Are Home Warranty Plans Expensive?
Home Warranty plans are quite handy when it comes to unexpected appliance repairs and replacements. They provide you with budget protection and peace of mind. However, off late several people across the country have been expressing concerns about the cost of home service contracts. The truth is that home warranty prices are not regulated by a single governing body and that means that the warranty sellers can decide the prices. Hence, prices of home warranty plans vary from company to company.
That said, the general trend is that appliance warranty plans are not expensive. As this would actively discourage homeowners from buying them, most companies tend to make the premiums affordable.
However, annual premiums are not the only cost factor for a home warranty. Let's take a look at various costs involved in an appliance warranty plan
Annual premium: This is the primary charge. It is typically around $200 - $600, but it could vary from company to company and on coverage. This fee is paid annually to ensure continued protection. These days companies also have provision for monthly and quarterly premium payments, which we believe is a wiser option when compared with paying a large lump sum annually.
Service call fee: This is the fee you pay to the technician each time he comes to fix a damaged appliance after you submitted your claim. This is usually less than $100 and is to be paid after the technician takes a look at your broken appliance. However, all companies do not mandate a deductible fee each time an issue is raised. Some companies have plans with zero deductible charges. This means that you don't pay anything to the technician who comes to examine your broken item.
Additional charges: In rare cases, the customer may have to put in money for matters other than premiums and deductibles. For eg, companies often place an upper limit on the money they will spend on a customer. This means that if a customer has exhausted his allotted amount for a year, he may have to pay for the repairs himself unless the contract is renewed for the next year. Also in cases where appliances need to be replaced, the company may not offer the entire amount, they will only pay for a fixed percentage of the replacement cost. The remaining amount is contributed by the homeowner.
Primary factor that decides the price of a warranty plan is the coverage it provides. While basic coverage never increases a plans price above $500, plans with extensive coverage can have premiums that go up to $800.
Yet another factor is the age of the house. While appliance warranties are purchased for homes older than 4 years, homes that are 10+ years may be charged higher premiums. This is not a necessary rule, some companies don't place a restriction on a home's age.
The size of the house is also a deciding factor. Some companies charge higher premiums for houses whose built up area is over 5,000 sq.ft. This rule too varies from company to company and there are companies who do not exercise this rule.
Most reputable companies are considerate of their customers and will always keep their interests second. Such companies also tend to sell plans at affordable rates. As long as you pick a good company and select a plan that suits your budget, chances are slim that you will find your home warranty expensive. We suggest you read more on how to buy a home warranty and how to pick a reputable company. Cheers!
That said, the general trend is that appliance warranty plans are not expensive. As this would actively discourage homeowners from buying them, most companies tend to make the premiums affordable.
However, annual premiums are not the only cost factor for a home warranty. Let's take a look at various costs involved in an appliance warranty plan
Annual premium: This is the primary charge. It is typically around $200 - $600, but it could vary from company to company and on coverage. This fee is paid annually to ensure continued protection. These days companies also have provision for monthly and quarterly premium payments, which we believe is a wiser option when compared with paying a large lump sum annually.
Service call fee: This is the fee you pay to the technician each time he comes to fix a damaged appliance after you submitted your claim. This is usually less than $100 and is to be paid after the technician takes a look at your broken appliance. However, all companies do not mandate a deductible fee each time an issue is raised. Some companies have plans with zero deductible charges. This means that you don't pay anything to the technician who comes to examine your broken item.
Additional charges: In rare cases, the customer may have to put in money for matters other than premiums and deductibles. For eg, companies often place an upper limit on the money they will spend on a customer. This means that if a customer has exhausted his allotted amount for a year, he may have to pay for the repairs himself unless the contract is renewed for the next year. Also in cases where appliances need to be replaced, the company may not offer the entire amount, they will only pay for a fixed percentage of the replacement cost. The remaining amount is contributed by the homeowner.
What decides the price of home warranty plans?
Primary factor that decides the price of a warranty plan is the coverage it provides. While basic coverage never increases a plans price above $500, plans with extensive coverage can have premiums that go up to $800.
Yet another factor is the age of the house. While appliance warranties are purchased for homes older than 4 years, homes that are 10+ years may be charged higher premiums. This is not a necessary rule, some companies don't place a restriction on a home's age.
The size of the house is also a deciding factor. Some companies charge higher premiums for houses whose built up area is over 5,000 sq.ft. This rule too varies from company to company and there are companies who do not exercise this rule.
Home Warranty is affordable
Most reputable companies are considerate of their customers and will always keep their interests second. Such companies also tend to sell plans at affordable rates. As long as you pick a good company and select a plan that suits your budget, chances are slim that you will find your home warranty expensive. We suggest you read more on how to buy a home warranty and how to pick a reputable company. Cheers!
