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Home /  Home Owners Insurance / 7 Things Every Homeowner Should Consider Before Buying A Home Warranty
last_updated_date Last updated: March 17, 2021

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7 Things Every Homeowner Should Consider Before Buying A Home Warranty

PUBLISHED: September 13, 2017 6 MINS READ

Let’s say your AC decides to let you down on a random hot summer day. Don’t get it wrong! It’s served you well for all these years. But it still irks a bit knowing you’ll have to shell out for a brand new one. This is where a warranty saves your day. Haven’t you heard about it? You probably have one. But we bet you’re not sure what it really means to have a home warranty. Let’s break it down.

do I need a home warranty

1. Home Insurance vs Home Warranty

A common mistake is to confuse home insurance with a home warranty. There’s a huge difference between the two. Insurance keeps your home safe against any liability (fire, hail, property crimes or even physical harm). On the other hand, a home warranty covers specific components within a home. These include repair or replacement of an appliance, any plumbing, and electrical problems. The appliances you live with – need warranties.

2. Do You Need a Home Warranty?

This is the first thing we ask ourselves after we’ve figured out what it’s really about. This really depends on you as an individual. Are you good with home repairs? Are you a DIY kind of a person? Here’s how it works. For a nominal initial fee, you can make a warranty claim for that particular appliance. With this warranty claim, it will either be replaced or fixed for no further pay. Let’s say you’ve spent $300 on a new heater, without having to pay for installation. At this point, you’re probably not thinking ahead. Not with the heater, not with anything else. If you are physically capacitated, have an above average busy work life, have a lot of kids in the home, you need a home warranty, period. Think of it as buying yourself some peace to the mind.

Further Reading – Are Home Warranties Worth It?

3. The Home Maintenance Calculator

A home maintenance calculator is a tool that helps you calculate the cost of maintaining all your household appliances depending on their age. There are several sites out there that offer different kinds of home maintenance calculators. Essentially, they’re all for the same purpose and take into account different factors to help calculate the rough cost of maintaining your home. The tools are pretty user-friendly and give you a clear indicator of whether or not it’s time for you to get a home warranty immediately.

are home warranties worth it

4. Checklist for Home Warranty: What Do You Need?

This checklist will help you select the best warranty based on your needs, the value and benefit derived and other important points you need to consider before buying a home warranty:

  • Ideally, most basic coverages often takes care of all major home appliances, including your AC, fridge, and washing machine. If you opt for a better coverage or an upgraded plan, then the number of items in your coverage will be more.
  • Time period and renewal post expiry: Most home warranty providers have a 12-month system, but there are options to opt for a longer period of time. If you are a new home buyer, chances are, you’re pretty convinced about the necessity of a home warranty. Most homeowners find themselves thinking twice about spending on warranty after residing in their homes for a good year or so. But the older your home gets, the need for warranty only get’s stronger. Your warranty provider will send you reminders and easy ways of renewing your home warranty. This is usually done months before the expiry, to give you enough time to renew.
  • Warranty providers are smart. They understand the life expectancy of your appliances quite well. Which is why they design their offers in a way that is almost always quite attractive at the first and then rise as the years go by. Costs are derived in different ways- based on either the area coverage of your home or on a combination of appliances etc. Depending on your provider, an annual premium could range anywhere between $250 to $600 from a time period varying anywhere between 12 months to up to 10 years. Emergency visits and service calls are a couple of things that may or may not be included in a home warranty package.
  • Home Inspection isn’t a compulsion, however, the appliances should be properly installed and maintained/serviced on a regular basis before applying for warranty.
  • Use a home maintenance calculator (explained previously) to calculate and evaluate warranties offered by different warranty companies that suit your needs and requirements. Some companies offer customized coverage (you can select which appliances you want to be covered by warranty).
  • Home Warranty adds value to a property if you decide to sell your home. As long as your location permits it, any warranty you have paid for will get transferred to the new buyer. In many cases, having a warranty on your appliances is added value to a potential buyer who doesn’t have to go through the trouble. The buyer will also be able to renew the warranty.

5. Switching Home Warranty Companies

The following points need to be kept in mind when switching from one home warranty company to another:

A) Running Offers & Customizations

Here’s what some of the most trusted, renowned home warranty providers have to offer:

  • American Home Shield, or AHS: This company gives you a choice to pick a customizable plan based on coverage starting from $31.99 per month and going up. There’s also the option to lower monthly premiums and opt for a higher service fee.
  • The Home Service Club: The company being fairly new offers warranty for more non-mainstream appliances and services such as whirlpool tubs and gas leaks. Though it is not as customizable as AHS, it does offer two solid pre-built plans.
  • America’s 1st Choice Home Club: The stand out factor of AHC is that, as long as you’re with the plan, any appliance that requires regular repairs will be taken care of. There is no limited time frame and no extra service charge per repair. America’s 1st Choice Home Club does, however, need help with customer care.
  • First American Home Warranty: Though not offering unique service, this company has remained popular for its standard plans. Basic plan starts at $21 per month while premium plans at $41 a month. If you decide to pay for the entire year upfront, it lowers the monthly costs even more!

B) Attractive Policies of the Company

Home warranty companies have attractive policies that go well with their plans as well. Auto renewal is one such obvious policy that many companies offer, ensuring they have long term customers. Better, cheaper plans are offered for longer years. This also keeps homeowners from swapping companies. Other policies include the number of fixes per year, return policies for appliances (usually between 30 days to 90 days) and much more.

C) Customer Service is Important

Home appliances breaking down could literally put a stop to your everyday life. They may even be dangerous in some cases. There are established bodies that rate home warranty providing companies with a rating or grade or scale to better credit the different features of such companies. Grading customer care service is one of them.

Home appliances breaking down could literally put a stop to your everyday life. They may even be dangerous in some cases. There are established bodies that rate home warranty providing companies with a rating or grade or scale to better credit the different features of such companies. Grading customer care service is one of them.

AHS has the best rating for customer care services with a consistent B average on Angie’s list. Things aren’t looking great for Home Service Club, it’s been averaging on C+ by the BBB (Better Business Bureau) with regular customer complaints on not being able to get responses. America’s 1st Home has been getting mixed reviews as well. BBB giving it a B while Angie’s list has given it a disappointed D for customer service. For some companies like First American Home warranty, there is an issue with the website quote by itself, and it’s preferable to get a phone quote by directly speaking to customer care.

D) Customization Offered

Thankfully, warranty companies have truly understood that every customer is different. Most companies offer a wide range of standard plans as well as customizable offers for all kinds of homeowners. Customizations are available with respect to time periods, area coverage, the number of appliances, mode of payment, time of payment and much more.

E) Restriction on Selecting the Contractor 

The homeowner usually has no control over the contractor assigned to carry through the work. It’s completely left to the warranty company. There are several delays and miscommunication involved due to the fact that the contractor hired is a third party who has been employed by the warranty company. This inclusion of a third-party complicates the entire process.

The homeowner usually has no control over the contractor assigned to carry through the work. It’s completely left to the warranty company. There are several delays and miscommunication involved due to the fact that the contractor hired is a third party who has been employed by the warranty company. This inclusion of a third-party complicates the entire process.

6. Cautions

Some cautions homeowners need to have or consider while buying a home warranty or while switching home warranty companies are:

  • A home warranty is NOT a reimbursement system. A home warranty provider will never pay you back for any money you’ve spent on repairs of replacements. This could be work done through an external or out of the warranty plan.
  • The term ‘maintenance’ is quite perspective in many ways. Most companies claim to have no role to play with appliances that are not ‘maintained properly’. This is highly dependant on the mechanics that come in to inspect the appliance once a complaint is made. In most cases, disputes arise when there is a clear conflict between the client and the mechanic or the company itself. This leads to loss of money and trust with the very concept of home warranties.
  • Contractors through home warranty services usually take longer than private service companies. This is usually because of two reasons. First, the contractors for the repairs are usually roped in by the warranty company on per job basis, as and when the demand rises. This delays the process. Secondly, the parts and resources required in fixing the appliance are usually bought in bulk with the intention to cut buying costs to lower than available retail prices. So in cases where there is a bigger than average fix required, obtaining the repair parts could take even longer. This leaves clients with having to bear with the broken appliance for an undesirable period of time.
  • Pre-existing problems or conditions should be considered as well. Inspection is not mandatory while opting for a warranty plan. This leaves no room for home warranty companies to have a benchmark on the current state of the appliances while payment for the plan. Therefore, the most common feedback that clients have is that they are blamed for having an appliance that had a problem before opting for a warranty on the appliance.
  • Lack of genuine concern: Warranty companies usually push for the last strands, especially with your big appliances. In most cases, appliances are better off being replaced. But some companies try to fix than replace it to cut costs.  

Further reading: What you should know about home warranty coverage

7. Home Warranty Reviews: Importance and Need provides information on home warranty companies, ratings, and reviews. Here are some reviews on some of the most popular companies that we’ve picked out. These reviews will help any homeowner identify the home warranty company best suited to his or her needs.

  1. American Home Shield (AHS): Also rated 2017’s top pick. Nationwide coverage. BBB rating – ‘B’. Premium: $249 to $500+.
    • Review by Patricia, LA – 5 stars – ‘Customer service not the best. Could be better. Each contractor sent out did what they were required. I never paid more than my deductible for any service received. I’ll keep the policy going until I think it’s not worth it.’
    • Review by Toddparish, Tucson, AZ – 1 star – ‘Though my contract clearly spells out that my refrigerator is warrantied, they did not load it in their computer system. though it’s on my paper signed copy they have delayed days of repairs while they try to figure out their technical problems. No one has called me. I have waited hours on hold. My food spoiled.’
    • Review by Virginia Mccarthy, Buffalo – NY – 5 stars – ‘I was very pleased with the service and the time it took the service man to come out. The service man was very nice. He asked me if he should take off his shoes.’
  1. First American Home Warranty: Also rated 2017’s Top Editors Pick. Nationwide coverage. BBB rating – ‘B’. Premium: $288 to $468.
    • Sharon Wichita – KS – 5 stars – ‘As a first time home owner, I know I saved thousands of dollars, received quick customer service, and excellent repair service with First American Home Buyers. I am so glad I was referred to this company and will continue to use them as well as refer them to others.’
    • Clarence – Clintan, MS – 5 stars – Great company! Great price! Low service fee! Professional contractors! I’ve never had a bad experience!
    • Ali Arbab, GA – 5 stars – Great company! Great price! Low service fee! Professional contractors! I’ve never had a bad experience!
  2. Landmark Home Warranty: Coverage Area- Arizona, Idaho, Oregon, Texas, Utah, Nevada. BBB rating – ‘A’. Premium: $410 to $660
    • Review by Brian, TX – 4 stars – ‘Repair was handled completely and correctly. Communication from the claims agent could have been better. Overall excellent service and worth the cost of the policy.’
    • Review by Landmark peoria, AZ – 1 star – ‘Worst company EVER they don’t contract out to good companies we need our air fixed it’s been over a week still not fixed so rude don’t really go above what they have to for service calls if people don’t know what is wrong with it well it isn’t going to get fixed cause they do the bare minimum to fix things! I strongly suggest going with another company!!!!!!!’
    • Review by Glen Westvalley, UT – 5 stars – ‘Called friday morning about bad water heater. Couldn’t find a contractor to come out before Monday, but did make extra effort to find someone. Contractor that was dispatched was very good at their job, and did a great job to communicate and receive input. Water heater was replaced monday morning, quick and efficient.’
  3. Select Home Warranty: Coverage: Nationwide. BBB rating – ‘B’. Premium: $299 to $499.
    • Review by Deanna, Mo – 5 stars – ‘Everything went exceptionally well with the contractor when I filed a claim with SHW concerning my dryer. He called me in advance and let me know he was on his way. Then he came in, repaired it and it’s been outstanding since the repair.’
    • Review by Yanet, Ga – 1 star – ‘’Print read their terms. They do not cover labor on any repairs and make you have three years of records to approve a repair. Even if you just purchased the home. Plus terrible customer service and communication.’
    • Yehdida, TX. – 5 stars – ‘I was very pleased with the fast response to our service request and the technician was right on time. He diagnosed and repaired the problem very quickly. I really appreciate being able to submit service requests online without having to navigate through a call center system.’
  4. Choice Home Warranty: Coverage: Nationwide. BBB rating – ‘B-’. Premium: $370 to $450.
    • Review by Sharon, TX – 5 stars – ‘Two months after I purchased my warranty, the fan on our cooktop wouldn’t turn on. I called for service and that very same day I received a phone call from the repair company to schedule an appointment. The part took 3 days to arrive so, within a week, my cooktop fan was up and running again. Thank you to Choice Warranty.’
    • Review by Amy, OH – 1 star – ‘Please allow me to save you some serious money. DO NOT BUY CHOICE HOME WARRANTY. After a year run around we finally were told today that they will not cover a replacement of a pool pump. After very deceiving word play by everyone I spoke to, they won’t replace or pay a dime of it. Save your money folks. Save your time, save your energy and save your sanity. DO NOT BUY THIS COVERAGE.’
    • Bernardo, AZ – 5 stars – ‘They have kept their word about the promised services. In the last 3 years, I have done few claims and most of them have been covered as promised. I truly recommend this company, I understand that sometimes they get pretty busy (like in a mid of summer/heatwave when we all calling for AC services) but for most their service is pretty good.’
  5. America’s Preferred Home Warranty: Nationwide. BBB rating – ‘A+’. Premium: $499 Coverage Area: Alaska, Alabama, Arizona, Arkansas, Colorado, Dist. of Columbia, Delaware, Georgia, Iowa, Idaho, Indiana, Kansas, Kentucky, Louisiana, Maine, Michigan, Minnesota, Missouri, Mississippi, North Carolina, Nebraska, Ohio, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, West Virginia, Oregon, Maryland
    • Review by Carol – 3 stars – ‘I was taken ~ what??? washer not included. What only a partial of furnish. I would never buy again! For the price I could have bought a washer and dryer with a warranty. First time (furnace) my agent was blamed for me being misinformed so….’
    • Review by Andrea – 5 stars – ‘As a Real Estate agent it is important to have a Home Warranty that I have confidence in to recommend to sellers and buyers . APHW has been the only Home Warranty company that has consistently superior customer service with my clients. The contract ordering process for my sellers and buyers is easy.’
    • Review by Susan, OH – 5 stars – ‘I have been very happy with America’s Preferred Home Warranty. They are always available when I need to reach them and it’s very easy to file a claim. The whole process is very simple.They allow me to contact any contractor I want. All of the staff I have spoken to on the phone have been professional and very helpful. I could not be happier with APHW and will recommend them to anyone looking for a home warranty company. I’ve dealt with a terrible home warranty company before and now know a great one when I see it and it’s APHW!’

Now that you have an idea how to go about getting a home warranty, you can make the purchase decision yourself after taking the factors listed above into consideration. Hence, you can also account for any personalized needs you may have. Track all the information on home warranties in the US right here. Find more reviews on home warranty companies that you are interested to opt for.

If you have any questions regarding buying a home warranty, make sure to use the comments section. We are more than happy to respond to your queries. The best companies are acknowledged every year and you should take notice of those home warranty companies that have been awarded.

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