What Is a Home Warranty & How it Can Save You Lots of Money

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If you’ve purchased a home or are on the market for one, someone will mention the need for a home warranty policy. The big questions though are what they cover and whether or actually not you need one. We’re here to help you decide the answers to these questions.

A home warranty is essentially an insurance policy that covers your home. This policy is not to be confused with homeowners insurance, which covers damages or losses to your entire home or possessions (think fire, flood, and the like).

What Is a Home Warranty?

Home warranties cover items in your home that are breaking or malfunctioning. The home warranty company you contract with will send someone to help you fix it, pay for any damage, or replace the item altogether. Items covered under a home warranty include electrical systems, HVAC units, furnaces, and major appliances like your fridge, dishwasher, washer, and dryer.

Home warranties can cost hundreds of dollars annually and often must be paid in full. Some companies offer payment plans to spread out the expense for a new homeowner.

How Much Does a Home Warranty Cost?

– The company itself – Location and type of home (e.g., single-family, condominium, townhome) – Amount of coverage chosen (basic vs. extended) – Age of the property (newer homes tend to cost more) – Need for coverage of additional dwellings on the property (this is called a “comprehensive home warranty” and is often not included in basic plans)

Factors affecting the cost of a home warranty include:

The Best Home Warranty Option

– Best Overall:  American Home Shield – Best Basic Plan:  Choice Home Warranty – Best Value:  Select Home Warranty – Most Responsive:  Liberty Home Guard – Best for Customization: AFC Home Club – Best Appliance Coverage:  First American Home Warranty – Best Additional Perks: Cinch Home Service

Things to Consider When Reviewing Home Warranty Company Options 

– What does the home warranty cover? Look into which specific problems the policy includes. – How much is the cost of premiums? – What is not covered, or what are the exceptions listed in the policy? – What are the service call fees? And what is the average lead time to getting a home visit?

A home warranty may not be the best choice for everyone. It’s a personal decision that should hinge on the kind of home you are purchasing and your financial situation.

Home Warranties, in Summary

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