How Do I Choose a Home Warranty Company?
By Ann Johnson
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Home buyers are encouraged to purchase a home warranty when buying a house. The buyer or seller can pay for the policy. When the sale is final and something breaks down, such as a water heater, the policy will help to pay for the repair or for item replacement, depending on the coverage. When selecting a home warranty policy, you should consider several factors.
Select a company licensed by the state, and check with the licensing agency about any registered complaints against the company. By following this strategy, you can compare the history of several warranty companies. In California, the California Department of Insurance licenses home warranty companies and provides this information on its website.
Choose a company whose service fees fit your budget. Home warranty policies typically charge a flat service fee for each visit to the home by a repair person. In some instances, a more expensive policy might have a lower service fee. Some consumers may decide to pay a little more up front when purchasing a policy, and then save on the service fees. Other consumers might prefer paying less for the initial policy, and then pay a higher service fee for repairs.
Analyze the policy offered by the company to determine if it covers the specific items you want protected. For example, one company's standard coverage may include refrigerator repairs or replacement, while another company might require a supplement to the policy to cover this item.
Read the fine print of each company's policy to see if there are caps to the policy's coverage.
Warranty Week: Home Warranty Association
Ann Johnson has been a freelance writer since 1995. She previously served as the editor of a community magazine in Southern California and was also an active real-estate agent, specializing in commercial and residential properties. She has a Bachelor of Arts in communications from California State University, Fullerton.
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1 Comparison of Home Warranty Plans
2 How to Compare Home Warranty Companies
3 How Do I Purchase a Home Warranty?
4 What Is Covered Under Homeowners Insurance?