Home Warranties 101: Supplemental Protection for Your Home

Home Warranties 101: Supplemental Protection for Your Home

Home warranties protect new homeowners from unexpected expenses and charges. Buying a home is a big investment. Why not protect that investment by adding coverage to protect you from hefty out-of-pocket costs?

Home warranty companies typically offer a variety of plans that partially or fully cover costs for repairs or replacements. There are plenty of home warranties to choose from, like Homeshield of America and other top-rated companies. No matter the level of protection you need, you’re sure to find a plan that works with your budget. 

But what exactly is a home warranty? 

In their most basic form, home warranty plans pay for some or all of the costs associated with fixing or replacing certain things in your home. For example, if your new dishwasher suddenly breaks, a warranty company may cover the cost to replace it under your plan. 

Most home warranties are valid only for a specific period of time, such as one, two or 10 years. Any repairs or replacements that occur after the warranty expires will not be covered by the company. 

The best home warranty company is one that offers the level of protection you need at a price you can afford. If you recently renovated your home with newer, expensive appliances, it may be worth it to purchase a protection plan. Otherwise, you could find yourself dishing out another few thousand dollars if something goes wrong. 

The cost of a home warranty policy varies depending on the company you choose. Likewise, many companies offer an array of warranty options, all of which offer different levels of protection at different prices. The cost of your home warranty may also depend on where you live. 

Home warranties are not the same as homeowners insurance policies. For example, home warranty plans do not typically cover structural components of a home, since most homeowners insurance policies provide this type of protection. Therefore, warranties do not usually cover the following:

  • Roofs
  • Windows
  • Doors
  • Foundation
  • Flooring
  • Walls
  • Solar panels

However, the two plans often work together to provide additional coverage for homomers interested in the highest amount of protection. You can think of a home warranty as a supplemental insurance plan, covering certain repairs and replacements that the insurance policy does not. 

Although there are dozens of home warranty plans out there, many companies cover the major components of your home, including:

  • Electrical systems
  • HVAC (heating, ventilation and air conditioning)
  • Hot water heaters
  • Ductwork
  • Plumbing

If you need coverage for other components of your home, such as appliances, you can typically find a company that offers this extra protection. Appliance coverage may be offered as an add-on, depending on the company you choose. 

Home warranty companies may offer coverage for the following types of appliances:

  • Dishwashers
  • Ovens and cooktops
  • Washers and dryers
  • Refrigerators
  • Garbage disposals
  • Built-in microwaves

Some of the best homeowner warranty companies offer even more coverage for homeowners interested in protecting other parts of their homes. For example, if you have a pool, you may be able to add it to your warranty. Other amenities that may be available for coverage include the following:

  • Jacuzzis and spas
  • Well and septic pumps
  • Guest houses
  • Rental spaces

So, what happens when something that is covered under warranty breaks? 

Home warranty companies tend to follow a similar process for activating warranties. The first step is to file a claim for a repair or replacement, which typically involves calling the company or submitting a claim online to provide details about the incident.

Then, the company sends an approved service provider to your home to inspect the issue, make repairs or order replacements. Depending on the warranty company, you may be responsible for paying a service fee. 

Most home warranty plans have cost limits on the price of each type of replacement. In other words, if your washing machine breaks and needs to be replaced, the cost of the new machine will usually need to fall within a certain price range. 

However, some companies may allow you to replace a system with a higher-end unit if you are willing to pay the difference. For example, if there is a $1,200 limit on the replacement cost of your washing machine and you wish to purchase one that is $1,800, you may be able to pay the $600 difference to receive it. 

Choosing the best home warranty company involves researching your options and comparing prices. Getting a home warranty quote is a great way to estimate your costs and compare companies. 

You can home warranty quotes online with the click of a button. All you need to do is provide some information about your home to receive a custom quote. Since there are so many home warranty companies out there, it is always recommended to receive quotes from multiple companies before settling on a warranty plan. 

While comparing home warranty quotes, be sure to consider the length of the warranty term. Homeshield of America, better known as American Home Shield or AHS, offers 12-month home warranty plans. However, at the end of the 12-month period, policyholders may renew coverage for the following year. 

Also, be sure to compare coverage plans so you know what you are getting. Some home warranties only cover a few components of your home while others may offer supplemental coverage. 

For example, Homechoice Warranty (otherwise known as Choice Home Warranty) offers unique warranty coverage options, such as protection for your garbage disposal, ceiling fans and garage door openers. 

Keep in mind that the most affordable home warranty may only offer basic protection. If you are looking for comprehensive coverage for repairs and replacements on a variety of your home systems, you will likely pay more out of pocket each month to maintain this type of warranty. 

Homeshield of America, for example, offers three tiers of warranty protection plans. The lowest tier is the least expensive warranty of offers the least amount of protection. It is suggested to evaluate your home protection needs before getting quotes so you can get a more accurate picture of your overall investment.