How To Buy A Home Warranty: A Step-By-Step Guide

How To Buy A Home Warranty_ A Step-By-Step Guide

When buying a home, one of the best ways to protect your new investment is by purchasing a home warranty. A home warranty offers coverage for the repair or replacement of key systems and appliances in your home, saving you from unexpected costs when something breaks down. If you are new to homeownership or considering renewing your warranty, understanding the steps involved in purchasing a home warranty can help you make an informed decision.

Many homebuyers find themselves unprepared when appliances or systems break down unexpectedly. Without a warranty, the repair or replacement costs can quickly add up, straining your finances. A homebuyer warranty offers a safety net that can help protect your wallet from those surprise expenses. 

However, buying a home warranty is not always straightforward. There are several factors to consider when selecting the best plan for your home and needs.

What Is A Home Warranty?

A home warranty is a service contract that covers the cost of repairing or replacing major systems and appliances that break down due to normal wear and tear. These systems include HVAC systems, plumbing, electrical, and major household appliances like dishwashers, refrigerators, and ovens. A home warranty can cover a wide range of appliances and systems, allowing you to select the level of coverage that suits your needs.

A common misconception is that a home warranty is equivalent to homeowners' insurance. However, the two are very different. Homeowners' insurance protects your home and belongings from damage caused by events like fires, theft, or natural disasters. A home warranty, on the other hand, protects you from the cost of repairs or replacements caused by regular wear and tear on home appliances and systems.

Why Should You Buy A Home Warranty?

For many homebuyers, purchasing a home warranty can offer peace of mind. As a homeowner, unexpected repairs or replacements can be overwhelming, especially if they come with a hefty price tag. Home warranties make it easier to budget for those expenses. For new homeowners, a warranty offers protection against costly repairs, providing confidence that if something breaks, they will not have to pay out of pocket.

Even if your home is relatively new, the appliances and systems still experience wear and tear over time. For homeowners with older homes or older appliances, a home warranty is even more critical. With a warranty, you can reduce the risk of surprise repair bills, making it easier to manage your household budget.

Steps to Buy a Home Warranty

Here are the key steps to guide you through the process of selecting a home warranty that suits your needs and budget.

Determine Your Coverage Needs

Before purchasing a home warranty, the first step is to determine what needs to be covered. The coverage offered by home warranties can vary, and the plan you choose should fit your specific needs. Consider the age and condition of your home systems and appliances. For example, if you have older appliances, you may want a plan that covers items such as refrigerators, washers, and dryers. Alternatively, if your home systems are older, a plan that covers HVAC, plumbing, and electrical systems may be more suitable.

If you are unsure what to include in your coverage, a home inspector can help assess the condition of your home and identify areas that require protection. For those purchasing a new home, your home inspection report can serve as a valuable tool to determine what needs coverage.

Set Your Budget

Home warranty costs can range from $350 to $700 per year, with additional service fees incurred each time a repair or replacement is requested. These service fees typically range from $50 to $150. While a home warranty can save you money on repairs, it is vital to set a realistic budget for your plan.

If you're on a tight budget, consider exploring more affordable home warranty options. Some companies offer basic plans for under $50 per month. However, if you want more comprehensive coverage or additional appliances, you will need to account for higher monthly premiums.

Many providers also offer discounts or special deals for new homebuyers, so it is worth asking about any available promotions. Some providers will offer discounts for paying annually rather than monthly, so weigh the pros and cons before making your decision.

Research Home Warranty Providers

Once you have determined your coverage needs and set your budget, it is time to research home warranty providers. Not all home warranty companies are the same, and selecting the right provider is crucial for obtaining the best value. When researching, consider the following:

  • Reputation: Look for companies with a good reputation and customer reviews. Check sites like the Better Business Bureau (BBB), Yelp, or Google Reviews for feedback from other customers. The more positive reviews and higher ratings a company has, the more likely they are to provide good service.
  • Customer Service: A key factor in selecting a home warranty provider is the quality of customer service. A good provider should be responsive, professional, and available when you need them. Look for companies that offer 24/7 customer support and easy access to claims filing, either online or by phone.
  • Available Plans: Different companies offer different types of plans. Some providers offer basic plans that only cover home systems or appliances, while others offer comprehensive plans that cover both. Be sure to compare the available plans and their coverage to find the best fit for your needs.
  • Service Fees and Coverage Limits: Be aware of the service fees charged by each provider. Service fees are usually paid when a technician visits your home to assess and repair or replace a covered item. Additionally, verify the coverage limits for each item. Some warranties may cover the full cost of repairs or replacements, while others may have limits that require you to pay out of pocket for the difference.
  • Exclusions: Each home warranty has exclusions. Be sure to carefully read the terms and conditions to understand what is not covered by the warranty. Many warranties exclude coverage for damages caused by neglect or misuse, so it is essential to understand what is and is not covered under your plan.

Compare Quotes From Multiple Providers

Once you have narrowed down your list of potential home warranty providers, it's time to obtain quotes from each of them. Most home warranty companies offer free quotes, either online or by phone. When comparing quotes, be sure to consider the following:

  • Coverage Details: Compare the types of coverage each provider offers. Ensure you are getting the protection you need for your home's systems and appliances.
  • Price: While the cost of the plan is important, it should not be the only factor you consider. A lower-priced plan may have limited coverage or a high service fee, which could ultimately result in higher costs over time. Choose a plan that provides the best value for your money.
  • Terms and Conditions: Read through the contract and fine print carefully before making a decision. This will help you avoid any surprises or hidden fees in the future. Make sure you understand what is covered, what is excluded, and what the service fee will be for each repair request.

Review Sample Contracts

Before signing any agreement, ask for a sample contract from the provider. Most reputable home warranty companies will offer sample contracts on their websites. Reviewing these contracts will give you a clear understanding of what is included in your warranty, as well as any limitations or exclusions. Ensure the terms are clear, and be aware of any conditions that may affect your coverage.

Finalize Your Purchase

Once you have found the right home warranty provider and reviewed the terms, you are ready to finalize your purchase. Most companies allow you to buy a home warranty online or over the phone. You will need to provide information about your home, including its size, age, and the systems and appliances that need coverage.

After purchasing your warranty, you will typically have a waiting period before coverage begins. Be sure to ask about this waiting period, as it may range from 15 to 30 days. During this time, you will not be able to make claims for repairs or replacements.

How to Make the Most of Your Home Warranty

Now that you have successfully purchased a home warranty, it's essential to know how to maximize its benefits. A home warranty is an investment that can save you time, money, and stress when something goes wrong with your home’s systems or appliances. However, understanding how to use it effectively can maximize its value and help you avoid unnecessary frustrations.

Understanding the Claims Process

One of the key aspects of a home warranty is how claims are processed. When a covered appliance or system breaks down, you must follow the claims procedure to have it repaired or replaced. Each provider has a slightly different process, but it generally involves these steps:

  • Submit a claim: When an issue arises, contact your home warranty provider either through their website or customer service line to submit a claim. Be prepared to provide details about the problem, including the type of appliance or system, its make and model, and a description of the issue.
  • Service call: After submitting your claim, the warranty provider will send a technician from their approved network to inspect the problem. The technician will diagnose the issue and determine whether it is covered by the warranty.
  • Repair or replacement: If the issue is covered, the technician will either repair or replace the appliance or system. In many cases, your warranty provider will pay for the entire cost of the repair or replacement, but if the repair exceeds the coverage limit, you may be responsible for the difference.

Regular Maintenance and Its Role in Warranty Coverage

To get the most out of your home warranty, regular maintenance is key. While the warranty will cover breakdowns due to normal wear and tear, it won’t cover damages resulting from improper maintenance or neglect. Regular maintenance helps keep your appliances and systems in good working condition, and it can also extend the life of your equipment.

Ensure that you perform routine maintenance tasks, such as cleaning air conditioning filters, checking the refrigerator coils, and having the HVAC system serviced regularly. By following the manufacturer's maintenance guidelines and keeping detailed records, you can ensure that your warranty remains valid and that any claims you make are processed smoothly.

Know Your Coverage and Exclusions

It is important to understand what your home warranty covers and what it excludes. Most home warranties cover systems such as HVAC, plumbing, and electrical, as well as major appliances like refrigerators, ovens, and washing machines. However, there may be exclusions, such as damage caused by misuse, natural disasters, or pre-existing conditions.

For example, if you purchase a home warranty for a home with an older refrigerator, the warranty may cover a breakdown that occurs due to normal wear and tear, but it likely won’t cover the replacement of an appliance that is already in poor condition. Reading the terms of your contract carefully will help you avoid surprises if a claim is denied.

It’s also important to be aware of the coverage limits, which are the maximum amounts the warranty provider will pay for repairs or replacements. If a repair or replacement exceeds the coverage limit, you will be responsible for the additional cost.

How to Leverage Add-Ons

If your home has additional systems or appliances that are not covered by your standard warranty, you may want to consider adding extra coverage. Many home warranty providers offer add-ons for items like pools, spas, septic systems, or second refrigerators. While these add-ons come with an extra cost, they can be a worthwhile investment if your home has specialized systems that require protection.

Before purchasing add-on coverage, assess whether these items are likely to need repairs or replacements during the warranty period. For example, if you have a pool that is used frequently, adding pool coverage may give you peace of mind knowing that repair costs for the pool’s equipment will be covered.

Renewing Your Home Warranty

Most home warranties are valid for one year, but you can typically renew your coverage at the end of the contract period. Some providers offer discounted rates for renewals, while others may increase the price after the first year. 

If you are renewing a warranty, take the time to review your coverage and determine if any changes are necessary. For example, you might want to add coverage for a new appliance or system or upgrade your plan if your home’s needs have changed.

How Complete Protection™ Will Help

At Complete Protection™, we simplify the process of buying and using a home warranty. Our plans are designed to meet your unique needs, with clear terms, no hidden fees, and no deductible. With Complete Protection™, you can rest assured knowing that your home systems and appliances are covered from unexpected breakdowns.

If you have any questions about our home warranty services, please don't hesitate to contact us today. We’re here to make homeownership easier and more affordable for you.