How to Choose the Right Home Warranty
Researching and comparing plans is very important when choosing a home warranty that meets your needs and budget. Annual and monthly costs can vary widely among home warranty providers. Furthermore, out-of-pocket expenses are only one aspect to consider when choosing your home warranty.
A monthly or annual fee is standard with a home warranty. So is the service fee that is required for each service visit. To select the right home warranty for your needs, it’s key to understand your own priorities with the plan. You don’t want to over-insure, but even more so, you don’t want to under-insure.
First and foremost – is the home warranty company licensed?
Before buying a home warranty, be sure the company is licensed. You can easily have this verified with your state’s department of insurance to ensure they are licensed to do business in the state where you reside. If they aren’t licensed, make sure your state requires it.
What coverage do you need from a home warranty?
As stated above, first it’s best to determine the coverage you need. More often than not, complaints and issues people have with home warranty companies will stem from a misunderstanding of the coverage provided.
Once you’ve reviewed and narrowed down your choices for a home warranty provider, list the appliances and systems you need covered. Visit the companies’ websites and read the exclusions or limitations in all of the home warranty coverage plans. This way you can make a truly informed comparison that won’t just affect what you spend on the plan, but what you won’t have to spend should a breakdown occur. A little sleuthing up front can save you a lot of stress—and money—in the long run.
Finally, be sure to read the terms and conditions for each home warranty plan before you purchase your plan. At NextEra Home, we pride ourselves on full disclosure, transparency and truthfulness with our customers – before and after they become customers.
Ensure you understand home warranty pricing
After comparing the coverage exclusions and limitations of various home warranty companies, familiarize yourself with home warranty pricing. From each company, request a quote and sample contract for the plan they offer that meets your coverage and budgetary needs.
Home warranties will have a service fee or a deductible ranging from $75-$125 that you select at the time of purchase. Typically they’re structured so that the lower the deductible, the higher the monthly or annual premium. So it’s wise not to select a plan just based on these costs. Often (but now always), a lower-cost plan can result in inferior coverage.
At NextEra Home we offer a $75 fixed-rate service fee for all home warranties plans.
How does a home warranty provide different coverage than your other warranties or insurance?
It is key to understand how your home warranty complements or differs in coverage from your other warranties or home insurance.
While home insurance usually covers damage to your home’s structure resulting from events like a natural disaster or fire, it won’t cover a major appliance or system breakdown that results from everyday use. And as you might imagine, the latter is a lot more common.
During the months after purchasing appliances and systems, many items will be covered by the manufacturer’s warranty. You could even have additional coverage if you make the purchase with certain credit cards. For example, American Express often provides up to 24 months of coverage for appliances purchased with their card.
Once these warranties lapse, you are left with the financial responsibility for the repair and replacement of these home systems and appliances.