A home warranty is a contract between you and the home warranty company, and you should always read the fine print to make sure the terms and conditions suit you. Most home warranty providers show a sample contract on your website that you can read through before signing up for an annual plan.
The most important things to look for are:
- Limitations. Each home warranty provider caps the amount of money you can claim during your annual contract period. Some providers set an aggregate annual limit for all covered items, usually ranging from $20,000 to $30,000. But most providers set individual limits for each item, typically ranging from $200 to $3,000 per item.
- Exclusions. When you sign up for a home warranty provider, the first thing you'll see is a list of plans with a table showing what is and isn't included. Always check the contract to see what specifically is excluded.
- Workmanship guarantee. Each time a contractor repairs or replaces something in your home, you get a labor and parts guarantee. These guarantees usually last 30 to 90 days. Sometimes, labor and parts are guaranteed separately, e.g. 30 days for labor but 90 days for parts.
- Service hours . The best house warranty companies offer 24/7 service, enabling you to get service from local technicians at all hours of the day or night.
- Area of coverage . While some home warranty providers operate in all 50 states, others only operate in selected states, so always check your provider's areas of coverage before signing up.
- Size of network. Most home warranty providers only accept claims from pre-screened contractors, with networks ranging from 10,000+ contractors for the average provider to 20,000+ contractors for the biggest players.
- Response times. A large contractor network often–but not always–goes hand in hand with quick response times. Before signing up, read third-party and customer reviews for an idea on how quick your selected provider is at responding.
- Home inspection requirement. Most, but not all home warranty companies, don't require a home inspection before signing up, but read the fine print just to be sure.
- Waiting period. Coverage usually begins 30 days after the home warranty company receives your contract fee. Again, read the fine print just to be sure.
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