A standard home warranty contract operates for a duration of a year and then needs to be renewed. However, a year-long home warranty plan is not the only option out there. Home warranty companies have come up with a couple of duration varieties for customers’ convenience. Read all about it in this post. In addition, you’ll also find out about all the other important time constraints in such contracts.
A home warranty is a service contract (NOT an insurance policy) that provides repairs and replacements for aging home systems and appliances for low prices. Generally, the term is for a year and the plans are renewable thereafter.
Some home warranty companies offer a few months of free coverage during the first year of enrollment. If the plan is renewed, the second term begins after these free months are exhausted. You will get a notice of renewal from the company alerting you that only a few weeks are left.
Many reputable companies offer multi-year coverage plans. You can get their services for 2-6 years on a single purchase, depending on what you choose. You get unlimited repairs and replacements during those years, subject to the terms and conditions of the service agreement.
Note: Some people use the term home warranty when they are actually referring to the builder’s warranty or new construction home warranty. In contrast, a builder’s warranty generally covers some aspects of home systems for a year and covers structural items for 10 years.
An appliance extended warranty covers individual appliances after the OEM warranty expires. Some home warranty companies offer plans covering numerous appliances, whereas companies like Home Depot offer extended warranties for single appliances. These tend to be a year-long in duration. A few companies offer real estate appliance warranties for multiple years.
When the home warranty plan gets closer to the expiry date, you can either renew the contract or let it lapse if you did not find the warranty useful. Alternatively, you could explore a different company’s services.
It is important to keep in mind that a waiting period kicks in if the home warranty purchase decisions are made after crossing the date of expiration of the contract. To avoid the waiting period, you should either renew or change companies before the expiration date.
Further Reading – A guide to renewing or changing your home warranty provider
An annual home warranty plan can be purchased by homeowners, home buyers, sellers, or realtors. The pricing and coverage details vary a little based on the nature of the customer’s needs.
A homeowner’s warranty typically covers HVAC, electrical, plumbing systems, water heater, refrigerator, microwave, oven/cooktop, garage door opener, dishwasher, fans, etc.
A home buyer’s warranty also covers these items but may also include code violation upgrades, disposal, permits mandated by federal or local government, etc. Seller coverage generally excludes some of what buyer warranties cover. Some companies may add peripheral/accessory parts under real estate coverage that homeowner warranties generally exclude.
Multi-year plans work similarly, covering the same items, subject to coverage caps or dollar payout limits.
Further Reading – What’s Covered & Not Covered by a Home Warranty?
On average, multi-year home warranty plans tend to be less expensive than annual plans. When you add up the cost of home warranties purchased annually for 5 years and compare to a 5-year contract, the latter will be cheaper. Home warranty companies that offer multi-year contracts provide discounts on the same.
For instance, a First American Home Warranty buyer coverage called the Value Plan costs $490 for 1 year in California, for a single-family home. The 2-year version of the same plan costs $905, resulting in savings of $75. Other buyer plans also show similar savings for the multi-year option. Not all companies do this, however.
The home warranty costs however don’t depend on contract duration. The choice of plan, state of residence, number of add-ons, etc. affect the premium cost. Many companies offer discounts on purchases billed annually.
So far, we have seen the details about the most famous of all timeframes mentioned in the service contract, the duration. A home warranty contract lasts for a year, at the least, but there are a bunch of other timelines and deadlines mentioned in the service agreement that are equally important to note. Let’s take a look at them.
Home warranty companies have a waiting period after the date of purchase of the plan. This waiting period is generally 30 days, though a small handful like Super Home Warranty, has a 15-day timeframe. The home warranty becomes effective after this period. Real estate plans come with no waiting period due to the needs of real estate agents.
This period is meant to prevent misuse of the home warranty. The concept is similar to insurance plans, where you cannot purchase them after the fact to cover damages that were already present. The waiting period increases the likelihood that claims filed afterward are for home systems and appliances that truly stopped working during the covered period. It ensures that people aren’t trying to get replacements for ‘already faulty’ items.
If a home warranty company offers no waiting period, that is not a very good sign. They may have a high rate of claim denials or complicated contracts with many loopholes. Waiting periods allow people with genuine breakdowns to get quality services.
Pro-tip: To get the waiting period waived off, a customer should show continuous home warranty coverage. You can change companies if you aren’t satisfied with the previous one but do so within the expiry date.
Most home warranty contracts state that the contractor dispatch can take 2-4 business days. The customer support teams accept claims 24/7 and try to schedule services according to the convenience of the customer plus the service contractor. Most companies may try to expedite service delivery in cases of emergency requests.
Our reviews indicate that the average time taken to send in a service technician is 48 hours. We have some reports of technicians taking a week to arrive, either because of a heavy demand period or some scheduling difficulties. It also depends on the contractors with some reputable ones being more prompt than others. There are also a few reviews stating that they arrived the very next day.
There are a handful of companies that allow you to choose a contractor, or hire your own, while they pay for the approved services. Here, the time variable is the duration to receive payment. Our reviews indicate that these companies may take 7-10 business days to send in reimbursements; though there are cases where it has taken many weeks.
Most home warranty companies offer service guarantees- parts and labor guarantee against recurring problems. Generally, if the item fails within 60 days, despite the repair being conducted, the company sends in technicians again at no additional cost. You don’t have to pay another trade service fee (unless the breakdown is due to a totally unrelated problem).
A few companies like Cinch Home Services and Sears Home Warranty offer 180-day workmanship guarantees. Some companies have parts and labor guarantees of different time periods. Choice Home Warranty offers 90 days for parts and 60 days for labor.
Sometimes customers may be dissatisfied with the service or claim denial on the pretext of pre-existing conditions. Such disputes are settled by arbitration according to the service contract clauses.
Most home warranty companies allow customers to cancel the plan without charge within 30 days of purchase. Some of them deduct an administrative fee.
If you cancel the home appliance insurance plan after 30 days, the companies usually deduct an administrative fee and refund the pro-rated amount for the remaining contract duration. They also subtract the amount for any claims made so far.
A few companies may have a shorter free cancellation period like BFS Home Warranty which only allows 10 days.
Based on our customer reviews and our perusal of their offerings, here is a shortlist of some reputable home warranty companies.
They are an award-winning home warranty company, with a large number of satisfied customers. The plans offer high coverage caps. They offer a 90-day parts recall period and 30 days for labor. There is a 30-day free cancellation and the admin fee at $45 is lower than most other competitors. Having spread to 49 states, they operate almost nationwide.
American Home Shield is the largest home warranty company and the first one to have originated the industry. Their plans have a wide range of items and some of the highest coverage caps. They have a 30-day waiting period and 30 days of service guarantee. Though the guarantee is on the lower side, this company has some of the most satisfied customers and is, therefore, a decent bet to get a multiple-year plan.
Having taken numerous factors into consideration as you can see above, we recommend starting out with annual contracts. When you purchase your first home warranty, there is a lot to understand in order to make the best of it. You also have to learn how much lifespan do the systems and household appliances have left and the likely problems. People who understand the service contract limitations well are generally quite satisfied with the savings.
Once you have a year of experience, you can choose to continue with multi-year plans or switch service providers if you aren’t happy with the previous one or you want to get some nice discounts.
The contract term duration does not depend on the age of the home. Home warranty coverage extends over the items regardless of their make, model, or age.
You can purchase a homeowner’s warranty at any time, but a buyer’s warranty can only be bought up to 30 days upon closing a home sale, and a seller’s plan can only be purchased for a property on the market.
If by new home warranties, the reference is to the service contracts for repairing aging home systems and appliances, they are a year in length at the very least.
When a home warranty is transferred to a new owner, it lasts for the remainder of the policy term from the date of transfer. For instance, if the plan is transferred 4 months after purchase, the new owner gets coverage for the 8 remaining months.
You can reduce the waiting period by showing proof of continuous coverage by a home warranty plan before the purchase of the current one. If there was no lapse between the previous plan and the new one, the company may waive the waiting period.
So far, all the companies have a waiting period for homeowner warranties. However, there are real estate plans from companies like Cinch Home Services that have no waiting period and coverage is effective immediately.
You could buy a home warranty during a major sale, or avail quotes from us, choosing companies that are providing offers. Another option is to get a multi-year contract from a company offering discounts on the same- if you are satisfied with their services.
When you buy a home warranty plan, there is a waiting period of 10 to 30 days based on what the company offers. After this period you can start making claims whenever a home system or appliance covered by the plan breaks down due to normal wear and tear. You can contact the customer service representatives online or by calling them over the telephone hotline of the company. Most home warranty companies offer 24/7 services.
Once your claim has been registered, the company sends a service technician to diagnose whether the breakdown is eligible for coverage. The technician reports their opinion to the company which then decides whether to offer or repair or replacement or a cash payout. You generally have to pay the trade service fee at this point. After this, the technician completes the service.
The ideal time to purchase a home warranty depends on the age of your home. A new home has manufacturer warranties and builders’ warranties operational and overlapping with home warranty plans which could void the latter. Once the overlap ends, RTHE you can get a home warranty at any point. A pre-owned home is eligible for home warranty coverage at any time.
If you’re looking for a real estate plan, you can purchase a home warranty when you put your home on the market, since coverage begins right away. A home buyer can get a buyer’s warranty up to 30 days from the home sale’s closing date.
The roof leak coverage component of the home warranty plan is co-terminus with the rest of the home warranty, i.e., the roof is covered for one year or more based on the home warranty plan purchased. It lasts as long as the overall home warranty does.
Yes, newly built homes typically come with a structural warranty provided by the builders. It is also called a new construction warranty and covers things that are permanent parts of the home like concrete floors, plumbing, or electrical work.
The kind of home warranty that covers aging home systems and appliances against breakdown does not cover structural damage to the home. A builder’s warranty covers the load-bearing elements of the home.
A home warranty direct final notice is a scammy practice and not sent by home warranty representatives. It generally tells people that they haven’t paid for the plan and will face consequences. When you receive such a letter, contact the sender immediately but NOT use the contact details on the letter. Use the official contact information from the company website – after ensuring that you are on the legit one.
You can generally make an unlimited number of repairs per term, subject to the coverage caps or dollar payout limits mentioned in the service contract.
Yes, you may be able to sell your home faster, if you include a home warranty plan for the buyer. A Service Contract Industry Council study indicates that homes sold with a warranty move 16% faster.
You can log into your service account through the company’s website or you can call them over the telephone number provided for filing claims.
Home warranty companies do not make it necessary to have maintenance records or home inspection reports for the successful processing of filed claims. However, having them minimizes your chances of claim denial.
No, you cannot get home warranty coverage for items that are not working at the time of purchase. It is precisely for this reason that home warranty companies have waiting periods.