When you purchase a home warranty or insurance policy, it’s with the intention of using it if your home is ever damaged. Unfortunately, these policies can be complex, and there are times when you may be misled on what the policy actually covers.
With home warranties, you should know that these policies don’t always cover the issues that you would normally see covered under home insurance. That might catch you off-guard, especially as the home warranty was purchased exactly for the kind of damage that you’re dealing with.
For example, if you have a water heater ruined by an unexpectedly cold night, you may think that your warranty will cover it. That won’t always be the case. Even though a home warranty is supposed to be an extended service contract on essential equipment, like your HVAC system or major kitchen appliances, you may have to turn to your homeowner’s insurance to make a claim instead.
How can you protect yourself against a denied home warranty claim?
The first thing to do is to make sure you read through the warranty and its fine print. There will likely be caps on damages and there could be a deductible.
The warranty should go over what exactly is covered and when. If there are any gray areas, it’s reasonable to talk to the warranty provider to discuss anything you don’t understand. Note who you spoke to and the date on your warranty, so you can refer back to it if needed in the future.
Finally, only choose home warranties from licensed companies. Check their references and be sure that they have positive reviews. These companies are aiming to make more on the warranties than they pay out, but you should avoid any company with a history of denying claims that they should have paid on.
Whenever you purchase a home warranty, you need to avoid falling for exaggerated claims, like that the warranty is comprehensive without details, because the reality is that these companies rarely offer comprehensive services without specific requirements that have to be met. Protect yourself by getting a thorough understanding of what you’re purchasing, so you can make a confident claim.