APN News

  • Monday, January, 2022| Today's Market | Current Time: 09:00:57
  • Home warranty companies appear to be a dime a dozen today. Turn the TV on or listen to the radio for a few minutes and you’ll likely come across an ad for one of these products. Individuals who own a home or are in the process of buying one know how expensive homeownership can be. To them, the idea of a home warranty that covers the cost of a repair or replacement of appliances in the home or a major home system sounds wonderful.

    A person may be willing to hand over their hard-earned money to have this type of coverage. Before doing so, however, they need to know more about the warranty, the cost, and what it covers. What questions should be asked when comparing these products? The following serve as a few of the many things to consider when determining if a home warranty is right for your needs and what a person should know before buying. 

    Cost Per Claim

    Every plan charges a deductible for each service call. The deductible varies by the provider and the plan selected. Higher premiums generally mean lower deductibles, and a homeowner needs to take this into account when choosing which policy to buy. In many cases, the deductible is all the homeowner will be charged for a service visit and repair.

    Factor this deductible into the cost of the policy each year to decide whether the plan is worth the money you pay for the coverage. Shop around to see if you are getting the best deal and the highest level of coverage for an affordable price. Plans and prices vary drastically based on the provider, so if one plan doesn’t fit your needs, look around for others. 

    Inclusions and Exclusions

    Every homeowner must know what their home warranty covers and what systems, appliances, and household items are excluded. Many people are surprised to learn the average home warranty doesn’t cover their garage door or garage door opener, for example. The Better Business Bureau receives countless complaints each year about home warranty providers. However, many of these complaints stem from the homeowner not understanding their policy and its exclusions. 

    Problems of this type can be avoided by reading each policy documentation carefully. Review the terms and conditions and examine the fine print. For instance, some policies cover repairs to a refrigerator but not the ice maker built into the appliance. Certain policies cover water heaters but not the water tanks that make up a large part of this household appliance. Homeowners must know what they are covered for before requesting a service call. 

    Homeowners often express surprise when the home warranty provider denies their claim for oven repair because the appliance failed during the self-clean mode. A failure to perform routine maintenance could lead to denial of a warranty claim, and an improper installation of an appliance could void warranty coverage for that appliance. Pre-existing conditions are another situation where a home warranty provider can deny a claim. 

    Coverage Dates

    A homeowner must know when the coverage kicks in after they purchase the policy. Some plans take effect immediately, but other policies come with a waiting period, often 15 to 30 days from the date of purchase. A person doesn’t want to pay for a one-year warranty for their home only to find they have a costly repair arise the following week and the warranty they just purchased won’t cover the repair or replacement bill.

    Furthermore, homeowners must understand how to cancel the policy when it is no longer needed. For example, a family might find they must move to a new city or state for their job. How should they go about canceling the policy? Are they locked into a contract where they will need to continue paying until the policy term is up? Homeowners must also learn whether they will be charged an early termination fee if they sell the home before the policy term expires. Having this information ensures there are no surprises. 

    Policy Limits

    A home warranty may include a provision that states the provider will only pay a certain amount during a given time period. For instance, the provider may state they will pay a maximum of $3,000 in one calendar year. Anything above and beyond this amount must be paid by the homeowner. Other policies put a limit on how much they will spend on a particular system or appliance over its lifespan. The homeowner might find they end up paying for a warranty that covers very few items in their residence as a result of these restrictions or limitations. 

    Customer Service

    Homeowners don’t want to sit on hold when they have a problem with their household systems or appliances. Furthermore, they don’t want to have to navigate an automated menu to receive help. When comparing different home warranty providers, pay attention to the customer service. Ensure someone is available 24 hours a day, seven days a week to help. Although some homeowners never find the need to file a claim, if a problem arises, they should know who to contact for help to get the matter resolved rapidly. 

    Additionally, the homeowner needs to know the average time for a home warranty claim is resolved with each company they are considering. This includes the time needed for the claim to be processed and the repair process to begin along with the time needed to completely close the claim. 

    Current Protection

    When choosing a home warranty, homeowners must know what protection they already have in place. For instance, household appliances typically come with a warranty that begins on the date of purchase. If a credit card is used to purchase the item, the credit card provider may offer an extended warranty that begins when the manufacturer’s warranty expires. Homeowners need this information when buying a home warranty to ensure they don’t purchase unnecessary or duplicate protection. 

    Replacement Items

    Homeowners might purchase a warranty assuming the full cost of a replacement item or system will become the responsibility of the warranty provider. However, they need to read the fine print before purchasing a warranty to ensure this is the case. Some providers and policies clearly state they will pay the depreciated amount for an appliance or system that must be replaced rather than repaired. The difference between the depreciated value and the replacement cost must be paid by the homeowner. A person needs to know this and budget for the added expense. 

    Credentials

    A warranty company is only as good as the people it employs. Ask about the technicians employed by the company. What credentials do they have, and are they required to take part in ongoing training? The repairs will only hold if they are done correctly. Improper repairs decrease the value of the home and minimize the value of the home warranty in the process. Make certain the company only employs fully trained individuals while using the highest-quality parts to protect your investment in the home. 

    Company Reputation

    Research the company before signing a contract. Learn if any complaints have been lodged against the provider and the nature of the complaints. Discover how the complaints were resolved if the parties have reached a resolution and what steps the company took to make the problem right. When spending money on the home, it’s important to know who you are hiring, as the provider and technicians used could have an impact on the future sale of the home. 

    Repair or Replacement? 

    Discuss with each provider their policy on repairing or replacing an item. When do they decide it is best to replace the item and what type of replacement will they purchase? Will it be one of similar quality or better? If the company opts to repair the item, will they use original manufacturer parts or purchase aftermarket parts from a different supplier? All parts used should be of similar or better quality or the repair might not hold. 

    Additional Coverage

    Does the provider offer the option of obtaining additional coverage? Homeowners need a plan that meets their unique requirements, as no two homes are identical. Some companies save money by offering limited plans with no add-ons, and the customer is the one who suffers. Choose a provider that allows you to pick a plan that is right for your home, whether it is one that covers all appliances and systems in the residence or one that only covers appliances in the kitchen and laundry.  

    Warranty Transfer

    The time may come when the home is sold before the warranty period expires. In this situation, is the policy transferable to the new owner? If so, how easy it is to transfer, and how much will the process cost? This could become a major issue when the time comes to sell the residence, so gather this information before choosing a provider to partner with for the home warranty. 

    Buying and owning a home isn’t cheap. Homeowners need to find ways to keep costs under control, and a home warranty can be of great help with this. Don’t rush the process of choosing a provider for this purchase. Homeowners who do so find they protect their investment in the home and receive a good return on their investment in the process.