Managing the Costs of Owning a Home With a Home Warranty

Ask a group of friends what their most expensive investments are and they’ll probably tell you about houses. Whether the roofs over their heads or investment properties, those houses are probably the biggest investments they’ve made.

Ask yourself where most of your money goes each year. If you answered anything similar to “my house” then what follows is for you. Let’s talk about saving money.

Most homeowners know that each year they’ll spend money on unplanned repairs. Water heaters will stop heating. Dishwashers will stop washing. Electrical outlets will stop – well you get the picture. What most homeowners don’t know is that out of pocket expenses don’t always have to be so expensive.

There are two ways consumers typically prepare for disasters, both large and small. One is savings and the other is insurance. From health problems to fire and burglary, consumers are well versed in the benefits and shortcomings of both saving for unexpected expenses and buying insurance plans to cover them. Though home warranty contracts, also referred to as home service contracts, are not a form of insurance these instruments do afford the purchaser with some of the same benefits. A home can be a money pit. A home warranty can be a rope to climb out when the pit gets too deep.

What is a home warranty then? Essentially a home warranty is a contract between a homeowner and a company that provides financial coverage and a network of capable repair technicians in order to reduce the headache and cost of repairs of covered items in the home. In the United States there are many such companies and this alone can make choosing a home warranty company a difficult decision.

For a homeowner who has purchased a home service contract in the past this process of shopping companies may be very familiar. But even the most experienced shopper may still need help the next time around. For home service contract shoppers of all experience levels there is one resource that simply cannot be ignored. This first and most important step in the shopping process involves reviews. There are very few legitimate sources of reviews for a product as niche as this but one website has been helping homeowners for the better part of a decade. Home Warranty Reviews dot com is the only place online which focuses solely on collecting consumer reviews and ratings for nearly every home warranty company in the U.S. Purchasing a home service contract without consulting this website would be a bad idea since so many homeowners have chosen to share their experiences there during the last several years.

Once you have read reviews and compared ratings you will be ready to move to the next step. This step involves understanding what you want a home service contract to cover. Not all of the contracts offered to a homeowner are the same. The differences can be great in terms of what is covered and what is not. So before the first quote is requested and well before choosing to make a purchase it is wise to understand why the contract is needed and what needs to be covered by it.

Here are some key questions to consider and ask when speaking with home warranty companies:

Does the age of my home or any of the covered items affect my coverage or the loopholes that could be used to deny coverage of a claim?

Can my contract be denied renewal at the end of my contract period? If so what are the reasons why such a denial of renewal might occur?

Are there limits on how much coverage can be claimed? How many ways do these limits appear in the contract? For example, will there be a limit on the amount that can be claimed for repair of a specific item, a specified period of time or for the life of the contract?

If a contractor is sent to make a repair and the problem occurs again soon after the repair is completed will a new claim request be required?

Is there a fee for each contractor’s visit? If so, how much is the fee?

Is the company regulated in the state the covered home is located in? If so, what is the name of the regulatory entity and how can the status of the company be checked with this entity?

Can the contract be canceled and if so can a refund be expected upon cancellation if the contract was paid in full rather than in monthly installments?

These questions are a good starting point but some of them lead to other questions depending on the response received. For example, a company that states that its contract does have lifetime caps on claims costs would probably need to explain exactly how those caps are structured. And a company that says it does not charge additional service fees for second or subsequent visits by repair technicians for the same problem probably needs to be asked for further clarification regarding guarantees it puts behind its contractor’s work.

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