home warranty coverage

Home Warranty 101

A home warranty is an annual service plan that can help pay for repairs and replacements of major appliances and mechanical systems in a home. These plans offer extra protection that homeowners insurance, which is limited to coverage of events like fires or theft, does not offer. Home warranties are considered a safety net for homeowners who may not have funds on hand to cover large, unexpected expenses.

Types and Coverage

There are different types of home warranties available for whatever homeowners need. Some plans protect fewer, specific things, while others offer broader, full-service protection. The standard types and the coverage they offer are:

Appliance plans — larger appliances, including refrigerators, washers, dryers, stoves/ovens and dishwashers.

System plans — mechanical systems like electrical, plumbing, heating and cooling.

Combination plans — both major appliances and mechanical systems.

How do home warranties work?

When a system or appliance in your house fails, you contact your home warranty provider, and they send one of their local tradespeople or technicians to assess the situation. If the work needed is covered under your plan, they’ll take care of it. If not, your claim may be denied.

Claim denials are often based on how an appliance or system failed. Warranties work for appliances or systems that had been working properly before purchase of the warranty. So, warranty coverage typically helps in situations in which failure was caused by wear and tear.  

Home warranties also have specific criteria that need to be met before you can use them. It’s important to read the fine print on your contract so you are aware of any restrictions, such as the date coverage begins or whether there are maximum amounts allowed for certain repairs or replacements.

Cost and fees

Some home sellers will buy a home warranty (one year of coverage) and offer it to homebuyers for free. Otherwise, premiums can range between $350 and $650 per year (on the low end). You can opt for more coverage at greater expense. There are also service charges each time you submit a claim. This fee is typically $75 or more per claim.

Who should get one?

First-time homebuyers may want the peace of mind that comes with a home warranty, as surprise repairs can pop up and be financially overwhelming. If you’re a current homeowner and have older, functioning appliances or systems, it may be wise to get warranty coverage. Home warranties are also a good option for those who don’t want to deal with the time or hassle of having to find service technicians or tradespeople themselves, or want to avoid paying out of pocket on expensive repairs or new appliances.

Shopping for a home warranty

If you decide to purchase a home warranty, it’s important to do your research so you can find the right plan for your needs. You can search online to compare home warranty providers in your state based on costs, coverage and restrictions. You may also choose to contact real estate agents or brokers for recommendations. It helps to read reviews on the Better Business Bureau’s website to get more information on warranty providers, as well.

To learn more about home warranties and to get help choosing a plan that fits your needs, contact an Aegis expert. We’ll walk you through the process and provide you a free, no-obligation quote on a home protection plan.

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