Considerations When Choosing a Home Warranty Policy

Home warranty policies can be a huge asset for many homeowners, yet many still ask, "Are home warranties worth it?" The answer to this question depends on certain situations. Basic policies typically cover most major appliances, plumbing, HVAC systems and electrical systems. However, a premium warranty often covers specialized repairs like hot tubs, swimming pools, garage door openers, doorbells and even ceiling fans. Policies typically range from $250-1200 per year, depending on the coverage desired. When determining whether or not the coverage is worth the expense when buying a home, here are six things to consider.

Lack DIY Skills or Strapped for Cash?

Many homeowners simply don't have the tools or knowledge to accurately diagnose and repair major appliances, electrical issues, and other household implements. This means hiring a contractor to come out each and every time something breaks down, which can add up to big bucks fast. An even more challenging scenario is when a costly device such as a refrigerator or washer must be replaced. However, with a home warranty in place, homeowners typically will only pay a small deductible for covered repairs and replacements. This means big savings overall.

How Old are Home Appliances and Implements?

Perform an inventory of the items that would typically qualify under a home warranty. This involves estimating their age and how much a replacement would cost. One can help determine how much longer the unit will last by reading user reviews and doing a little online research concerning the make and model. If it seems like a breakdown of one or more major home implements is impending, the benefits of a home warranty may be well worth the investment in your North East Calgary home.

Selling the Home is in the Plans

Home warranties serve two benefits for sellers. One, homeowners can use it to repair or replace any old or broken items or systems before putting the home on the market. Second, a home warranty adds value and appeal on the buyer's market, and may policies will extend coverage periods during the time the home is on the market. In certain Canadian Provinces, home warranties are mandatory in certain types of loan situations, so sellers should seriously consider looking further into policies.

Home Warranty Companies Choose Service Providers

Typically, home warranty providers work with certain contractors and decide who's coming to the home for service. Busy homeowners may enjoy not having to call around for estimates and reliable repair services. However, those who have a favorite company or handyman might opt to pass on a warranty for that reason, but this means they'll have to pay all of the out-of-picket expenses.

If It's Already Broken, a Warranty Won't Cover It

Thinking that all those broken appliances or those systems that have been slowly breaking down will be resolved with a home warranty? Think again. Items with pre-existing conditions or issues don't qualify under home warranty contracts. If a repair provider comes out and suspects this is the case, they will deny the claim. Some companies even request to see pre-closing inspections to determine if any defects were noted at that time to prove their reasoning.

How To Shop For A Home Warranty

Shopping for a home warranty is much easier today than it has ever been in the past. You may be able to sign up directly from a company's website. It may not always be the best idea, however.

• First, check out what home warranty programs cover your particular area. Search online for companies that serve your area, then contact each firm directly to make certain they provide service to your address.
• Next, check online reviews to see what others have to say about the programs. However, take those with a grain of salt — remember that unhappy customers are more likely to review a firm than a happy customer and that some of the glowing reviews could be less-than-legitimate.
• Finally, contact any firm that interests you directly and talk to a representative before signing a contract. You can get a much better idea what to expect terms of customer service.

After you've gone through these steps, you should have a good idea what firm or firms will suit you best. Then, it comes down to comparing prices and seeing who can give you the best value for your money.

Carefully Read the Contract

Be sure to look for policies that state "repair or replace" in the contract, which means that if an appliance or system cannot be repaired, that the company will replace it. Avoid home warranties that have an "obsolete parts" clause that can allow the company to deny coverage if parts are unavailable or hard to replace.

Homeowners with questions concerning the benefits of home warranties or how to choose the right one should contact a real estate professional for expert guidance.