4 Tips to Understanding a Home Warranty
Verify your home warranty company before signing a service contract. (Photo courtesy of Darien Wilson)
Don't be hoodwinked by a home warranty service contract. Homeowners sometimes make the mistake of thinking home warranties act like homeowner's insurance — they don't. Before you buy or renew a home warranty, consider the following tips:
Check with your state's department of insurance to verify if the home warranty company you're considering is properly licensed to do business. If licensing isn't required in your state, review the company's status with Angie's List, as well as your local consumer protection agency.
Review the fine print
Be sure to thoroughly read the fine print — the devil is in the details, and you want to make certain the proper items are covered by the warranty. Don't be afraid to speak up and ask the company any lingering questions before deciding if a home warranty service contract is right for you.
Communicate with your real estate agent
If you've received the home warranty when you bought a house, keep your real estate agent in the loop regarding any denied claims. He or she may have a relationship with the home warranty company and can make a call on your behalf.
Submit a review
Be sure to tell the home warranty company if their network contractor did a good job or not. Most keep a rating system on their contractors and disperse work accordingly. Also, submit a review with Angie's List, so other homeowners in your community can keeps tabs on who is performing well.
Editor's note: This is an updated version of a story originally published on May 4, 2011.