How to Buy a Home Warranty That Fits Your Needs
Key takeaways:
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Home warranties help cover repairs and replacements due to normal usage, offering peace of mind and potential savings on unexpected costs.
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It's crucial to consider appliance age, home inspection results, and specific coverage needs. Coverage varies by state, climate, and home specifics, urging a careful assessment of what's included and the necessity for add-on options.
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Homeowners should differentiate home warranties from insurance, ensure their coverage meets their needs, and be mindful of deductibles and service fees.
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Thorough research into company reputations and customer feedback is essential for making an informed decision.
When your home systems and appliances stop working, it may feel as if your life is at a standstill. However, if you have already purchased a home warranty, you'll know exactly who to call to get your beloved appliances up and running again. The hard part is knowing which plan is most suitable for your needs.
According to Warranty Week, 1.4 million out of the 5.64 million existing homes sold in 2020 in the U.S. had home warranties purchased by either the buyer or the seller. This stat shows that people see the value of home warranty coverage, and we completely understand why. Additionally, Google Trends shows that people have been searching for home warranty products more than ever in the last six years.
Are you ready to shop for the home warranty coverage that's right for you?
Why should you consider buying a home warranty?
If you're unsure about the value you can get from a home warranty plan, we're here to help you determine the benefits.
Peace of mind
For starters, a home warranty plan gives you added protection. While homeowners insurance and extended warranty policies can protect your home and your appliances from specific issues, they do not protect your appliances and home systems from the normal wear and tear that happens over time. This is essential protection as appliances begin to wear down as they get older.
Reduce house maintenance and repair costs
Oh, but there's more. One of the best reasons to buy home warranty coverage is that you can save money on costly repairs and replacements that creep up unexpectedly. Imagine planning a huge vacation or saving for a new car and then having to dip into your savings to buy a new A/C unit because the manufacturer’s warranty ran out. This isn't exactly the kind of surprise that most people look forward to. With a home warranty plan, you'll pay a low monthly fee and avoid shouldering significant repair costs alone.
Now that you know some of the benefits of home warranty coverage, let's look at some essential factors you should consider.
Determining your home warranty needs
Every home and every situation is different. Various factors can impact the coverage that is best for your home. Here are some helpful:
Look up the age of your appliances
One of the first factors to consider is the age of your appliances. The older your home appliances are, the more likely they will start to stop working and give you issues.
Save and review your last home inspection report
Typically, a home is inspected when it changes hands, but that may have been a while. The results of a recent inspection will give you a better idea of what systems and appliances you should focus on. Finding a quality home inspector is vital for getting a detailed home inspection report.
Be wary of pre-existing conditions
Although a home warranty can offer significant savings, it doesn't cover everything. Ensure you know about any pre-existing conditions to guide the home warranty coverage you need.
Estimate your annual home maintenance costs
When trying to diagnose the savings you can get from a warranty plan, it is essential to know your home repair costs and compare them to the price of the plans you are looking at. This exercise can be critical in estimating your savings.
Define your coverage needs
Your coverage and the rules behind it can vary by state, climate, age of your home, age of your appliances and many other factors. Take those in consideration when buying a new home warranty plan.
Explore additional coverage
Home warranty plans can cover a variety of appliances and home systems based on your specific needs. Ensure you know what's included in your home warranty plan and what's typically considered an add-on before purchasing.
Research and selection process to find the right home warranty company
Once you have a good handle on the age of the appliances and systems in your home and know the home warranty coverage you need, the next step of your home warranty buying process is to do some research on the providers. Follow this guide to find a home warranty that's right for you.
What to look for in a home warranty company
Some things to look for as signs of a reputable company are easy-to-understand coverage and clear plan options. Also, look for statements of workmanship guarantees and an extensive network of service providers to ensure your plan is there for you when needed.
How to use reviews and testimonials to guide your decision
Reviews and testimonials are great resources to use when searching for the right home warranty plan. Be wary of companies with very few reviews, as this could indicate that they are not legitimate. Also, don't put too much stock into a handful of negative reviews if a company has a lot of positive feedback.
It’s also important to note that you need to look at multiple review sites to make the best decision. Some review platforms are more prone to fake and malicious reviews going unnoticed, creating a negative bias for first-time customers. Make sure you glance at positive and negative reviews to form the most objective assessment.
Understand the role of consumer reports and industry ratings
In addition to user reviews, consumer reports can also be a valuable tool in finding out who the best companies in the industry are. When buying a home warranty plan, check out websites like ConsumerAffairs that dive deep into how companies perform.
Understand service fees and coverage caps
What's a service fee? In essence, this is a fee you'll pay out of pocket whenever a service technician comes to your home to attempt to fix one of your appliances or home systems. Different plans have different service fees so make sure you read the fine print when you sign a contract.
Consider the service provider network of different companies
Even if your plan has excellent coverage options, its usefulness only goes as far as service providers do. Do your best to find a home warranty company with plenty of highly rated service providers. Speed and expertise are of the essence when any of your crucial home appliances break.
Purchasing a home warranty plan and what's next
Once you have compared providers and determined your coverage needs, it’s time to purchase your home warranty plan. Most companies will allow you to complete the process online if you are confident in your research and decision.
However, if you want additional guidance, you can buy a home warranty* plan over the phone. Representatives like the ones at Cinch Home Services can help you find the best plan to fit your needs and budget.
*The product being offered is a service contract and is separate and distinct from any product or service warranty which may be provided by the home builder or manufacturer
Once you have your plan and peace of mind, you should know how to put it to work when needed. To do that consider the following:
- Understand how to make a claim: Most providers offer an online platform, or a by-phone service to make a claim. Once you know something is wrong with your appliance, you file a claim and wait for the provider to respond back. Read more about how this process works here.
- Save and keep your terms and conditions: It’s important to read and keep your terms and conditions in your “all things important” drawer. Not knowing how or when you are covered will lead to frustration and disappointment on both sides of the agreement.
- Renewal timing and policies: Make sure you keep tabs on when your home protection plan ends, and what the policy on renewal is. The last thing you need is a broken appliance in the week before your plan ends and renewal is not scheduled.
When is the best time to buy a home warranty?
Although there is no time that is the best to start your warranty coverage, many consumers tend to buy their plans during the spring and summer months when they realize that they need it the most.
However, the sooner you have coverage, the quicker you can be protected from costly repairs and replacements.
How much does a home warranty cost?
According to Investopedia, home warranty costs vary from $423 to $892 annually, influenced by location, house size, and coverage selection. Different companies have unique pricing strategies, deductible levels, and state-specific offers, impacting overall costs. Remember that additional coverage for items like pools or specific systems increases the cost.
Related Blog Post: How Much Does a Home Warranty Cost?
Avoiding common pitfalls when buying a home warranty
Many pitfalls can trip you up when purchasing home warranty coverage. For starters, thinking a home warranty is the same as homeowners insurance or an extended warranty both top the list. Homeowners insurance and extended warranties protect your home and appliances from large-scale catastrophes and manufacturer defects, whereas home warranties offer protection against everyday wear and tear. What are some other pitfalls you should avoid?
- Buying a home warranty when things break down: Most pre-existing issues are typically not covered. So, the time to get a plan is before something breaks down, not afterward.
- Getting a home warranty with minimal coverage: Although better than nothing, if you have home warranty coverage that doesn't meet the needs of your home and appliances, you could spend more than you bargained for.
- Overlooking deductibles and service fees: Ensure you understand what the service call process looks like and what triggers coverage. Even if you have a premium you like, it might come with less palatable deductibles and service fees.
The Cinch Home Services advantage
What makes a Cinch home warranty* protection plan different?
At Cinch, we offer:
- A digital dashboard you can use to request service 24/7 from anywhere
- A $25 credit to use toward filters for your A/C unit
- Coverage for appliance components and parts like knobs, doors and drawers
- Easy-to-read plan documents so you know exactly what's covered
- 180-day guarantee on covered repairs
*The product being offered is a service contract and is separate and distinct from any product or service warranty which may be provided by the home builder or manufacturer.