A home warranty protects homeowners from unexpected expenses that may be required to repair and maintain major home appliances and systems.
It is a good deal for people who are not handy; always busy to handle repairs themselves; and homeowners with expensive tastes in appliances.
You will likely be offered a home warranty while purchasing a new home.
It can help keep your home appliances and systems running without a massive budget, especially if you spent most of your savings buying the house.
However, according to Cinch, there are common mistakes made by homeowners, and if not avoided, they could cause the warranty provider to reject your claim.
Below are some and how to avoid them.
Not thoroughly reading the agreement
A home warranty is a service contract between a homeowner and the warranty service provider. Some homeowners treat the agreement like a receipt from a plumbing company.
Meanwhile, the agreement highlights things covered by the warranty and the conditions for the coverage. The agreement often states that the warranty does not cover repairs or replacement of items covered by other warranties, guarantees or insurance.
Reading the agreement thoroughly before appending your signature will help you determine whether the service is worth it.
It will also help you cover any loopholes the provider might explore to avoid paying your claims.
Settling for the first advertiser
Do not settle for a home warranty company only because you have heard about them most. There is a suitable plan for every home; hence, not all plans are identical.
First, highlight the home appliances and systems you will need the home warranty to cover, then check out different plans offered by various companies.
Once you make a shortlist of companies with suitable plans, the next thing to examine is the price.
It is important to note that cheaper is not always better; likewise, expensive is only sometimes premium.
A careful comparison of these companies and their offer in relation to your budget and need should inform your decision.
Failing to check the company’s reputation and testimonies
When considering a home warranty, only settle for a company that has been around for some time. These companies will likely offer better service, assuming they have learned from past mistakes.
Also, make sure they are reputable and usually settle their claims. A fantastic way to find out is by checking if they are accredited by the Better Business Bureau (BBB) with positive customer reviews.
You can also check online review sites to read what previous customers say about them.
Some home warranty service providers usually post testimonials from previous clients on their websites.
Read them to know if you would want a similar experience or not.
Knowing nothing or little about home warranty and how it works
You might be short-changing yourself if you do not have a good knowledge of home warranty and an understanding of how it works.
A home warranty is designed to protect appliances and systems that are prone to breakdown due to normal wear and tear. These appliances are not expected to be covered by home insurance or a manufacturer’s warranty.
Any homeowner can purchase it irrespective of the age of their home. However, it is most often purchased during a home sale, either by the seller or buyer. Sellers offer it to reassure the buyer about the home. On the other hand, buyers purchase it to protect themselves against unforeseen expenses that might be needed to repair or maintain home appliances and systems.
In addition to the monthly or yearly payment charged by the home warranty company, a set service fee is requested each time a claim is made. On average, this is between $60 and $100.
Below is a summary of how a home warranty works:
- A covered appliance or system breaks down.
- You will need to call your home warranty company to submit a claim.
- The company processes the service request usually within 48 hours.
- Once processed, the company will send a technician to your home.
- The technician checks the fault and recommends the best solution.
- You will be required to pay the service call fee stated in your contract.
- The repair will be done immediately if the technician has all the needed parts; if not, a follow-up appointment will be scheduled to fix the issue.
- Repair or replacement is completed, and you enjoy your appliance like before.
Not asking how the renewal works
Home warranty companies either automatically charge you a renewal fee at the end of your contract or require you to renew it yourself.
If you are trying out a company for the first time, opting for the option whereby you renew yourself is recommended. This will make canceling the contract easier if you do not like their service.
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