Most homeowners want to find the cheapest home warranty plan for their needs. A key consideration when deciding if a home warranty plan is “worth it” is the amount of the deductible on the home warranty plan. A home warranty deductible, or a service call fee, can add up to a substantial amount. This service fee, along with the actual home warranty coverage provided, will strongly impact the value/risk equation.
In this article, I’ll talk about deductible costs, home warranty costs, and coverage limits for home appliances and home systems to help you select the right home warranty coverage plan that will provide the maximum value for your money.
Best Home Warranty Plans by Deductible Range
It’s crucial to emphasize that selecting a home warranty company that suits your home goes beyond mere deductible costs. A home warranty provider that doesn’t provide good coverage for home systems and home appliances, has poor customer support, yet has low deductible limits is of little benefit. If customer support is unreachable, the actual cost of the deductible becomes unimportant. The best home warranty insurance provides exceptional home warranty service, which can save you time, money and provide peace of mind.
I recommend American Home Shield as a trusted, industry-leading home warranty company. American Home Shield is an industry leader in providing home warranty plans, and right now you can become a member today and save $150. Get a free online quote or contact a specialist at 888-764-4618 before this deal ends.
Your next best option is Select Home Warranty, which offers $150 off + 2 free months and free roof leak coverage. Get a free quote online or ask for more information on home warranty plans directly at 888-370-3954.
Home Warranty Deductible: Delving Into the Nitty-Gritty
If you’ve ever bought homeowners insurance, you might be familiar with the general concept of a deductible. When something goes wrong, the deductible is what you have to pay before the homeowners insurance kicks in.
A home warranty plan is no different; the concept is similar. Most home warranty plans have deductibles, sometimes known as service fees. When you call in for service using your home warranty coverage, you will need to pay this out of pocket cost in order to receive service. In other words, the service call fees are the home warranty deductibles. For example, Choice home warranty deductible is Choice home warranty service call fee. Select home warranty deductible is Select home warranty service call fee. American Home Shield’s service fee is the cost of a service call.
There are home warranty companies with no deductibles, such as Whirlpool warranty. While the vast majority of home warranty plans have a deductible, some do not and they don’t charge a service call fee. These home warranty companies are not included below because they are fewer in number, and less likely to be encountered by consumers. Most of the home warranty plans do have deductibles or service call fees, with an industry average of approximately $75.
Some home warranty companies, like American Home Shield or TotalProtect Home Warranty, let their customers choose the amount of a deductible, based on the amount of the premium. The higher the cost of an American Home Shield warranty, the lower the deductible. For more detailed information on deductibles in different home warranty companies, please see the table below.
Home Warranty Deductibles in Different Companies
| Company | Amount |
| Choice Home Warranty deductible | $85 |
| Select Home Warranty deductible | $60 |
| American Home Shield warranty deductible | $100 – $125 |
| HMS Home Warranty deductible | $100 |
| HSA Home Warranty deductible | $75 – $100 |
| Fidelity home warranty deductible | $75 |
| Home Warranty of America deductible | $75 – $100 |
| First American Home Warranty deductible | $75 |
| Old Republic Home Protection deductible | $85 |
| ServicePlus Home Warranty deductible | $75 – $125 |
| Sears Home Warranty deductible | $75 |
It is important to pay attention to the fine print, exclusions and coverage limits on any home warranty plan. Low maximum coverage limits render home warranty plans largely ineffectual. This study considered plans with deductibles and reasonably high compensation limits, and the potential to compensate for major repairs to home systems and major appliances. That is, after all, the main reason why so many opt for a home warranty plan in the first place. Home warranty plans provide homeowners with much-needed peace of mind.
How Much Are Home Warranty Deductibles, and How Do They Affect Premiums?
Eighty-six home warranty plans from 20 different home warranty companies were surveyed to discover what consumers can expect to pay for deductibles. I found that home warranty deductibles range from $50 to $125 for these major policies, with 42 of the policies, about half, at $75. A smaller number are higher at $100 (16) and the highest figure of $125 (7).
For premiums, I found a range from $240 annually to just over $1,100. It might make sense that a higher premium would result in a lower deductible, yet this is not the case. In fact, some of the highest premiums have slightly higher deductibles and service fees.
This may seem to confuse the situation further. How do you decide which home warranty plan to buy when premiums and deductibles or service fees have a minimal relationship?
Knowing upfront that premiums and deductibles are not proportionate frees you to make a choice based not only on price but also on coverage limits. You want to buy a home warranty plan with affordable premiums and deductibles, but beyond that to make sure you have home warranty coverage for all potential issues affecting your real estate.
What Are Common Issues Reported Relating to Deductibles?
To uncover the most common issues reported regarding home warranty plan deductibles, a survey was conducted on 443 online comments and reviews about home warranty companies. Among these, 58 comments mentioned the deductible.
Reviews mentioned a wide array of issues for which coverage was invoked, including air conditioning systems, ovens, water heaters, and refrigerators. It’s important to note that a good home warranty will cover all of these home systems and many other potential problems within the home.
Why, then, were deductibles mentioned in these reviews?
The majority of issues were related to the home warranty companie’s refusal to repair an issue after a deductible was paid (36%). There was also an issue with delay in repairs after the deductible was paid (19%). This indicates that many problems relate directly to obtaining repair service after the deductible is paid.
A smaller number of consumers (22%) reported that repairs were done by a service provider, but that the repair service was poor. Then, 14% mentioned that compensation was offered in lieu of repairs, and 9% mentioned other issues. Some consumers also complained that they paid a deductible several times for several visits on the same issue.
Finally, it’s important to consider the value of the deductible as a portion of the overall repair cost. To make this calculation, let’s consider a hypothetical scenario in which all reviewers actually had repairs to home systems completed. If such were the case, what value would the deductible have represented?
Out of the 58 reviews surveyed, 13 paid less than 15% of the overall repair cost as deductible, and 19 paid either 15 to 24% of the repair cost or 25 to 49% of the repair cost.
For high-priced repairs, the cost of repairs or replacements greatly outweighs the deductible value. In any given case, the ultimate value proposition depends upon the severity of the repairs. The more severe the repairs, the better value the deductible, and the more money saved for the homeowner.
Consumers should make sure that repair service will be provided by their home warranty company in a timely fashion that addresses the issue head-on. With proper research, you are empowered to decide which home warranty companies are likely to provide home warranty coverage with better repair service, and which are not.
Conclusion: Know What Your Home Warranty Covers
Ultimately, make the decision about buying a home warranty plan based on your own parameters and priorities. Home warranties with deductibles offer the greatest range of options for providing proper home warranty coverage for common home systems and major appliances.
As discovered by this survey, premium and deductible costs should not be the sole determining factor in purchasing a home warranty plan. Review home warranty plans based on what you can afford, plan exclusions, coverage limits, and what best meets your needs.
Are home warranty plans worth it? Based on my over two decades of real estate experience, I recommend home warranty plans for the average homeowner. Every homeowner considering a home warranty plan should prioritize both the price and quality of the plan for peace of mind.
i Companies surveyed include: Anchor Home Warranty, Choice Home Warranty, Fidelity National Home Warranty, First American Home Buyers Protection, Hello Super, HMS Home Warranty, Old Republic Home Protection, Secure Home Warranty, Select Home Warranty, Total Home Protection, American Home Guard, Home Security of America, Home Warranty of America, Landmark Home, AFC Home Warranty, American Home Shield, TotalProtect Home Warranty
ii Review data sourced from www.mythrecents.com and www.outscam.com.
