Home warranties are protection plans for your appliances and systems. Sears offers three home warranty plans to help consumers save money on what can be costly repairs. We go in-depth on these types of plans, and give you the details on what Sears has to offer and whether or not it’s worth your hard earned money.
A home is a big investment. In fact, it’s the largest investment most of us will ever make, so protecting ourselves against the major repair costs that sometimes come with a new home purchase is essential. That’s where home warranties come in.
Home warranty companies in the U.S. were created with the idea that you could pay into a service contract with a company, and then not have to worry about expensive home repairs or replacements as they came up, because the contracted company would cover the majority of the cost.
Home warranties can be a great strategy for many, especially first-time homebuyers or those with only a single income who may not have the budget for large repairs, but they aren’t right for everyone. There are a few questions you should ask yourself before investing in a home warranty deal, and some pros and cons to weigh.
In this article, we will give you the facts on home warranty companies in the U.S., talk about what you should consider before you buy them, give you the details about the Sears home warranty plan, and then give a final analysis about what we think and who it may or may not work for in the end.
What To Consider Before Purchasing A Home Warranty
It’s important to understand that a home warranty and homeowners insurance are not the same thing. They do not cover the same types of events, and cannot replace each other. Homeowners insurance covers you if there is damage to your home in the case of a fire or storm, or if you are robbed.
A home warranty is there to protect your home’s systems and major appliances through the normal process of wear and tear as those systems and appliances age. Repairs on these types of things are very normal for homeowners, but not everyone can afford them, and this protection is for those in that latter group.
How Do Home Warranties Work?
Home warranties are fairly simple to understand, as they work similarly to health insurance, but for your house instead of your family. Each year that you’d like the warranty, or for the duration of your contract period with the company, you pay an annual premium, and then you pay a deductible anytime you need to use it.
Standard warranties can cost anywhere from a few hundred to a thousand dollars a year, and deductibles typically fall within the range of $50-$150 depending on the terms of your contract. When you pay the deductible, the warranty company will send out someone to service, and replace if necessary, your appliance or system.
Are My Systems And Appliances Already Protected?
Home warranties were created for those individuals buying a home that is new to them, but not new to this world. When you purchase an older home, you purchase the issues that may be brewing along with it, which can sometimes be costly. If you’re buying a brand new home, you may not need a home warranty.
Since brand new homes typically come with new appliances and systems, those entities are generally already covered under a manufacturer’s warranty for at least a year. The same is true if you buy new appliances for your older home, or if you know your new home just had a new furnace installed earlier this year.
If you buy appliances or systems on some major credit cards, you may have double the coverage from the manufacturer’s warranty. American Express, for instance, automatically gives you up to an additional 12-month warranty on products purchased with their card, and some cards go even longer.
If you fall under any of these categories, you may want to consider avoiding a home warranty, since you’re already covered for at least a year. Home warranties were built for people who aren’t covered another way, so keep that in mind when making your decision.
What are the Costs and What Does it Cover?
How much a home warranty will cost you depends entirely on who you purchase it from and how often you have to use it. There are typically three types of home warranties you can purchase: one for a particular appliance or system, one for all of your appliances, or one for your whole home (aka: all appliances and systems).
It’s important to note when we’re talking about systems; we are referring to your HVAC, plumbing, and electrical systems. Not all home warranties will cover all three, but many do. It’s essential that you do your research and understand exactly what your warranty will and will not cover before you invest.
This is not the time that you’ll want to ignore the terms of service and terms and conditions like you do on the Internet. You’ll need to thoroughly read every detail so that you understand what is and is not covered.
Some complaints come when consumers don’t understand that just because their fridge is covered, doesn’t mean the ice maker on the fridge can be fixed or replaced. Fine print like that isn’t a fun thing to find out when you’re in the heat of the battle, and there’s nothing the company can do to help if you signed the contract.
Home warranty fine print may also snub you for not performing routine maintenance on an appliance, or for improper installation. It’s like a pre-existing condition with medical insurance, and companies will sometimes use these things to not pay for your repairs. Reading the fine print before signing up is vital.
Repair Vs. Replacement And Plan Limitations
The last couple of things to consider when purchasing a home warranty are whether your broken items will be repaired or replaced, and if there is a limit to home much your plan will pay out over time.
Many home warranty companies in the U.S. have the same philosophy: if a repair is too pricey, they’ll replace the item instead. However, this is not always a good thing. Some companies will only offer the depreciated value of the item to replace it, or they may provide cheaper quick fixes that won’t last long but may outlast your warranty.
In addition to the replacement vs. repair question, you’ll need to look for how much your plan will cover in physical dollars. It will depend on the type of plan you purchase, and whom you purchase it from, but all companies have a limit, so make sure you read the fine print to find out yours.
Sears Home Warranty
One of the home warranty companies in the U.S. is the Sears Home Warranty program has been around since 2014, so they don’t have a lot of experience under their belt, but they have a trusted name to help consumers feel more at ease with their home warranty purchase.
Sears offers three plan types at increasing prices starting at $49.99 per month up to $69.99 per month. The cheapest plan is an appliance only coverage plan, the second is a systems only coverage plan, and the third covers both appliances and systems. Sears also offers your first month free in most states.
The Appliance Only Plan
This plan protects against major appliance breakdowns and covers ten total appliances throughout your home. Those appliances are as follows:
Before buying this plan, you may want to consider how many of those appliances you own. If you live in a home with a countertop microwave, no range hood/ exhaust fan, and no trash compactor, you’re really paying for protection you aren’t going to get.
The Systems Only Plan
With the systems only plan you are covered for a total of 11 systems throughout your home and garage. These systems include the following:
We can see that this plan seems like it covers quite a bit, but really three of those 11 things seem like they should be included as one item: plumbing. This is something you’ll need to pay attention to on any home warranty, because you may assume plumbing includes faucets and toilets or stoppages, when in fact it does not.
The nice thing about this plan is that your garage door opener and garbage disposal are also covered. Since those things are sometimes more delicate than the rest of your major systems, having this plan may be beneficial.
The Whole House Plan
The whole house plan covers all 21 appliances and systems that were covered in the previously discussed plans. It is a great deal at only $10 per month more than the systems plan alone. This plan is definitely the best value of the three, but again you will need to double check that it is worth it for your circumstances.
All three of these plans come with extras that Sears believes makes their plan worth the purchase over other home warranty plans. First, like all home warranties, you’re getting budget protection because you get to avoid the potentially high costs of unexpected repairs as they arise.
You also get a 180-day guarantee with the Sears plan, which means that your repairs are guaranteed for six months after service, which can give you more piece of mind. In addition to this guarantee, Sears says they will replace the product if they can’t repair it, but that doesn’t mean they’ll cover every replacement at full value.
In addition to the basic benefits above, Sears also offers access to shopping rewards at Sears and Kmart stores, discounted oil changes and free tire rotations at Sears Auto Centers, and one free check of your heating and one free check of your cooling system each year at no charge.
The Sears Home Warranty looks great on the surface, but their reviews and lack of experience make us second-guess how great the service really is. Let’s look at the pros and cons of their service before we get into the details.
Although the pricing seems reasonable when you look at it month to month, Sears is at the top end of what home warranties usually cost, at $599.98 a year for their cheapest package and $839.99 for the most expensive. Couple those prices with any deductibles or add-ons you need, and you’re in for a pretty expensive service plan.
We like that you can cancel at any time without a fee to switch to a new home warranty provider or just go without a warranty altogether. We also like the added benefits that are available, like discounted auto services and rewards to use at Sears or Kmart.
However, as Sears stumbles in the greater market, and has recently filed for bankruptcy, these added benefits might disappear, or be useless for many throughout the country. If we don’t include those benefits in our discussion, the reasons to pass this one by are starting to outweigh the positives.
Overall we think this is a good plan for individuals who have a majority of the appliances and systems covered under the whole house plan. We think that the whole house plan is the only plan worth the costs, especially if you need an add-on like pool or spa coverage or septic tank pumping, both of which can be pricey.
We do not, however, believe this is a good plan for individuals who have to cross at least four or five of these items off because their home doesn’t have these appliances. For instance, a home without a range hood/exhaust fan, trash compactor, and garbage disposal doesn’t necessarily need one of these plans.
At the end of the day, if we had to give the Sears Home Warranty plans a grade, we’d give them a B. The plans are good for some, but not for others, and they definitely require the reading of fine print before signing a contract. However, for individuals who need a home warranty and want a trusted name behind it, this could be the plan for you.