Many of the appliances you use every day have a limited lifespan. For example, a typical air conditioning unit lasts around 10 years and a water heater lasts about 15 years. Hence, it’s important to be prepared for the breakdown of these and other important appliances like your refrigerators, dishwasher, and microwave, as they age and wear out with time. You can accomplish this by purchasing Home Repair Insurance.
A home repair insurance policy will provide peace of mind by reducing the expenses of repairs and replacements of appliances and home systems. It is also called a home warranty or a home protection plan.
In this article, we will explain home repair insurance coverage, how much it may cost, and which companies offer the most affordable policy.
Home repair insurance, also known as a home warranty, is a service contract between a homeowner and a home warranty provider. It pays for the replacement or repair of household items that break down due to wear and tear, subject to fulfilment of certain terms and conditions. In return, the customer pays a regular premium, and when they avail of services, a trade service fee as well.
Generally, there are three types of home repair plans: appliances plans, systems plans, and combination plans, based on the categorization of covered items. Some companies offer combined plans with increasing numbers of items for higher premiums.
Home insurance and home repair insurance may sound similar because of their nomenclature but they are totally different from each other. Homeowner’s insurance covers the structural and personal property of the insured and protects the house from damages caused by natural disasters, theft, and other unforeseen circumstances.
Home repair insurance, also known as a home warranty, is a service agreement that provides coverage for the repair or replacement of your household systems and appliances. You should read more about the differences between home warranty and homeowner’s insurance.
Home repair warranty plans provide coverage for the following major home systems and appliances:
In addition to these, you also get an add-on option to include items on your home warranty plans
Home repair insurance includes some exclusions as well, below are a few of them:
Many companies offer coverage on items beyond the non-exhaustive list above.
The cost of home repair insurance depends largely on the coverage plan you choose. For basic coverage, you need to pay a premium of $30- $60 per month and for comprehensive coverage, you have to pay a premium of $55- $100.
However, in addition to the premium, you have to pay a service fee or deductible each time you schedule a service visit with a technician. These fees can range from $50 to $125. Additional factors that can affect the cost are the optional add-ons, the area of residence, and the type of home you have, or any other applicable factors that will be stated in the contract.
You can even get free quotes from our site to check the pricing details and then decide according to your needs and budget.
Home repair insurance usually has a 30-day waiting period before coverage begins. After that, you can file a claim if any covered item stops working, by following these steps:
A home warranty can save the buyer from out-of-pocket expenses due to unexpected breakdowns of major home systems and appliances. Moreover, it may also reduce home maintenance costs in the first year of homeownership, when your finances are already stretched from the recent home purchase.
During the closing process, the seller can be assured that any covered system or appliance will be fixed at a low cost during the sale. A licensed technician will be dispatched to resolve any unforeseen issues. A home warranty makes the property more appealing to buyers as well.
There are numerous home repair insurance companies that offer extensive coverage, and excellent services. To help you make a decision, here is a list of the best home warranty companies.
Discount – 1st-month free + limited roof coverage
Choice Home Warranty is one of the largest home warranty companies and is well known for their vast network of contractors. They offer two plans to their customers – the Basic and Total plans that cover the various critical household systems and appliances like heating systems & ducts, plumbing systems, electrical systems, water heaters, etc. The company doesn’t require home inspections before the coverage begins.
Discount – Get $150 off+ Free 2 Months Coverage
Select Home Warranty is an affordable brand in the home warranty industry and offers coverage that matches the more expensive options. They have a large network of experienced service contractors and also provide multi-year contracts.
Discount – $100 off for multiple properties + Referral Discount ($25 Gift Card)+ NAR Discount of $50
American Home Shield (AHS) is the oldest and among the most trusted companies in the market. They offer three plans that provide comprehensive coverage to your home system and appliances. The company offers higher-than-average coverage caps.
Discounts – $200 off + Free 2 months
ServicePlus Home Warranty is known for their comprehensive coverage plans, fantastic offers, and low service call fees. The company offers three plans that cover 20 critical home systems and appliances. They also have a 90 day repair guarantee on parts.
American Residential Warranty is known for providing quality services and customer support. The company offers four plans that provide coverage for the major home system and appliances. They also have a money-back guarantee if the customers are not satisfied with the service.
It is important to choose a warranty plan that meets the needs of your home. If you want to determine the best plan for your home, you can follow these quick tips.
Prepare a list of the items you want to be covered by the home warranty plan. Start by checking if your home has aging appliances and home systems likely to need repairs.
Research the plans, pricing, and services of companies that match your requirements. You can also read their reviews and ratings at Home Warranty Reviews.
Talk to your family and friends who have purchased home warranties. Their experience from the warranty companies may be able to help you make a decision.
When you have shortlisted the companies, it’s time to request free quotes. You can determine whether your budget fits the plan with the help of the estimates.
When you’ve made a choice, you can proceed with the chosen quote or buy a plan online. You have the option to pay monthly or annually.
In order to help you decide if you should buy home repair insurance, we have listed the pros and cons of getting them.
Home repair insurance can be a good idea to maintain your budget and get access to skilled service contractors. You get peace of mind from the hassle of finding skilled technicians when your expensive devices require repairs or replacements. However, you should consider the above-mentioned factors when purchasing them. Also make sure to read the fine print before signing up for any services, to ensure that you are using your money wisely.
Homeowner’s insurance does not cover repairs of home systems and appliances. Home repair insurance, i.e. home warranty does. Homeowner’s insurance may cover structural repairs, subject to fulfillment of contract terms.
If the damage is caused by the act of nature or god or any accidental event as specified in the homeowner’s insurance plan, the company may cover the replacement of the roof.
If your home has pre-existing conditions, and is in need of repairs, most warranty plans won’t cover it, after the fact. Homeowner’s insurance covers very specific circumstances. If you want coverage over the home systems and appliances suffering regular wear and tear, you might be able to get a home warranty or home repair insurance.
For home insurance, you may not get an option to negotiate the deductible while making an insurance claim. However, some companies may give you an option to choose the premium and deductible costs before making the purchase. Don’t forget to read the fine print of the home warranty while choosing the companies.
Homeowner’s insurance may cover the cost of foundation repair if it was damaged by calamities or accidentally.
Home warranty plans cover the costs of repairs and replacement of septic system problems like septic leaks or sewer line blockage. As long as excluded components are involved in the problem, the home warranty should cover it.
Many home warranty companies give you an option to hire your own service technician for repairs, as long as the technician has been approved by the company before making repairs. This is usually when they can’t find a good technician in your area. However, they mostly have a network of licensed contractors for repairs.
Yes, home warranty companies provide coverage for roof leaks problems. You can know more about the coverage details in the sample contract.
The extended warranty is generally added after the original manufacturer’s warranty has expired in order to cover an item’s repair and sometimes replacement. These warranties can be extended at the original buyers’ request. However, you can consider purchasing a home warranty plan to avoid item-by-item expenditures.
Generally, home warranties don’t cover maintenance unless it is mentioned in the service contract of a company.
You can purchase home protection in the form of a buyer’s home warranty within 30 days after closing a deal. You can buy a home warranty years after purchasing a home but as a homeowner.
Generally, homeowners are responsible for paying the home warranty insurance. However, if it is a part of a closing deal then it is paid by sellers or in some cases, realtors. But if it is a rental property then the tenant is typically responsible for the deductibles.
When you file a claim for devices breaking down due to normal wear and tear, your home repair insurance company decides to repair/replace them according to the condition of the devices. However, if they can’t repair or replace the device then you may get the sum equivalent to the repair cost. You may not be able to choose a payout yourself.
Yes, homeowners insurance provides coverage for a garage door’s repair or replacement if they are damaged due to calamities or by the act of God.
Yes, if you’re not satisfied with the service, you can cancel your home warranty. Most companies allow cancellations within 15-30 days of the purchase. After that, they only refund a prorated amount minus any charges.