10 questions to ask a home warranty company

What to ask

To get a feel for a home warranty company, ask specifically about what’s covered, what’s not, monthly costs, any coverage limits and how claims and cancellations work.

1. What does the home warranty cover?

The most important question to ask is what the plan covers. Look around your home and make a list of all your major appliances and systems. Are any of these items still under warranty? Have any of them reached the halfway point of their average life span? Then cross out the ones you don’t want to cover with a warranty.

You can use this information to ensure you pick a policy that covers what you need — no more, no less.

Home warranty plans typically cover mechanical systems and appliances, but this varies from company to company and plan to plan. At the very least, you want these common items included in a company’s plans — not as add-ons:

» MORE: What does a home warranty cover?

2. What does the home warranty not cover?

There are certain items, systems or situations a home warranty won't cover. These are called exclusions.

Common exclusions include damage caused by natural disasters, preexisting conditions, improper installation or maintenance, and nonmechanical items. Home warranties won’t cover damage from perils — like a fire — or secondary damage, such as replacing the floor if a pipe leaks. Instead, look to your homeowners insurance policy to fill in the gaps.

Companies explicitly list exclusions in the contract, but make sure to ask just to confirm you understand. Otherwise, you may end up footing the bill for an expensive repair you thought was covered.

3. How much does the policy cost?

Most home warranties have two parts to their pricing: your premium (paid yearly or monthly) and the fee you pay for each service call.

In general, lower premiums come with lower coverage limits, more exclusions or higher service call fees, while plans with more expensive premiums offer more extensive coverage or have higher limits.

When comparing pricing and coverage, also ask how long the policy lasts (most have terms from one to three years).

Jordan Woolf, CEO of We Buy Houses In Bama, a real estate developer based in Huntsville, Alabama, advises to especially pay attention to “automatic renewals, potential price increases and any cancellation fees that may apply.” Some home warranty providers also offer discounts or promotions, so it's always a good idea to ask about any available deals.

» AFFORDABLE PLANS: Cheapest home warranties

4. What are the coverage limits?

Find out if there’s a limit to the number of claims you can make in a year. While companies generally don’t put a cap on the number of claims in a year, they will put a cap on the dollar amount of coverage. For example, they may only pay up to $5,000 a year for AC repairs and replacements. If a repair costs more than this amount, you’ll have to pay the rest out of pocket.

Most companies don’t offer unlimited funds to repair your items. Look for coverage limit caps in the contract.

Also, note that some covered items may have exclusions for certain components or situations. For instance, most companies don’t cover repairs to a toilet seat or lid, but they will cover wax ring seals. Similarly, they’ll fix a clog within 100 feet of the access point but not if it’s caused by tree roots in the main line.

As with any exclusions, make sure you understand how much your warranty covers for every item within the contract’s scope so there are no surprises later.

» LEARN: What is a home warranty?

5. How quickly will warranty claims be addressed?

Appliances that break can be inconvenient, which makes repair times a vital consideration — especially if you have a broken air conditioner in the middle of summer or need a furnace replacement when it’s freezing.

Some warranty companies have contractors available 24/7, while others only offer set business hours for contractor availability.

Ask what the average turnaround time is, and find out what happens if you need emergency services.

» MORE INSIGHTS: How to file a home warranty claim

6. What is the waiting period?

Find out how the waiting period works (if there is one). A reviewer in New Jersey on our site signed up for a warranty with a standard 30-day waiting period: “My garage door opener stopped functioning just over a month after I enrolled. A technician was arranged by then to come, but when he called in to give an estimate for the replacement of the motor, the claim was denied as they said I was within the 30 days period.”

The reviewer continued: “Apparently, after the first 30 days, the warranty is effective. After that, you have to wait another 30 days to make a claim. This was never disclosed to me when I enrolled.”

7. What is the cancellation policy?

“Ask for all the details about cancellation policy before buying the policy,” a reviewer in California advised other potential warranty customers. “It was a headache for me instead of peace of mind.”

Cancellation policies differ between warranty companies, and the worst time to clarify the details of yours is when you want to cancel. Find out the exact steps — and potential charges — involved in canceling a plan now rather than after you buy it.

» KNOW YOUR LEGAL RIGHTS: How are home warranties regulated?

8. Who are the company's local contractors?

When you make a claim with a home warranty company, it sends out a service provider to repair or replace covered items. You don’t usually get to choose who those contractors are, so you want to make sure they’re reputable.

Ask if they’re licensed and bonded in your state, how the warranty provider vets them and how the company handles contractors who don’t perform well.

9. What are my maintenance requirements?

Home warranty companies usually require that your systems and appliances are properly maintained to be eligible for coverage. Some companies may even require you to provide maintenance records when you sign up for coverage, so make sure to clarify this with the company before paying for a plan.

Always keep a copy of maintenance records, even if a company doesn’t require them during the sign-up process.

“Some homeowners may not realize that failing to perform regular maintenance can void their warranty or result in a claim being denied,” Woolf said.

» MAINTAIN YOUR HOME: Annual home maintenance checklist

10. Is the warranty transferable?

Some people don’t realize that plans can often be transferred to new homeowners when a property is sold. “This transferability can be a selling point, but it's important to understand the terms and conditions of the transfer,” according to Woolf.

More tips for getting a home warranty

It's important to understand what you’ll get out of a plan before you buy, and it’s just as important to make sure you’re talking to a good company to begin with. Here's some advice on how to choose a home warranty company:

Bottom line

A good home warranty can save you money if your home systems or appliances break down, but a bad one will cause you a lot of headaches. You have to be vigilant; some companies don’t necessarily have your best interests in mind. Don’t be afraid to ask for clarification if you’re confused about something. Some reps are intentionally vague when explaining exclusions or limitations of the service contract.

» STILL NOT SURE? How to get a home warranty