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Home /  Home Warranty Guides / A Guide on How to Purchase a Home Warranty
last_updated_date Last updated: November 15th, 2021

The complete guide on purchasing a home warranty

PUBLISHED: OCT , 29 2021 • 6 MINS READ

Whether you plan to buy an older home or already own one, home systems and appliances are likely to break down over time. The cost of unexpected repairs and replacements can burn a hole in your pocket. With a home warranty, you can minimize this cost as it covers the expenses of fixing major household items that break down due to normal wear and tear. Home warranties can offer peace of mind to home sellers as well by helping them close the deal sooner.

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In this post, we delve deeper into what to expect from a home warranty, ways to save money while purchasing it, and everything else you need to know about it. We also have compiled a list of the most popular home warranty companies with their plans based on their ratings and offerings.

How to Purchase a Home Warranty in 8 Easy Steps

The following steps will help you find the most appropriate home warranty plan:

Step 1: Gather the maintenance records of all the home systems and appliances

It can end up costing you later if you fail to keep track of the maintenance records for your home systems and appliances. Your claim can be denied due to not having adequate paperwork for the maintenance of the appliance. As home warranty companies typically do not cover known pre-existing problems, having these maintenance records can demonstrate a lack thereof.

Maintenance records can also help organize information about equipment repair and determine the best maintenance schedule for specific equipment. When keeping maintenance records, you should always include the following details:

  • Dates of recent installations or replacements of the equipment
  • Basic details of the items
  • The cost of the items
  • Place of purchase
  • Model numbers
  • Receipts (if you have them)
  • How often each item has been maintained

Step 2: List out the items needing coverage

When choosing and obtaining a home warranty, you should consider the coverage you need. Identify appliances or other items that may require future repairs. Check which items are still within the warranty period and don’t require coverage. You can also identify items that need to be covered based on your maintenance records.

If your home items are likely to fail or will wear out over time, then a home warranty will be a good investment. A home warranty can reduce the cost of repeated repairs for household items that malfunction frequently.

The retail cost of repairing devices like AC or water heaters can be more than $200 (depending on the defects), whereas, with a home warranty, you need to pay only around $25- $60 per month. It will also cover other major home systems and appliances.

Step 3: Research home warranty companies

You must always research the company before purchasing a home warranty to gain full knowledge of them.

  • Search online for home warranty companies serving in your area.
  • Check out the service quality of the home warranties and read their reviews.
  • Check the pricing and coverage on the home warranty website.
  • Find out if the company has a high consumer rating.
  • See if they offer specific or customizable plans.
  • Contact the warranty providers directly to learn more about their plans.

Step 4: Check out reviews and talk to friends and neighbors

Consider asking for feedback from a friend or a neighbor about their experience with home warranty services. You may also check online reviews of the companies you shortlist to see what others say about them. You can check out the company’s rating, how long the technician takes to arrive, and if they provide emergency services.

However, you should read the fine print thoroughly to make an informed decision. Make sure to understand how this contract pertains to your needs before signing.

Step 5: Evaluate the plans in depth

It would be best if you bought a plan that can cover your home’s necessary critical systems and expensive appliances. You can check out the plans and pricing before you purchase them.

Many home warranty companies offer flexible plans that cover essential devices to customized plans based on your needs. Make sure to research their exclusions and coverage caps to understand what they don’t cover and what amount of repair services you can receive.

Step 6: Find out if there are prerequisites to buying a plan

Most home warranty plans don’t have any prerequisites, but often the company may not cover pre-existing conditions that are known. Therefore you can undergo a home inspection to determine any problems with your appliances and systems. Before buying a home warranty, don’t forget to check the terms and conditions.

Step 7: Get quotes from the companies of your choice

Once you decide on any home warranty plan, get a quote from that company. You can even get free quotes from our site to check what they offer.

To make the choosing process easier, we have listed down the top home warranties with their features.

ServicePlus Home Warranty

Guaranteed response in 48 hours
Top class technicians
Low deductible
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Discounts – $200 off on Plans + 2 Free Months

Choice Home Warranty

Offers 24/7 customer service
Large network of contractors
Home inspections aren’t required for coverage
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Discounts – First Month Free + Limited Roof Coverage

Select Home Warranty

Offers free roof coverage
Trial period of 30 days
Large network of experienced service contractors
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Discounts – Get $150 off+ Free 2 Months Coverage

American Home Shield

24/7 service calls
Option to choose your own service fee
Provides higher coverage caps
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Discounts – $100 off for multiple properties + Referral Discount ($25 Gift Card)+ NAR Discount of $50

The Home Service Club

24/7 customer service
No age limit on covered items
90 days service guarantee
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Discounts – Offers promotional discounts on checkout

Step 8: Pay the plan amount either on a monthly or annual basis

The cost of a home warranty depends on the chosen plan, optional add-ons, and the home’s location. You have to pay an amount called a premium that can be paid monthly or annually. In addition to the premium, home warranties charge a deductible (also called a service or trade call fee) of around $65 to $125 every time you file a claim. Any other applicable charges will be stated in the contract.

What’s the best way to save money when you buy a home warranty?

While purchasing a home warranty, here are a few things you must know to save money:

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Understand the Warranty Contract

There may be limitations to your home warranty; for example, most companies do not cover pre-existing defects. Your systems and appliances should also be in good working order before the policy kicks in. You should also know that your warranty may have many exclusions. For example, one company may include refrigerator repairs or replacement in standard coverage, while another company may cover the same as a supplement. Most companies exclude accessory parts like shelves, knobs, etc.

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Check your budget

Choose a company whose premiums fit your budget. You can choose monthly payments if it helps. Home warranty policies typically charge a deductible for each visit to the home. Some companies offer lower service fees but high premiums and vice versa. Hence, analyze the costs and the deductible of the company before purchasing.

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Take Advantage Of Our Offers And Discounts

Home warranty companies offer various ongoing discounts. You should keep an eye on them to take advantage of low prices or get the best deals. You can get some exclusive deals from our site as well.

Mistakes to Avoid When Getting a Home Warranty for the First Time

Below is a list of mistakes you can make when choosing Home Service Contracts:

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Assuming the warranty is included when purchasing a home

While purchasing a home, most homeowners assume that a home warranty is included with the home cost, which may not be the case. Sometimes you may get a builder warranty with the property, but usually, a home warranty is not part of a new home purchase. Buyers of older homes should ask sellers to include one.

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Assuming all appliances and systems are covered

In most cases, homeowners assume that the home warranty covers the major home items when they don’t. Make sure to review the terms and conditions of the service contract before purchasing, so you aren’t caught unaware by exclusions.

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Skipping the inspection of the home you are buying

When buying a home, not inspecting it is one of the biggest mistakes you can make. Often, home sellers conceal defects in their properties. Therefore, it is highly recommended to schedule a home inspection before purchasing a home, as this will help you avoid unexpected expenses later on.

Have a professional home inspector check your house before the warranty expires. Some appliances may show signs of defects 12 or 24 months after being used. We recommend not skipping the home inspections when you are buying a home.

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Failing to read your home warranty contract

It is always essential to read the terms of price, manual labor, or material cost of parts before purchasing any home warranty. The warranty companies may not cover all the peripheral prices mentioned in the contract, like the external structures. It can lead to miscommunication between you and the home warranty company.

If your home warranty plan does not include coverage for specific appliances, you can include add-ons to cover other appliances that you wish.

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Choosing the wrong plan

The market is flooded with many home warranty companies, and a bewildering number of home warranty plans to choose. Such a scenario makes it all the more difficult to select the right plan for your home. For example, a basic home warranty plan can be enough for a relatively new home but an older property may require a comprehensive plan to cover its aging appliances and systems.

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Not researching home warranties carefully

You should read about the home warranty plans from unbiased and unsponsored sources. It will give you an impartial view of the companies without being misled to buy from one in particular. Some companies make tall promises and have misleading marketing promotions. Some may not be stringent in their service contractor onboarding. Hence, before buying a home warranty, it is always important to do your own research to evaluate your needs and costs.

You will thus have a complete picture regarding whether or not you should buy a certain plan.

Parting Note

Purchasing a home warranty can be a good solution for the unexpected repair and replacement expenses of home systems and appliances caused due to regular wear and tear. Having a home warranty brings peace of mind as the service provider will take care of any breakdown of your covered systems or appliances.

However, correctly utilizing your home devices and doing regular checks will reduce the chances of potential repairs.

FREQUENTLY ASKED QUESTIONS (FAQs)

Q.

How to buy a home warranty to help sell your home?

A.

If you are placing your home on the market, you can opt for the seller’s warranty. It helps both you and prospective buyers feel reassured about the state of the property. Alternatively, you can include a buyer’s warranty in the closing deal. You can also get a homeowner’s plan and make it a point to mention its impending transfer to the new owner.

Q.

Is it a good idea to buy home warranty when purchasing a house?

A.

If you’re buying new construction, it may not be required to get a home warranty. Most new homes come equipped with a builder’s warranty. It covers permanent items like concrete floors, electrical work, and plumbing. When you purchase a pre-owned home, you should ask for a home warranty, especially if the home has many aging systems.

Q.

Do any home warranties start immediately?

A.

No, most of the homeowner warranty plans have a waiting period, they don’t start immediately. However, if you purchase a real estate plan, some companies like Cinch Home Services don’t require a waiting period and will start immediately.

Q.

How long do you have to buy a home warranty?

A.

The warranty can be purchased whenever you want, regardless of how old your house is. The length of the warranty varies according to the company and the plans you purchase.

Q.

How much would it cost to buy a year’s worth of home warranty for someone buying a property?

A.

You may get a buyer’s warranty if you plan to buy a home, and it can cost you around $450 to $540 each year.

Q.

Can you purchase a home warranty after closing?

A.

You can purchase a buyer home warranty within 30 days after closing a deal. However, if you purchase it after that time, you will get homeowners’ plans. You can even buy a home warranty years after purchasing a home.

Q.

When purchasing a home, what does the warranty cover?

A.

If you purchase a new home then there will be a builder warranty, it will cover the home’s structural components, like windows, walls, heating, ventilation and air conditioning (HVAC), plumbing, and electrical systems.

But if you buy a home warranty plan, it will typically cover the most significant components of your home system, such as your HVAC, water heater, plumbing, electrical, furnace, and more. It will also cover regular appliances like washers, dryers, refrigerators, and stoves.

Q.

Is there a warranty on home appliances when purchasing a home?

A.

When you purchase a new home, the real estate agent or builder may provide you with a home warranty as a gift to cover home appliances and systems that break down due to normal wear and tear. It is applicable for one year.

Q.

How can I get a cheaper home warranty?

A.

You can get a cheaper home warranty by comparing the premium pricing of different home warranties companies. You can also check out the details of the deductibles, discounts, and add-on options. Take advantage of offers they may have.

Q.

Does the buyer or seller pay for the home warranty?

A.

Buyers or sellers may pay the home warranty depending on the circumstances. Sellers may pay to ensure the buyer doesn’t hold them liable after the closing if something breaks. If the seller does not include one as part of the sale, the buyer may wish to purchase a home warranty to save costs on repairs.

Q.

When purchasing a house in California, do you get homeowners warranty?

A.

When you purchase a home in California, you won’t get a homeowners warranty unless the pre-owned home sale includes it. But if you purchase a newly constructed home, then you might get a builder warranty. In case you want to buy a home warranty afterward, you can do so.

Q.

Do I need a home inspection to buy a home warranty?

A.

A home inspection is not needed, but it is better to have one. This task is a one-time investment that can help you detect any issues or damages to the home system and appliances.

Q.

What’s the difference between a home warranty and home insurance?

A.

A homeowners insurance policy covers people against liabilities incurred due to specific events, such as fire damage, loss of property, etc. In contrast, a home warranty is a service contract that covers the primary home system and appliances that break down due to mechanical damage or wearing out with age. You can learn more about the differences between them to understand how they work complementary to each other.

Q.

How to get a new air conditioner using a home warranty?

A.

When your air conditioner breaks down due to normal wear and tear, you should file a claim on your home warranty. The home warranty company will then decide on repairing or replacing it according to the condition of the air conditioner.

If they can’t resolve the issue, the company will replace it with a functionally equivalent model to the one you currently own. They may do this when the repair cost is as much or more than that of the replacement.

Q.

When can I claim after buying a new home warranty?

A.

You can file claims when the items covered by your home warranty break down. However, each home warranty company has its terms and conditions regarding the claims process. It is recommended that you check the fine print for specific details.

Top home warranty Companies

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