Home Warranties: Making Wise Decisions for Home Protection

Home appliances are almost always covered for a certain period by manufacturers' warranties. However, those warranties provide protection only against certain types of damage. The same goes for homeowners' insurance. People who want to make sure their home appliances are completely protected also need home warranties.

What Are Home Warranties?

Before picking a home warranty plan, homeowners should first learn the basics about what they are and how they work.

Despite the name, home warranties are service plans. They come into effect when covered appliances break down, providing an alternative to having to pay for all of the repairs or unit replacements out-of-pocket.

What Home Warranties Cover

While manufacturers' warranties cover damage due to factory defects, and homeowner's insurance covers certain natural and man-made disasters that could destroy a home and its belongings, they don't cover damage that occurs due to normal wear and tear. That's where home warranties shine. 

The level of coverage provided by a home warranty varies depending on what kind of plan a homeowner purchases. The most basic plans are incredibly affordable, but they only cover major kitchen appliances. Homeowners can also get coverage for other household appliances, including washers and dryers, and can even protect their major systems using a home warranty. 

When something goes wrong, all the homeowner has to do is call to alert the home warranty company. A representative will find the right local repair technician to perform the work, and the warranty company will pay for repairs and unit replacements. Homeowners will only need to pay a reasonable service charge.

Are Home Warranties Affordable?

Home warranties are much more affordable than paying for all of the expenses associated with repairing household appliances out-of-pocket. Pricing can be as low as $17 per month for basic warranty plans, and more comprehensive plans can usually be customized so that homeowners only have to pay for the coverage they need.

Almost anyone can afford the added appliance protection offered by home warranty plans

When Home Warranties Are Worth the Money

The extra protection offered by a home warranty is almost always worth the small monthly fee. Homeowners who want to protect their investments aren't the only ones who love home warranties.

Having one in place also makes it much easier to figure out what to do when appliances stop working. There will be no need to call around to every repair technician in town. Instead, homeowners can keep just one number in their contacts lists and rely on that person to help with anything that goes wrong.

The peace of mind that home warranties offer, alone, is worth the money for most homeowners. The one exception is a new-built home in which all of the appliances and household systems are still covered under the original manufacturers' and builders' warranties. If that's the case, it may make more sense to wait until the original coverage runs out to purchase a comprehensive home warranty.

How to Choose a Home Warranty Company

Not all home warranty companies are created equal. Before deciding who to trust, look into companies' reputations among homeowners, figure out whether they offer fully customizable plans, and request quotes that cover all the same appliances and equipment to compare apples to apples.

The decision shouldn't be made on pricing alone, although that's always a factor. Homeowners should choose a company that offers the level of service they need at prices they can afford and has a reputation for providing excellent customer service.