Do I need a home warranty?
The idea of a home warranty is to take over where the homeowners policy leave off. This will help homeowners keep their homes running smoothly. The home warranty plan can provide coverage for unexpected breakdown of the major home heating, air conditioning, appliances, electrical and plumbing systems. When a covered home warranty system breaks down, all you have to do is dial an 800 number anytime of the day and a professional service technician will be scheduled to come out and solve your issue for a predetermined trade service fee. The service usually comes with a specified guarantee on parts and labor. If the covered item can not be fixed, it is normally replaced by the home warranty company. One reason people buy home warranties is that it is easier to budget 2-3 trade service fees per year verses having to pay the entire cost of the repair or replacement.
Click here to see a chart of what you could expect to pay to repair or replace many home systems or appliances.
How to pick the right home warranty company?
It seems like home warranty companies are coming and going all the time! Based on our experience here are some guidelines you can use to find the best home warranty for your needs. Note: These are only home warranty guidelines and in some cases, your requirements my require a home warranty company not meeting some of these guidelines.
- Go with the name of a home warranty company that you trust
- 20+ years of time in business
- Flexible Payment Plans
- No 30 day waiting period for most items
- No home inspections
- Multiple units or systems and appliances are covered for no additional cost
- Covers all makes and models, no matter what the age
- Home warranty coverages available for Buyers, Sellers, Landlords, Investors, Mobile Homes, and Manufactured Homes.
- Keep with one company for all your homes by using a nationwide company
- 800 Service line available 7×24 with a live person and internet access
- Lots of existing clients
- The time to answer the phone should be less than 30 seconds – which usually means they are staffed correctly
- What is the customer retention ratio?
- Avoid Sucker Rates
- Transferable Home Warranty To New Homeowner
- No limit the number of calls
Who can get a home warranty?
Home warranties are normally available to home buyers, sellers, landlords, and investors. They can cover single family homes, mobile homes, manufactured homes, condos, town homes, duplexes, Fourplex, and more…
Home Buyers Benefits
- Simplicity and Cost Savings – One contract to cover all the working parts of the home and one 800 number to call.
- Peace of Mind – You no longer have to open the yellow pages and pray. One number to get qualified professional for a fixed trade service fee.
- No Need For a Home Inspection – We do not recommend any home warranties that require a home inspection.
- All Makes and Models are usually covered no matter what the age of home systems or appliances. Check the contract for excluded items. Excluded items will usually be of commercial grade.
- No limit on the number of service calls you can make
- The home system or appliance is repaired or replaced subject to contract.
- Home Warranties can usually be transferred.
*We recommend that you refer to the contract for specific coverages, exclusions and limitations.
Home Seller Benefits
- Competitive advantage over the competition on the market.
- It can discourages price bargaining as the buyer will have confidence in the home.
- Helps prevent liability and hard feelings after the sale. The buyer can call the home warranty company and know they have coverage on items covered by the warranty plan verses no coverage at all.
- Home Warranties can usually be transferred.
- No unexpected repair costs for the seller on covered items.
New Home Buyer Plan verses Existing Homeowner Plan?
New Home Plan – The new home warranty plan is for consumers who are in the process of buying or selling a home as part of a real estate transaction. New home plans usually come in three tier plans. There is a basic plan, upgraded plan and optional coverages. The basic plan covers many of the home systems and appliances. The upgraded plan usually adds coverage for some home system and appliance parts that are usually excluded in a basic plan. The optional coverages are for items like the refrigerator, ice maker, pool /spa equipment, and many more. The new home warranty plan may provide an option for a septic tank and roof coverage which are not renewable after the first year.
Existing Home Plan – The existing homeowner plan is for those consumers who already own a home and decide to purchase a home warranty plan. An existing home warranty plan usually comes in three plans with some optional coverages. The basic (essential, silver,..), the standard (enhanced, gold,…) and elite (preferred, platinum,…). The basic plan usually covers the basic components of the home. The standard plan adds additional coverages and may cover some items excluded under the basic plan. The elite plan will usually cover additional components and may cover some excluded items under the standard plan. In addition to all these plans there are usually optional coverages for the pool, spa, well pumps, freezer, and more. These plans normally do not offer roof or septic tank coverage.
We recently ran into a company that even required that you have a existing plan in place before they would sell you a new one.
Not sure you need a home warranty? Check out the estimated repairs costs if you do not have a home warranty!