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First 3 Steps to Evaluating a Home Warranty Plan

Luxury kitchen

Having a home warranty policy is a sound idea, especially for first time home buyers. A home warranty is different from home insurance because a warranty protects common house appliances and home systems such as the electrical system and plumbing. The older your appliances and home systems are, the more a home warranty makes sense.

The key to choosing the right plan is not to be tempted by online ads and promos. Instead, ask friends, families, and neighbors about their experiences with home warranty providers. Or consider reading and comparing plans on to see which one is right for you.


Coverage and Limitations Home warranty page

If the warranty is purchased through a real estate transaction, then it takes effect the day of closing. If not, there is a 30-day waiting period. The policy usually does not cover all appliances and systems in your home. Some warranties don’t cover heating and air conditioner, furnaces, and ovens. You can negotiate the appliances and systems you want to be covered by the warranty.


Premiums and Service Fees

The amount you need to pay monthly or annually and for every service call depends on different factors such as where you live, warranty coverage, and copayment amount. On average, people spend around $600 annually on home warranty. That’s about $50 a month. You can find a policy for $300 a year or $50 a month, but you’ll pay higher for every service call. The average $600 annual expense will cover most major appliances and home systems, including electrical and plumbing.


The home warranty premium amount you choose will directly impact the service call fee. The higher premium you have, the lower the service call fee. If you have a problem with an appliance or home system, you need to co-pay the contractor. This fee can range between $60 and $125.


Repairs and ReplacementsHome repair man with tool box

Most complaints about home warranties stem from the policyholders not understanding the coverage. You need a clear understanding of how the policy works to determine what appliances to repair and replace.

The Takeaway

Be mindful when choosing a home warranty plan. There are plenty of details in writing that you might miss that could impact the way you can use the policy. Get into the details of the contract with your realtor to ensure you get the right coverage that fits your needs. Here at The Young Team, our realtors help home buyers with all of their realty needs.


About the Author

As a Young Team agent, Bobby is focused on providing an extraordinary client experience. His goal is to understand your real estate needs and turn them into reality. With his intimate understanding of the local Ohio housing markets and ability to analyze current real estate trends, Bobby is an expert resource for all your real estate needs. Looking to sell your home? Partner with Bobby to maximize your home sale.