A home warranty is supposed to make your living space hassle-free. It is crucial to invest in a home warranty because it keeps your mind free from all the anxiety that stems from unprecedented repair costs. Most people confuse home warranty with homeowner’s insurance, so you must be clear with the terminology before making a decision.
A home warranty covers all the damage that occurs within your home. That is to say that a home warranty automatically covers all the mechanical repairs. Homeowner’s insurance, on the other hand, imposes a liability on the mortgagor to protect your financial stake in the property.
A homeowner’s insurance covers all the damage in the event of an unforeseen calamity such as fire, flood, tornado, hurricane, etc. Once you have made the decision to buy a home warranty, here are the five questions you can ask to protect your future interests.
What does the home warranty cover?
Insurance companies have a general plan where they cover most of the mechanical repairs. Such plans are aimed at people who don’t understand the technicalities of a warranty. Therefore, always ask for a customized plan that caters to your needs specifically.
Before investing in a home warranty plan, make a list of things that need extensive coverage. You must keep in mind that appliances coverage is only offered in the event of general wear and tear and not accidental misuse. You can follow these three rules when deciding on things you want to be covered:
- Include things are at the end of their lifespan. However, such things must be well-maintained because the warranty doesn’t cover pre-recorded damage.
- Include things that are difficult to repair and expensive to replace, such as your air conditioning system.
- Lastly, take note of things that are necessary to ensure a comfortable living.
What are the limits and exclusions of the home warranty?
Every insurance plan lays down some limits and exclusions of the home warranty. The exclusions are on certain parts of the house that are not covered in the repair cost, whereas the limit is on the expense.
This means that the plan will provide a cap on the repair cost that the company will be liable to pay, whereas any additional cost will be borne by the customer.
The best choice for home warranty is a plan that imposes minimum restrictions on the repairs and replacements. Some companies mention specific appliances and areas that will not be covered under the plan. Therefore, ensure that you read all the limits and exclusions carefully and weigh them against the price you will pay for the premium.
What is the pricing for a home warranty?
The price of a home warranty depends on a few factors such as coverage, house size, loss history, company policies, etc. If you are opting for a customized plan, you may have a completely different premium to pay as compared to the general plans.
Usually, a typical home warranty will cost you somewhere between $200-$600. Additionally, you will be required to pay a one-time service charge that usually costs $75.
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