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5 Questions To Ask When Comparing Home Warranties

Whether you’re buying a new home or preparing to sell, purchasing a home warranty is a common strategy to protect your investment by covering the cost to repair or replace major systems and appliances.

Once you understand the types of home warranties available—including systems, appliances, and combination coverage—you’ll need to compare home warranty options and decide on the best company that meets your needs.

The pros at Modernize can help connect with trusted companies in your area. But before you choose a provider, it’s important to understand what you should ask these businesses. In addition to knowing what warranty plans cover, here are five questions to consider when comparing and selecting a home warranty company:

Table of Contents

1. How quickly are repairs completed?

One of the many conveniences of having a home warranty is the quick turnaround time to have a system or appliance repaired or replaced. Ask your potential home warranty company the average time it takes for service calls to be executed and work to be completed. 

Some repairs might be a higher priority than others. For example, a broken stove might be inconvenient, but a nonworking A/C system during summer can be unsafe. Ask the company if they have emergency services available and, if so, what qualifies as an emergency, what is the timeframe, and are there any additional costs accrued?

2. What is the homeowner responsible for?

Regardless of the home warranty company, homeowners are typically responsible for two costs: A yearly premium and service call fees.

  • Premiums are the base rate for having coverage and can range from $400–$600, on average. Most companies offer the option to pay over time with monthly payments.
  • Service fees are what you’ll pay when a claim is made and typically range from $75-$125. When inquiring about service fees, it’s important to know if you’ll be responsible for repeat fees—for example, if an HVAC system requires multiple repairs, how many service fees will be charged?

Home warranty companies might also require a home inspection or maintenance records before coverage can begin and likely require manufacturer maintenance plans be properly followed.

Understanding what is required of you will help you limit out-of-pocket expenses and save headaches when making a claim.

3. What are the limits and exclusions of the coverage?

As you compare your home warranty options, remember that even the best providers include certain exclusions and limitations. Understanding these before you sign a contract can help you avoid any surprise cost gaps that might arise when making a claim.

Home warranty exclusions are specific parts, items, or events that are not covered. For example, a warranty covering a home’s electrical system might not cover repairs to a security system’s wiring. While limits are the amount the company will pay up to for a specific item or for all claims within a set timeframe. Everything beyond these limits is the responsibility of the homeowner to pay.

4. Who are the company’s contractors?

It’s important to know that home warranty companies work with select local contractors and businesses to conduct service calls and complete the required repairs.

When selecting a home warranty company, you’ll want to know how their contractors are vetted and what local or state licenses and certifications they possess. You should also discuss any safety nets or procedures should you be unsatisfied with the work performed.

5. How do I terminate or transfer coverage?

If you’re looking to bring your home to market, or if you simply decide a home warranty is no longer necessary, knowing a company’s termination policy is vital. 

Most companies will allow you to transfer coverage to buyers for, as well as terminate an existing contract. Ask about any additional fees either of these scenarios could incur and the process for transferring in the event of sale. For sellers, it’s also worth knowing if you can renew early as an incentive to potential buyers. 

Next Steps

The pros at Modernize can work with you to understand your needs and quickly connect you with a trusted home warranty provider in your area. Buying a home or dealing with untimely repairs can be stressful. But selecting a home warranty company doesn’t have to be. Understanding the ins-and-outs of available plans and what different companies can offer you will help you select the best company to protect your investment.

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