Home warranties are often discussed during the sale of a house. They give buyers peace of mind that their purchase is covered. These plans are useful for people who have just exhausted their savings and are concerned about major expenses. Home warranty companies will cover major expenses such as broken appliances and water damage for an annual fee. However, before purchasing a home warranty for your Texas home, it is best to check the terms and conditions of the plan to be sure that you can live comfortably with the coverage.
1Exclusions in a home warranty plan
When evaluating home warranties, one thing to consider is the number of exclusions. These are clauses that cover only certain types of repairs or appliances. The plan may also limit the amount you can claim if any. For example, your home warranty may not cover the pop-up mechanism on a sink. If depreciation is a significant issue, a repair may be more affordable. Exclusions in-home warranty plans can make a difference if you want to avoid costly repairs.
There are many things that you can’t expect to have covered under a home warranty plan, so make sure you understand what is excluded. Generally, home warranties cover mechanical parts like appliances and systems. For example, if your oven breaks down, it’s not covered under the plan. In other words, you might be able to get a replacement for the oven, but the handle is not covered. On the other hand, if you want to repair a broken dishwasher, this may not be the case, but the heating element is covered.
2Cost of a home warranty plan
The cost of a home warranty plan is an important part of vetting the plan. These plans vary greatly in price depending on how much coverage they provide and where you live. In addition, a home warranty plan’s price varies from one company to the next, depending on the region and zip code. However, there are several factors you can control to keep costs down. Home warranty plans are expensive. Prices usually range from $300 to $900 a year. Some companies offer one-time payments that cover the entire year. Others charge a small break on the total cost. Monthly fees are generally anywhere from twenty to fifty dollars. In addition, many plans allow you to pay a deductible that covers the cost of service calls. The deductible for these plans can be as little as $50 or as much as $150.
3Limitations of a home warranty plan
Home warranties are important, but they’re not the only reasons to invest in one. There are many conditions and limitations. Home warranty companies have to protect themselves from the unethical use of their services. The company you purchase your home warranty plan from should outline those limitations and conditions. Make sure you know the details before you buy. You may find that a home warranty plan is a perfect solution for you, but you should be prepared for any eventuality.
First, you should check whether your plan covers all essential parts of your home. While many warranties cover major systems, others only cover specific parts and appliances. For example, if you live in a cold climate, you might want to add coverage for your sprinkler system. Another thing to look for is plumbing stoppage coverage. Some home warranty plans only cover stoppages caused by root-caused blockages, so you may not be eligible for some repairs.
4Licensing of home warranty companies
Home warranty companies must adhere to certain regulations to protect consumers, including licensing and financial requirements. In many states, the home warranty administrators and obligors must be licensed and have substantial paid-in capital and reserves. For example, the California Department of Insurance requires warranty companies to follow stringent bookkeeping procedures, submit quarterly reports, and allow thorough audits. The Home Protection Act of 1979 also requires home warranty companies to meet certain financial requirements.
Although the NHSCA is working to separate home warranties from insurance, some states do not distinguish between the two. Home warranty companies do not operate as closely regulated as insurance companies, thus carrying greater risks. Homeowners should consider acquiring a home warranty plan to protect their investment despite the risks.