A home protection plan helps cover repair and replacement costs in case major appliances or systems are damaged. Here’s how it works.
What is a home protection plan?
In short, a home protection plan is a service contract between a homeowner and a company that helps cover the repair and maintenance costs of home systems and appliances for a given period.
It is important to note that a home protection plan is not home insurance (more on this later), nor represents a manufacturer’s warranty. People sometimes confuse the terms home protection plan, homeowners insurance, and extended warranties, but they are very different. If you are shopping for home protection, ensure you understand the definition before enrolling.
How do home protection plans work?
A home protection plan helps when significant home appliances and built-in systems fail due to everyday wear and tear. Home protection repairs (or, in some cases, replaces) items covered in the plan of choice – from microwaves and washing machines to refrigerators and air conditioning (A/C) systems.
Remember, the details of your coverage depend on the contract details you agree to. You’ll have several plans to choose from.
So, how do home protection plans work in general? Here’s a basic overview of what the process generally looks like:
- Step 1: An appliance or system covered under your plan breaks/stops working.
- Step 2: You inform the home services company and request a service provider. At this time, you usually pay a deductible upfront, which may be applied to the cost of the repair or replacement.
- Step 3: The home services company contacts a trusted service provider in your geographic area.
- Step 4: The service provider contacts you to schedule and confirm the appointment.
- Step 5: The service provider fixes the problem, if possible.
- Step 6: If a fix isn’t possible, the home services company may offer a replacement model with similar features or provide funds to allow you to purchase a unit of your choice (up to a certain amount).
What does a home protection plan cover?
Home protection plans have different categories of coverage. An appliance plan covers select, predefined major appliances, like an oven, washer/dryer, dishwasher and refrigerator.
A systems plan covers the major systems in your home, like heating and cooling, plumbing, and electrical. Finally, a third plan covers both major appliances and home systems. You can also request optional coverage and add-ons for more comprehensive coverage.
What does a home protection plan NOT cover?
While a home protection plan provides valuable coverage for repairs and replacements of many home systems and appliances, it’s important to know its limitations. Generally, home protection plans do not cover pre-existing conditions, improper installations or damages caused by lack of maintenance. Cosmetic defects, like scratches or dents, are also typically excluded. Additionally, items outside your basic plan—like pools, septic systems or outdoor equipment—may require optional add-ons for coverage.
It’s also worth noting that home protection plans won’t cover issues arising from natural disasters or structural problems, as these are typically under the umbrella of homeowners insurance. Always review your contract to understand what’s included and excluded, so there are no surprises when filing a claim. Knowing the boundaries of your coverage can help you make the most of your home protection.
The difference between home protection plans and homeowners insurance
A home protection plan covers the service and repair or replacement of your home’s major systems and appliances, generally for one year. A home services company issues this type of protection, which differs from homeowners insurance, which provides financial protection in a natural disaster or accident.
While very important, homeowner’s insurance does not protect your home appliances and systems from normal wear and tear. Adding a home protection plan can protect you from costly repairs and replacements not covered by homeowners insurance.
How to get a home protection plan that’s right for you
Having the right home protection coverage can help you save money on costly repairs. Click or call to get an instant quote and find out just how affordable a home protection plan can be. Get peace of mind and increased protection for your home today.
The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may be different than those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied. The opinions expressed by guest bloggers are theirs alone and do not reflect the opinions of AIS Management LLC, any subsidiary or affiliate of the same, or any employee thereof. We are not responsible for the accuracy of any of the information supplied by the guest bloggers.
