Pro tips for renewing your home warranty
A home warranty is an essential component of the security of your home, as it protects you from overly expensive repair bills. However, most people get the initial policy through their real estate company or through a third-party provider. In other words, your first home warranty will usually come as the result of purchasing a home for the first time. But once the warranty expires, you will need to renew it. This is the time to consider the best home warranty plan for your situation, as you will be the one making the decision this time around. To help you with that, we have prepared a few pro tips for renewing your home warranty. This article will explain what a home warranty is, and serve as your guide in the whole warranty renewal process.
What is a home warranty, exactly?
Basically, a home warranty is a contract between you and the home warranty company that covers various systems and appliances in your home. Whenever a system or appliance breaks down, you will have the possibility to contact the company and have them send someone for repairs/replacement. A home warranty plan usually has a duration of one year. Since a home warranty is quite similar to homeowners insurance, many people are confused about the differences. When it comes to homeowners insurance vs home appliance insurance, the main difference is in the damage that is required to trigger the policy. With homeowners insurance, you are protected from unexpected events (weather damage, fire, etc.) whereas a home warranty protects your appliances and systems from regular wear and tear.
Another key difference is that home warranties have “service fees”. Every home warranty contract clearly states the service fee, which is the amount that the homeowner will pay every time someone needs to be sent in to diagnose the problem. The service fee will cover the entire visit, regardless of its duration.
Differences in home warranty plans
Not every home warranty is the same. Each company has its own policies, coverage limits, deductibles, service fees, etc. Therefore, it is advisable to carefully choose your home warranty provider, depending on your situation. Some providers might be specialized in HVAC systems and will, therefore, offer better coverage rates for them, while others may be specialized in septic system warranty. What that means is that it might not always be the best idea to simply renew the policy that you got with your home. By “shopping around” you may be able to get a much better deal than the one you currently have. And, as is the case with any long-term contracts (year or more), many companies have special “sign-on” deals. It is usually well worth your time to talk to several home warranty companies before deciding on a policy.
That being said, even if you are completely satisfied with your current home warranty plan, you will still want to be careful when it comes to renewing your home warranty. This is the best time to make any necessary changes to the plan, as well as iron out any potential kinks.
Pro tips for renewing your home warranty
Before renewing your home warranty, you will want to do the following:
- Consider your budget
- Consider the age of your home and appliances
- Read the entire home warranty policy
- Customize the home warranty plan
- Consider home warranty add-ons
Of course, you should also consider renewing the home warranty in the first place. For example, if your home is relatively new, and most of the appliances and systems already have a manufacturer’s warranty on them, you might not want to renew the home warranty plan. Furthermore, if you notice that there are numerous home repairs that you can do yourself instead of relying on a home warranty, you might be able to save some money by not renewing it. What you may want to do is go around the home and take a look at all the systems and appliances, noting their age and condition. This will help you decide whether renewing your home warranty is the best option for you at this point in time.
But let’s say that you’ve decided that renewing the plan is the best course of action. Before you do so, you might want to:
Consider your budget before renewing your home warranty
Your home warranty can cover all the systems and appliances in your home or only the select ones. Furthermore, every home warranty policy stipulates that you need to properly maintain your appliances and systems if you want to benefit from its coverage. If you fail to keep up with your maintenance tasks, you will not be able to reap any of the benefits of home warranty plans, simple as that. But what does all of that has to do with your budget?
Your budget will determine how much you need the home warranty in the first place. If you can comfortably repair any damage on your own, you might not need a home warranty plan. The fact of the matter is that purchasing any insurance policy is a sort of a “gamble”, as you never know whether anything will actually break. If your appliances and systems break down, you are getting value from your home warranty plan. Otherwise, you are basically paying for nothing else than peace of mind.
But if your budget simply cannot cope with any large repairs/replacements, then you need something to protect you if any incidents were to occur.
Consider the age of your home and appliances
The fact of the matter is that all appliances and systems in every home will require repairs and replacements after a set period of time. That is why you need to consider the age of both the home itself and any appliances within it before renewing a home warranty policy. Furthermore, if you have been living in the home for a while, you may want to include frequent repairs or replacements that you had to do throughout the years. This will allow you to figure out whether you need an extended kitchen appliance warranty, for example. If you notice that your kitchen appliances are breaking down on a regular basis and that the repairs are higher than the service fees, you may get a lot of “mileage” out of your home warranty.
Lastly, you will want to consider the typical lifetimes of your home’s systems and appliances. The closer an appliance is to its theoretical expiry date, the greater the chance that it will require repairs. Air conditioners, for example, usually last between 8 and 15 years, whereas dishwashers have a 9-year life span on average. Refrigerators usually have a lifespan of 9 to 13 years, microwaves around 9 years, and furnaces and gas stoves can endure between 15 and 25 years.
Read the entire policy
One of the most important aspects of renewing your home warranty is carefully reading about what the policy covers and, more importantly, what it does not cover. The worst thing that can happen is that you purchase a plan thinking that it covers everything you need only to find out about the lack of coverage at the worst possible moment. Reading the home warranty policy in its entirety will also help you avoid home warranty scams. Furthermore, most home warranty policies have limits, exclusions, and unique maintenance requirements. You need to be appraised of all of them before you sign the renewal. Don’t skip this part even if you have had the policy for several years, as it is entirely possible that some details might have changed during that period. Make sure that everything is exactly how you want it to be before signing the contract.
Customize the home warranty plan
Most home warranty plans offer a great deal of customization. For example, you don’t necessarily have to purchase a plan that covers every single appliance in your home, you can get a home warranty for select systems and appliances only. If you have bought a new refrigerator and still have a lengthy manufacturer’s warranty on it, including it in your home warranty plan would be redundant. Or you may want to cover only the five most common appliances to break down. You may not have infinite customizability, however, and you might need to make some concessions here and there. But it is always best to customize the plan before signing the renewal.
Consider home warranty add-ons before renewing your home warranty
Lastly, home warranty companies usually have a number of add-ons to their home warranty policies that you might want to consider. For example, swimming pools are usually not included in basic home warranty plans but you can get coverage for them through an add-on. The same goes for roof coverage, septic systems, etc. If you believe that a particular appliance or system will fail on you soon, it might be best to cover them through a home warranty add-on.
Bonus tip – Continuous coverage
If you don’t want to bother with renewing your home warranty year after year, you can opt for continuous coverage. Many home warranty providers will offer you such an option. When you have continuous coverage, your home warranty plan stays the same all the time and you will never have to go through the renewal process again. And if anything about the policy changes, the company will present the changes to you for review.
For more information on home warranties and the best home warranty companies, browse and explore the Consumer Opinion Guide. We are here to provide you with any and all information you may require to make the best decisions!