Most Common Home Warranty Claims

Maybe you just bought a house, and the seller included some extended warranty coverage, or perhaps you purchased an older home and want to mitigate expensive repair costs in the future.

Either way, home warranties can be an excellent way to protect your home and appliances from disrepair. However, since home warranties can range from $500 to $1,000 in annual costs, you should understand what you are buying and how to utilize your coverage.

Today we will discuss some of the most common home warranty claims to illustrate how they can help you save money on common home repairs and how to find a home warranty that fits your needs and budget.

Home Warranties

Home warranties are service contracts between a warranty company and the homeowner designed to transfer a large portion of repair costs to the warranty. Once the two parties reach a service agreement, the warranty company will pay for repairs outlined in their contract, often with the exception of a service fee.

Although some warranty companies have their own contractors, many prefer to subcontract with local repair and service companies that have undergone a prior screening. This is important for homeowners to understand because they may not have much choice in their service provider, so you should call the warranty company before you schedule a repair. If you choose a provider that the warranty company does not approve, they may deny your claim.

• Benefits

The primary benefit of a home warranty is the potential savings provided by extensive repairs. While you may be comfortable self-insuring smaller appliances like toasters and dishwashers, other systems such as HVAC, plumbing, and water heaters can cost thousands of dollars to repair. If you do not want to be on the hook for a new AC unit soon after purchasing your home, you should strongly consider a home warranty.

Many homeowners experience confusion between a home warranty and their homeowner’s insurance policy. The primary difference between insurance and a warranty centers on liability. For example, if a guest incurs an injury on your property, you may be liable for their medical expenses. In this case, your homeowner’s insurance policy would pay for the damages because of your personal liability, whereas a home warranty is designed to pay for repair expenses.

• General Coverage

Many home warranties cover systems and appliances within the home, including:

1. Ductwork
2. Heating
3. Water heaters
4. Interior plumbing
5. Air conditioning (sometimes this requires extra coverage)
6. Oven and stove
7. Garage doors

Although some warranties may include more or less, these are the generally accepted systems and appliances found within most home warranty contracts. When you make a service appointment for one of these covered items, you will most likely need to pay a service charge out of pocket. The service charge is essentially a booking fee to the contractor to come out and evaluate your situation.

• Special Coverage

Some homes may have a pool, jacuzzis, jet tubs, and other expensive equipment that requires additional expertise to repair. Many home warranty companies offer extended service plans that will include more robust care for these appliances and the HVAC system. As you assemble a quote for a home warranty, ensure the plan you choose is reflective of the systems and devices in your home.

Common Claims

The most considerable amount of home warranty claims are the direct result of mechanical
failures. Mechanical failures are found in machines and equipment that were assembled somewhere else and include things like garbage disposals and water heaters.

Other common repairs have a structural origin, such as garage doors and home foundations.

• Plumbing

Interior plumbing ensures that showers, sinks, and other appliances receive adequate water pressure and control water flow throughout the house. When pipes burst or leak, the damage can be serious, so it’s essential that you file a plumbing claim with your home warranty company as soon as you notice an issue.

• HVAC

Heating and air conditioning malfunctions are immediately noticeable because of drastic temperature changes. A majority of home warranty claims include HVAC repairs because they are both inconvenient and expensive. Before you call your local HVAC service company, check with your home warranty provider to make sure they are an approved vendor.

• Water Heaters and Appliances

Water heaters can cause many headaches depending on the age and condition of your home, especially if they stop working or start leaking. Thankfully, most home warranty companies include water heater coverage to protect you and your home from severe damage. If you have a newer home, the water heater may have its own warranty in addition to your extended home warranty. Make sure to read the terms of both warranties, so you file claims correctly.

Costs

Home warranties come in many shapes and sizes, so it’s vital to consider your budget and needs before purchasing one. Start with your home’s current condition. If it is newer, you may not need a robust warranty since many of the appliances and fixtures may still be covered by their own warranty.

If you have an older home with dated HVAC units and appliances, you may strongly want to consider a bigger home warranty because one major repair will most likely pay for the warranty itself. Once you have a general idea of how much coverage you need, shop around for a provider who services your area and let you use contractors with whom you already have a relationship.

Final Thoughts

Home warranties can be a tremendous financial safeguard for you and your home, regardless of its size and age. Once you find the right warranty, you will feel extra peace of mind because your home will be protected. If you want to learn more about home warranties or compare some of the top providers, please check out our other guides and reviews!