Home Warranty Insurance

home-warranty-programsHome warranty programs are very popular and affordable in today’s struggling housing market.  These warranties can be called by many different names like policies, programs or even insurance.  But no matter what name we call them, the concept is still the same.   Here is how home warranty insurance works.  If you have a covered appliance or major home system that stops working, like your HVAC system, all you do is call the company that you hold the policy with, and they will send someone out to fix it.  Yep, it’s as simple as that.  But wait a minute.  Aren’t you thinking that most insurance policies have a deductible?  Yes, many of the providers do have some sort of deductible policy in place, but many of them refer to this deductible as a service call fee.  Keep in mind that this fee is in addition to the yearly premium.  Warranties can potentially save you thousands of dollars, but most importantly, they can give you peace of mind.

What do home warranties cover?

All of the major providers like American Home Shield, Choice Home Warranty or National Home Protection have a variety of policies and coverage plans to choose from.  The large multi-state providers will have comprehensive plans that will cover every major appliance and system, to smaller plans that cover just the major systems or just the heating and cooling unit.   Other covered systems in your home can be your electrical system, telephone wiring, plumbing or even a central vacuuming unit, just to name a few.  Got a leaky faucet?  Yep, they have plans that will cover that too.  What about pools, spas and hot tubs?  They can cover you there also, but be prepared to pay a little more than the average home owner.

It does not matter if you have a mansion in the Rockies or a cabin in the bayou, all of the major providers should have a plan that will suit your needs.  The difference between the major companies and policies comes down to the reputation that they have in your area and their premiums and deductibles or fees.

How much do home warranty programs cost and how much coverage do you need?

A good appliance service protection plan or warranty policy premiums will usually range in price from just over $200 to around $500 or so.  Yes, they can go higher than that, but that usually happens when home owners need a pool or spa covered under the plan.

Policies at the lower end of the range usually cover specific types of appliances or systems.  You can choose a policy to just cover your major appliances and not your HVAC system for a price at the lower range.  And the opposite is true too.  If all you need is peace of mind when it comes to your heating and cooling unit, but you are willing to play the odds on whether or not your dishwasher will quit, then all you need is a warranty to cover your HVAC system.

The home warranty protection plans at the higher end are usually comprehensive plans that cover all major appliances, your heat pump or furnace, your electrical system, telephone wiring, plumbing and even your doorbell.  Yep, some policies even cover your doorbell.  It doesn’t sound like a big deal for a door bell to quit, but if you have ever had to get up into your attic to try to work on that thing, you will gladly pay a service fee, or deductible, to have someone else fix it.  Deductibles or service trade fees will usually start around $40 and go as high as $100.

Are there home warranty companies that are more trustworthy than others?

appliance-repair-insuranceIf you have read any reviews online, you know that the feedback on all of the different warranty companies is all over the place.  You will find reviewers singing the praises of their provider and others will speak very badly of them. The most important thing that you should think about when reading reviews about any product or service is to make sure that you consider the choice.  The people that are usually satisfied with a product are usually not very vocal about it.  But on the other hand, those that have a negative experience are usually very vocal and passionate about it.  The key to reading between the lines on negative reviews or feedback is to look at how they are similar.  If many customers are complaining or are concerned about similar experiences, like “company ABC cannot be reached after 5:00 pm”, then there is probably cause for concern.