Home Warranty Shopping – Five Questions to Ask
September 14, 2021
Home warranty policies are frequent purchases by homeowners and home sellers. REALTORS® are often involved on either side of the transaction – researching and reviewing policies. Knowing what you are getting is not easy, with much of the fine print and exclusions hidden until after the policy is purchased. Here are some questions to ask and important things to consider when buying or requesting a home warranty policy.
What technicians does the home warranty company use in your area or can you select your own?
Home warranty companies often contract with specific technicians (or companies) in your area to provide service. For a service fee, the technician comes to your house, diagnoses the problem, and repairs (or replaces) the covered item. If the repair companies are not well rated in your area, it may be worth going with a different home warranty policy. Of course, this is easily resolved if you can select the repair company you know and trust.
Does the policy cover multiple units?
Many houses have multiple appliances or units of some kind, but home warranty policies usually only cover one unit in a category (e.g., one fridge). Additional units can easily be added - for an additional cost. Whether it’s two ovens, two fridges, or multiple heating and air conditioning units, you do not want to be stuck paying for a unit you thought was covered. Be sure to add the unit or be aware that the extra unit may not be covered. Keep in mind that some policies reset each year, so your policy may cover one unit one year and the other unit a different year.
What are the caps on costs?
Your policy likely has dollar limits on how much will be paid out for each appliance or unit (e.g., $1600 for an AC compressor). While home warranty companies likely get wholesale (i.e. cheaper) prices on appliances, you may have to pay the overage for nicer appliances or large units. Some policies even set the cap based on the age of the appliance, rather than the repair or replacement cost.
Are any specific brands or grade of appliances excluded?
For whatever reason, some policies exclude specific brands of appliances. Many policies also exclude professional grade appliances. It is always a good idea to know what appliances you have and specifically ask whether any are excluded from coverage. Of course, new appliances are usually covered by the manufacturer’s warranty, so you may be able to pay less if you ask for these appliances to be excluded.
What is the timeframe for a full refund?
With the fine print often revealing unknown details of your new policy, it is important to know if you can cancel and get a full refund if an issue arises. The full refund may come with a small “fee” but better a fee than a percentage of each month remaining on the policy. Being able to cancel also gives you leverage if the fine print does reveal a problem. The company may delete or change the problematic language rather than lose your business.
The best thing to do when purchasing a new policy is to read the home warranty policy when you buy it. Yes, the language is tiny, but you need to make sure that that plumbing blockage the salesperson told you was covered is covered under the contract. A salesperson can tell you one thing, but the company is only obligated by what is in the written contract.