Home warranties like other insurance policies come with varying terms, prices and conditions. What should you look for when shopping for a warranty for your home? How do you know a warrant company is worth doing business with?
You shouldn’t make a decision based on the initial premiums. After all, low premiums may come with a low level of coverage, poor customer service, or hardly any discounts on service calls and equipment replacements. Be wary of plans that have so many exclusions that it is meaningless. Run the numbers. How much will it cost with one warranty company versus the competition if your furnace needs to be replaced? Pay attention to their dollar limits per repair and the number of repairs you can make per year. You don’t want to have to pay the premiums and then pay for several major repair bills in the same year.
A home warranty company is only worth your business if they have good customer service. For example, if you have to jump through hoops to file a claim, you may not be able to get the coverage that looked great on paper. If they can’t give you advice when there is an emergency, you may void the warranty trying to fix it yourself or calling the first repair person who answers the phone though they aren’t considered qualified under the warranty. Can you schedule the maintenance necessary to keep the warranty in effect? The best warranty providers allow you to file claims online and have 24×7 customer support for any issue you may have. Conversely, the worst companies make you wait a long time for service.
Home warranties, in general, eliminate the need to find a qualified contractor when something breaks. However, you lose the ability to select an independent contractor who may be cheaper. The convenience of them selecting and sending a qualified contractor or referring two or three for you to choose from may be worth it if you have no idea how to vet repair people. If the company is able to provide qualified support for unusual appliances like solar hot water heaters or water well pumps, it may be worth it to have coverage with them.
The warranty is a promise, but not everyone keeps their promises. Do your research regarding the warranty provider before you sign up. Do they nitpick on claims and reject claims they should be covering? Are they asking you to use overloaded repair staff that won’t get to you for weeks? Or will they schedule maintenance visits that turn into a constant sales pitch for expensive repairs you may not need? Are they going to pressure you to replace a seven-year-old furnace that could run three more years? Do they replace broken appliances with cheap models that are prone to failure themselves? Or will they over-charge for a mediocre unit? Another common problem is the warranty firm refusing to cover the appliance because the previous owner didn’t do enough maintenance. They may force you to replace the equipment at a significant out-of-pocket cost to provide warranty coverage. Do your research, too, since you don’t want to select a company based on a low teaser rate only to find out next year’s premiums are much higher.