How To Choose The Best Home Warranty

If you are a retired homeowner, a home warranty is something you should seriously consider. Home warranties can save you a lot of money and protect you from unexpected expenses that can seriously impact your budget and put stress on your financial plans.

What is a Home Warranty?

Similar to an extended car warranty, a home warranty is essentially a type of service contract for your home. In practice, this means the homeowner pays premiums monthly or annually and, in exchange, is covered against costly and unexpected repairs.

Repair with Home Warranty

Contrary to what many people think, a home warranty is not an insurance policy for your home, so you can’t purchase one from an insurance company. Instead, such service contracts are purchased from dedicated home warranty companies.

Different home warranty agreements cover different types of repairs. Still, most provide coverage for the cost of repairing or replacing things like electrical wiring and electric systems, plumbing, large kitchen appliances, and heating systems.

Structure components of your home, such as windows and doors, typically aren’t covered by home warranties, though there are some exceptions.

Before we get to the nitty-gritty of home warranties, we’d like to introduce you to a great home warranty provider. If you want to skip down to the deep dive on home warranties, click here.

choice home warranty
Choice Home Warranty
2 How To Choose The Best Home Warranty

Choice Home Warranty is a company that offers home coverage for your home appliances and systems. As long as your home is in good condition when the contract begins, your appliances and systems will be covered in the event of a breakdown. When you submit a claim to the company, they will send a technician to help. The network of contractors spans the entire United States and is comprised of more than 15,000 people. There is a hotline available 24/7, so you’ll even be covered if there’s an emergency in the middle of the night. If you’re a homeowner who wants the same peace of mind that comes from renting, this is a good choice. You get access to contractors without extra fees, just like a tenant would.

😀 PROS😡 CONS
More than 3,000,000 service requests have been handledGetting claims paid can be a hassle
More than 1,000,000 homes have been coveredBasic plan doesn’t cover everything
There are over 15,000 nationwide contractors in the networkSome items are only covered optionally

The pricing varies depending on the plan you buy. The Basic plan covers most major home aspects. It will provide coverage for your heating, electric, plumbing, furnace, bathtub, most kitchen appliances, ceiling fans, and ductwork. The Total plan also covers your air conditioning, washer and dryer, and refrigerator. That makes it a good choice for people who need frequent appliance maintenance. You can also get optional add-ons depending on your needs. Choice Home Warranty bundles service and repair costs into the same package, unlike other home warranty options. You’ll receive a specific quote based on the size of your home and your needs. Some options start at as little as one dollar per day. With the Total plan, you will also have repairs and replacements done for your HVAC system.

The pricing includes:

  • Repairs and replacement for covered items, at a normal service fee
  • Different plans and optional add-ons that can be scaled for your budget
  • Prices that start as low as 1 dollar per day

Choice Home Warranty is a unique company that combines service and repair costs. Most other companies charge separate fees for repairs and contractor services. The company has a 24/7 hotline for emergency claims, and there are more than 15,000 nationwide contractors in the network. The basic plan covers most appliances and systems, including your electrical and plumbing. The total plan will also cover your washer and dryer, refrigerator, and air conditioning. You can add on coverage for your sump pump, swimming pool, central vac, septic system, and standalone freezer or second fridge. There’s also the option for limited roof leakage coverage.

The features include:

  • 24/7 access to a network of thousands of contractors
  • Optional add-ons for pools, septic systems, sump pumps, and other appliances
  • Basic plan that covers most home systems and appliances

How Much Do Home Warranties Cost?

Home warranties usually cost between $200 and $800 per year, and you may also be charged a service call fee whenever something needs to be repaired or replaced. However, this fee is usually just a fraction of the cost of the repair work.

The amount you’ll be charged for your home warranty mainly depends on your property’s size and value, plus what type of coverage you want. Home warranties that cover more components and items are considerably more expensive than less comprehensive home warranties.

Home Warranty Pros

There are many benefits of buying a home warranty, including, quite simply, the peace of mind that comes with knowing you won’t have to fork out your hard-earned money on costly repairs.

Furthermore, unlike with a home insurance policy where you have to find contractors and mechanics yourself and deal with them before filing a claim and getting reimbursed, the home warranty company handles all of this for you (they sometimes even have their own in-house repairmen and technicians.)

It can be especially helpful for Baby Boomers and older homeowners. For some, it can be a hassle having to look up contractors online, particularly if the repair work is needed urgently (for example, if the heating has stopped working.)

Home Warranty Cons

Home warranties can be a great way to limit your financial exposure for potentially costly home repair bills and give you peace of mind, but they aren’t without their drawbacks.

When considering buying a home warranty, homeowners’ biggest worry is spending hundreds of dollars per year, only never to need to use the service contract. But, for some, the peace of mind provided is still worth it, even if the outcome leaves them with a net financial loss.

Another potential drawback is the home warranty company shirking its responsibilities and challenging your claim. This concern shouldn’t be an issue if you use a trusted and highly rated provider, like the ones we’ve recommended, but it’s nevertheless still something you should be aware of.

Finally, it’s important to remember that there are quite a few types of damage that legitimately aren’t covered by most home warranties. As mentioned, this includes damage to structural components of your house (windows and doors, for example), but there are many other instances where a home warranty won’t be valid.

For example, if an appliance is damaged due to a power surge, it’s unlikely a home warranty will cover the cost of repairing or replacing it, so you’ll have to foot the bill yourself.

Types of Home Warranties

There are several different types of home warranties, each for various property types and types of owners.
Some of the most common types of home warranties include:
Seller’s Warranties

Seller’s warranties are purchased by homeowners who are looking to sell their property. This way, they are protected against covering the cost of repairs to the property while it’s on the market.

In some cases, the home warranty will be transferred to the buyer once the sale is finalized.

Homebuyer Warranties

A homebuyer warranty is effectively a service contract that becomes valid on a person purchasing a new home. It’s a great way to provide new homebuyers with immediate coverage without the risk of them paying premiums towards the protection before they actually own the property.

Homeowner’s Warranties

A homeowner’s warranty is for someone who’s currently living in a property and hasn’t recently moved in, nor are they looking to move out in the near future.

New Build Home Warranties

New construction home warranties offer more protection than standard warranties, and they are exclusively offered for newly built houses. Such home warranties usually cover many integral and expensive to repair elements of a property, including its foundation and some other structural components.

Home Warranties For Rentals

This type of home warranty is exclusively for rentals, and a landlord, not the tenant, usually purchase them.

Many landlords utilize home warranties, as they make life much easier for them when it comes to organizing repairs for a property they own, while, of course, protecting their wallet against costly damage incurred while a tenant is living in their property.

Mobile Home Warranties

These home warranties are for mobile homes and provide coverage for the types of appliances in such homes and other elements of such properties.

Finding the Best Home Warranty For You

It is easy to get confused when looking for a home warranty, but adopting a systematic approach can simplify the process and help you make a better decision.

Decide How Much Coverage You Need

You should start by thinking about how much coverage you want and what type of home warranty is best suited to your homeownership situation. You don’t need to make a final decision now. Still, it’s good to narrow down your options so you can apply for quotes and shop around without being overwhelmed with unnecessary information and opportunities which aren’t suitable for you.

Consider Your Budget

A home warranty is quite an expensive purchase, and, as it’s not something you absolutely must buy, it’s worth considering whether or not you can afford one, and how much you’re willing to spend. This will save you from spending a lot of time researching and considering home warranties, only to realize it’s too expensive for you at the moment.

Shop Around

Now that you’re armed with a budget to work to and know what type of cover you’re after, you can begin to apply for quotes and shop around. If money is tight, it’s probably best to focus on cost and finding the cheapest deal, but make sure the home warranty still offers a good coverage level and is from a trusted and reliable home warranty company.

Review and Finalize

Once you’ve found a home warranty you’re happy with, be sure to double-check everything and ask any questions you may have to make sure you’re crystal clear on what’s covered, who will source the repairmen, and precisely what fees you will have to pay, among other things.

If, for any reason, you start to feel that it may not be the best home warranty for you, feel free to go back to the previous step and get more quotes until you find one that’s within your budget and offers the desired amount of coverage.

Should I Buy a Home Warranty?

As mentioned, home warranties aren’t an essential purchase, but they can save you a lot of money in the long run. Furthermore, just having that protection in place if you need it is still beneficial even if you never end up using it, so don’t just think in purely financial terms when considering buying a home warranty.

Be sure to weigh up the pros and cons before making your mind up. And, if you decide against buying a home warranty now, you should still consider it again at a later date, especially if you move homes or if your circumstances change in another way.

Final Thoughts

Deciding whether or not to buy a home warranty, let alone finding the best one for you, is tricky. But, as long as you follow our tips and only consider home warranties sold by trusted and well-rated companies, you should be fine.

As a home warranty is a pretty considerable and ongoing expense, it’s well worth spending an extra few hours on shopping around and finding the best deal for you. After all, even saving just a few dollars a month on your home warranty can add up to quite a bit of money over the course of a few years.

David Goldstein
David launched Boomer Buyer Guides with his wife Alice to provide Baby Boomers with trustworthy, well-researched information about products and services that Baby Boomers buy. Learn more about David Goldstein