What exactly is home warranty insurance?
Home Warranty is like insuring the appliances at your house. When appliances or systems breakdown, the insurance company repairs or replaces the equipment. In most cases, newer homes do not require home warranty, because appliances are not likely to replaced and the total cost of all minor repairs is going to be less than the cost of buying home warranty, in a given year.

Good

• You are buying piece of mind. If a major appliance/system needs to be replaced, someone else pays the bill
• Whenever you need a repair service, you just call home warranty company and pay your flat deductible amount (generally around $50), no matter how many hours it would take to fix the system.
• When you sell the house, the buyer will be happy to know that your appliances are insured, since the warranty will be carried over to the new owner.

Bad

• You will pay a deductible in the range of 50 to 100 dollars, per repair incident
• Most companies do not allow you to report multiple problems under one incident, so you will deductible for each repair. So, if you have a minor plumbing issue and a minor electrical repair the same day, you will pay deductible twice! In some cases you are better off by not involving home warranty company.
• You will pay insurance premium anywhere from 500 to 1000 dollars per year. If you are not likely to need system replacements, you can save money by hiring contractors directly

And the Ugly

• Many consumers have had bad experiences dealing with the claim processing. Insurance companies use some small print clauses to get away without helping you when the project expenses run high. The most common complaint is that the insurance company rejects your claims when they decide that you have not maintained the equipment properly.
• Home warranty companies will always try to repair, not to replace the system. That means you will have to live with the inefficiencies of the old system, plus you keep paying deductibles every time it needs a repair.

Always remember, most of the contracts do not cover system or appliance failures due to lack of maintenance

Best home warranty policy - where is it?
The obvious and most popular question is what is the best home warranty policy available out there? It is the most difficult question to answer as well. Check our reviews section and hopefully you can find the best home warranty policy that meets your budget, suits your needs and still tops the reviews list! If you are unable to make up your mind, read home warranty buyer’s guide

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Posted on March 18th 2007 by HWR Team | Filed under Home Warranty, Rating |