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How to Choose the Best Home Warranty for Your Home

A home warranty is a service contract that will save every homeowner money if it is used right. But the home warranty industry is competitive, and there are some very untrustworthy businesses operating in this market.

This is why if you want this service to truly work for you and to help you avoid paying huge home appliance and system repair bills, you need to choose your provider with extreme care. This means doing a lot of preliminary research and paying attention to the right things.

How Does a Home Warranty Plan Work?

Home warranty plans are rather simple. You purchase a contract covering a specific list of items and make regular payments on it. Typically a contract’s duration will be a year after which it will be renewed automatically. You might need to pay a fee to cancel the auto-renewal.

Then, if one of the items on the list breaks down, you contact the home warranty provider. They send in one of their contractors, the problem gets fixed, and the policy covers the cost of repairs. You’ll need to pay a service call-out fee, but in spite of this, you will save a lot of money because appliance and home system repairs can be expensive.

Home warranties don’t only benefit you by covering the costs of repairs. Getting some coverage should certainly be on the list of things to do when planning to sell your home. Houses with these policies included in the deal sell about eleven days faster and you should secure a higher price for them. According to recent data, you could get up to $2,300 more on the deal.

Why Choosing the Right Home Warranty Company Matters

Bearing in mind how seemingly straightforward home warranty coverage is, you might think it sufficient to purchase just any policy. On the other hand, you need to understand that there are so many home warranty companies that it is so easy to fall victim to fraud. In fact, due to the nature of home warranty provision abuse is inevitably quite commonplace.

The home warranty industry is poorly regulated. Untrustworthy businesses exploit this in order to cheat customers out of their money. The most common problems in dealing with them are claim denials and poor-quality repairs. In either of these cases, you will have to pay out of your own pocket, so you’ll just be giving away the cost of the plan for nothing.

Unfortunately, there isn’t actually very much you can do about it. Despite the fact that even leading home warranty companies have been involved in big shady scandals, they can’t really be sanctioned by the law because of their uncertain status.

It, therefore, follows that if you want to benefit from this kind of contract it is necessary to choose your provider with extreme care. The following steps explain how:

Step 1: Establish the Company’s Legal Status

The first thing you should do is to determine how legitimate the company you are dealing with really is. Find out whether it is certified to offer coverage in your state. More importantly, learn which authority deals with any disputes that might occur with this company.

You can also look for accreditation with the Better Business Bureau. It isn’t a mandatory requirement for a home warranty provider to be BBB accredited, but it’s a good sign because only the best of the industry veterans do have this status.

It is also wise to check how long the company has been in operation. The safest option in this industry is often a provider which has at least several years of experience.

Step 2: Research the Company’s Reputation

After studying the BBB website and considering the ranking assigned to the company there based on complaints and testimonials, you should then move on to review websites. Look up every provider you are considering on Google Reviews, Yelp, and any similar portal that may be popular in your area.

Your task is to understand what kind of reputation home warranty providers have with customers. You should also look at independent review websites to get a more objective opinion of every service provider.

Bear in mind that no home warranty provider has a five-star rating on any consumer forum. This is because people share their bad experiences very much more frequently, whilst taking the good ones as their due. So consider the information available by all means, but don’t make it the deciding factor for you.  Luckily, you can find home warranty information on House Method to help you select one that’s right for you.

Step 3: Understand the Coverage

Make a list of the most trustworthy providers in your area and start looking at the plans they offer. Home warranties vary in coverage, so you should focus upon finding the one that works best for your specific needs.

When checking the coverage, note whether there are repair or replacement exceptions. You should also find out what other types of services are included. For example, if the plan covers roofing repairs you need to understand whether it will cover mandatory roofing maintenance as well. If yes, to what extent exactly?

It should be noted that the majority of companies offer only a few basic plans. Usually, they are appliance only, basic plans which cover only the simplest appliances and systems, and premium plans which cover the most important items in the average home. There is also an optional coverage feature that allows you to include systems or appliances that are rarely covered by home warranties, such as the aforementioned roofing.

Step 4: Count the Costs

A home warranty plan will cost about $400-600 a year. Usually, you’ll have to pay in small monthly installments.

However, you will also need to pay a service call fee ($50-100 on average) each time you call a contractor. Remember to research common breakdown causes and costs before purchasing the plan. This will give you some idea of how much money a breakdown of certain major appliances or systems will cost you. Use these calculations to advise you whether a home warranty will benefit you personally.

Step 5: Double-Check Terms & Conditions

No matter how trustworthy the provider seems, be sure to read the contract to the letter. You need to be 100% sure that there are no hidden fees or loopholes that the provider will be able to use to deny your claims.

Final Thoughts: Don’t Miss a Step When Choosing a Home Warranty Company

The home warranty industry is big and growing fast, and so are the scandals within it. Even big companies in the industry are sometimes brought up on fraud charges. Therefore, you can’t be too careful when choosing the provider of this coverage. Research every option thoroughly and remember that if a deal seems too good to be true, it probably is.


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About the Author

Kaya Wittenburg

Blog Author and CEO

Kaya Wittenburg is the Founder and CEO of Sky Five Properties. Since the age of 10, real estate has been deeply ingrained into his thoughts. With world-class negotiation and deal-making skills, he brings a highly impactful presence into every transaction that he touches.

He is here to help you use real estate as a vehicle to develop your own personal empire and feel deeply satisfied along the way. If you have an interest in buying, selling or renting property in South Florida, contact Kaya today.

Feel free to call me at: (305) 357-0635
or contact via email: