.

​The best home warranties will spell out exactly what is covered under your service contract, such as air conditioning repair, heater repair, oven replacement, pool coverage, and the like. You will also have clear information pertaining to things such as the following:

• When you can request a service call.
• Timeframe for filing a claim.
• Cancellation fees.
• Additional (optional) coverage areas.
• Access to qualified, pre-vetted contractors.

How Does the Best Home Warranty Contract Work?

You’ll find a lot of similarities between home warranty coverage and homeowners’ insurance. Despite that, they are not the same thing. Let’s run through what you need to know about how a home warranty contract works.

• You buy coverage from a provider, hopefully after reading home warranty reviews and editorials, and then comparison shopping to make an informed decision.

• When a covered item (appliances or systems) breaks down, you file a claim. Usually, you have a specific window during which you can submit a claim. After that window, you cannot file the claim.

• Most companies allow you to file a claim by phone or online 24-hours per day, but this is not the case for all companies.

• The company will determine which contractor to send to your home.

• You will be contacted by the company and informed of the date of the repair, as well as the window of time during which the contractor should arrive at your home.

• The contractor will arrive at your home, assess the problem, and make whatever repairs or replacements are necessary to rectify the situation. Note that the specific action taken will depend on the wording of your contract. For instance, if your contract states repair but not replace, and the appliance or system cannot be repaired, the contractor will not be allowed to replace it.

• You’ll pay a service fee to the contractor, usually equal to your deductible.

However, there are a few additional things you will need to know about your coverage. These include:

• You will pay a premium, which will vary based on covered items, optional coverage, amount of your deductible, limits, and more.

• Most home warranties have dollar limits that apply and cannot be exceeded.

• Most home warranties have a delay between the time you purchase coverage and when that coverage goes into effect. In most cases, this is 30 days, but it can vary from company to company.

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How Home Warranties Can Be Problematic

On the surface, these service contracts are simple and easy to understand. The best home warranties actually can be highly beneficial. However, finding the right coverage can be incredibly problematic due to a number of reasons, including:

• Tricky Contracts – Some contracts are extremely complex and are difficult to understand. Underhanded warranty companies often hide exclusions with the legalese that can come back to bite homeowners.

• Lack of Service – Some home warranty companies have bad reputations because they fail to stand behind their terms and do not take care of items that are their responsibility.

• Unfamiliarity – Many homeowners are simply unfamiliar with home warranties, the coverage items that should be available, how these companies work, and what actually goes into making the best home warranty.

The Solution to the Challenge

While it can be difficult to find the best protection plan for your home, there are ways to help ensure that you’re able to make an informed, positive decision:

• Editorial Reviews: When it comes to finding the right protection for your home, home warranty reviews from editorial sources can provide you with a lot of insight and help you make an apples-to-apples comparison between different warranty companies.

• Consumer Reviews: Reading reviews from other consumers about their experience with various home warranty companies can help you learn what to expect from the company if you bought protection through them.

• A Caveat – It can be easy to let a few negative reviews sway you away from a company, but take these with a grain of salt. The same should be said for all positive reviews. In fact, there are quite a few home warranty companies with mostly positive reviews from happy customers.

Which home warranty is the best?

Ultimately, finding the best home warranty for your needs should involve accessing accurate editorial information about what each warranty company brings to the table, including information about cancellation periods, emergency service, contractor network size, value for the money, and other essential considerations. Combine this with the general consumer sentiment you discover through reading consumer home warranty reviews.

Yes, it can take time to compare your options and arrive at an informed decision. However, by leveraging accurate information and taking the opportunity to compare service contracts, inclusions, exclusions, optional items, and more, you can avoid the pitfalls along the path and get the protection that you need for peace of mind.