Why Home Warranties Can Save You Money Even if You Are a Proficient DIYer
A home warranty can be a very valuable asset to homeowners. The biggest pitfall of owning a home is that you are responsible for anything and everything. That means if it breaks down, the responsibility of paying for it to be fixed falls upon the shoulders of the homeowner.
But when a home warranty comes into play, it can help you absolve some of those costs, similar to having insurance. Typically, depending on local customs, either the seller will pay for the home warranty coverage as part of the sale of the house or the buyer will pay for it after the home has been purchased.
From there, you call the home warranty company if a home system or appliance stops working or breaks. The company calls a provider, the provider fixes the issue, and then the homeowner pays a small trade service fee which can be negotiated when you sign up for the plan.
The cost of home maintenance can be around 1-4% of the home’s value annually. When the cost of your home gets into the multiple hundred thousand dollars, these costs can really add up. Your heating and cooling costs can also vary based on the systems that you use and it is important to know the costs associated with each different type of heating and cooling system.
What’s covered under the home warranty?
Generally speaking, the things covered under the warranty are all indoor items: water heater, furnace/heating, doorbells, dishwashers, A/C units, range and over, and a number of other things. There are plenty of things that are not covered but can be added to your individual warranty for additional costs.
You can add things like spa or pools, haul-aways, faucet repairs, refrigerators, washers and dryers, sprinklers, and a number of other things that have not been included. There will sometimes be exclusions that are noted in the policy, so pay attention to those.
What can cause the warranty company to deny a claim?
There are plenty of times that a home warranty company will see like they actively don’t want to pay for a claim and there are definitely items that will give them the right to void those claims. Things like code violations, unusual wear and tear, improper maintenance, a pre-existing disclosed condition in the home inspection, or improper installation.
Make sure you have all of these bases are covered before you call your home warranty company to repair or replace an item covered under your warranty.
How do you know if you need a home warranty?
If you are not handy or don’t really know how to maintain or repair items that are covered under the home warranty, it can be highly beneficial to have one. It gives you peace of mind and a bit of protection against very costly home expenses, giving you a buffer to protect emergency fund money if you have it.
Then again, there are definite drawbacks to a home warranty. For one, these companies will find any reason to not pay for a claim. They often reject claims due to improper maintenance and sometimes, when buying an older home, you can inherit a piece of equipment (like an A/C unit) that has been improperly maintained by the previous owner.
Additionally, they provide little flexibility. If you prefer a specific contractor, they may not fall within the guidelines that the home warranty company has set forward. It is important to know where your limitations are and to make sure that if you do go with a home warranty company, to make sure that everything has been maintained to the best of your abilities.
Who will the home warranty company send out?
So, what happens when you finally come to an agreement with the home warranty company on repairing or replacing something covered under your agreement? From there, the home warranty company will contact a list of providers that they have a business arrangement with. The provider will then call you, the homeowner, to set up an appointment.
Typically speaking, you will get a repair technician from the provider company that has a working arrangement with your home warranty company. The technician will come out to your home and fix the problem or, if the appliance can’t be repaired, will replace and install a new one depending on the coverage of your contract.
Why even a DIYer would use a home warranty
I know what you are thinking: “I am a handyman and can do all of that myself!” And in some smaller fixes, that can be true. But in the event that you are properly maintaining the appliances covered under your contract, it can actually be cost-efficient to use a home warranty.
Sure, the company will likely fight a lot of claims in order to not pay them but if they have no other recourse, they will cover those items at a cost that will be cheaper than you going out to buy the appliance and then installing it yourself.
There are times when “do it yourself” doesn’t necessarily mean “saving money.”
How to find the right home warranty company
To find a reliable home warranty company you will need to research various options available to determine which of the local provides can be trusted. Start with running a simple Google search for the top home warranty scandals. This way, you’ll find out which companies have been involved in legal cases concerning fraud and other issues, which prove them to be if not unreliable, then at least dishonest.
There are dozens of home warranty companies today, and studying each of them thoroughly will be a waste of time. To make the process of choosing the best provider easier, you can use lists of top providers compiled by independent review platforms, like top 10 companies of ReviewHomeWarranties. This way, you’ll get a short list of providers with detailed and unbiased reviews. Of course, you should do more research, but it’s a great place to start.
When searching for a warranty, you should also use trusted resources like Consumer Reports to learn what to pay attention to when selecting a policy. When dealing with a home warranty, you need to focus on plan coverage details as well as terms and conditions of the contract. Find out exactly when the company will make a payout so you don’t end up disappointed if something in your home does break down and the provider rejects your claim on the grounds of contract terms.
Making the right choice
The ugly truth is that even when you feel comfortable with the service that you have chosen, it isn’t 100% fool-proof. There are likely things that they will not cover that will leave you feeling less than thrilled, but that is why you have to do your due diligence beforehand. Leave yourself in a position to receive as few surprises as possible.
Home warranty companies can have a great impact in your life if you aren’t happy but, as with everything else, you need to protect yourself.