home warranty service fee

Why Are There Different Service Fee Levels?

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Home Warranty Service FeeIf you have been researching home warranty plans, prices, and other info lately, you probably noticed that companies offer a wide range of “service fees.” So what is a service fee, and why do the prices vary so much?

A service fee is the fee that you pay when a contractor visits your home to diagnose and repair a covered item under your home warranty. So if your air conditioning stops working, call your home warranty company and they will assign a contractor to your job. When that contractor arrives, you will be him or her the service fee based on the plan you purchased. Pretty simple, right?

So why are there so many different service fee levels available? In the last few years, many home warranty companies have been raising their service fees to keep up with rising costs in the home repair and maintenance industry. Other companies have kept their prices low in an effort to steal customers from the bigger, more expensive companies. When you compare service fees across different brands, you will see that they vary from about $35 to $125 on average.

When looking at a single brand, you may notice that there are different service fee levels for that company, too. For instance, American Home Shield offers fees ranging from $75 to $125. But why? It’s actually a way for this company to offer you different premium prices to fit your budget. If you select a higher service fee like $125, your overall premium payment for the year will be much lower. If you select a lower service fee like $75, your premium will be higher.

Which service fee is right for you? Think about your home and appliances. Are they aging quickly? Do you expect to make multiple claims on your home warranty this year? If so, you may want to select the lower service fee so each call costs you less. If your home is relatively new and you don’t expect many problems, consider selecting a higher service fee to reduce your overall premium for the year.

If you already have a home warranty, how much is your service fee? Tell us in the comments below.

Ready to get a home warranty? Get your free quote now.

photo credit: EricGjerde via photopin cc

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