Whether or not you are familiar with home warranties, it is very normal to have questions about them if you are planning on purchasing one. It is no secret that a home warranty is something that many people still don’t have a better understanding of. In fact, some people even confuse it with home insurance.
But in this article, we are going to discuss some of the frequently asked questions about American home warranty insurance. Keep on reading to explore them.
What is a home warranty?
A home warranty is a service contract that is basically designed to protect a home’s appliances and systems. When your appliance or system breaks down due to age or wear and tear, your home warranty company, like First American Home Warranty, will repair it or even replace it if necessary.
How does a home warranty work?
As a homeowner, when you get into a home warranty contract, you will pay a monthly or annual premium based on the amount of coverage you are using. When your appliance stops working, or your system breaks down, you will call your home warranty company.
The company will send a contractor who will assess the damaged appliance or system. If the item is covered under your warranty, the contractor will do the necessary repairs or replace it if necessary. You will only be required to pay a service call fee, which ranges from $50-$125, depending on the home warranty company.
Why do I need a home warranty?
The main aim of purchasing a home warranty is to help protect your budget. Appliances and systems have an expected lifespan. It is also hard to know when exactly they will break down. A home warranty can help homeowners be adequately prepared for such situations. If you are living in an older house and your appliances or systems are approaching their expected lifespan or your appliances frequently break down, purchasing a home warranty would be the best option.
How much does a home warranty cost?
The cost of a home warranty generally depends on the home warranty company as well as the level of coverage. But the plan generally ranges between $300-$700 annually. Homeowners can customize their home warranty plan to cover a wide range of appliances and systems. However, this will cost additional money.
Is there any difference between a home warranty and homeowners insurance?
This is one of the top questions that homeowners generally ask when it comes to a home warranty. And yes, there are differences between these two. First, a home warranty covers the components of systems and appliances in a home, while homeowners’ insurance generally covers the home’s structure and protect it from theft, fire, floods, etc. Homeowners insurance is also mandatory, while a home warranty is optional. However, a home requires both.
What does a home warranty cover?
A home warranty plan covers the repairs and replacements of a home’s major appliances and systems. These include:
- Refrigerator
- Dishwasher
- Washer and dryer
- Oven
- Heating system
- Electrical system
- Air conditioning system
- Etc..
Some of these appliances and systems may not be covered. That’s why before you sign any contract with the home warranty company you need to read the contract to know which items are covered and which ones aren’t. This can help you prevent a scenario where your claim is denied on the basis that the malfunctioning item is not covered under your contract.
What does a home warranty not cover?
As mentioned above, there are certain items that a home warranty may not cover. For instance, if a homeowner purchases a home with a system or appliance that is already malfunctioning, the home warranty company won’t repair or replace it.
This is one of the main reasons why a home warranty usually requires home inspection reports to be filed when purchasing a home warranty plan. If an item is listed in the home inspection report was not repaired or replaced before the coverage begins, that item won’t be eligible for repair or replacement. That’s why homeowners are always advised to fix any problems that arise from the home inspection report before they go ahead and purchase a home warranty plan.
What is a service call fee?
A service call fee is a fee you pay every time a contractor comes to diagnose your appliance or system. The fee generally ranges between $50-$125, depending on the home warranty company. It is worth mentioning that even if your item is not covered under your home warranty contract, you will still have to pay the service call fee as long.
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