Settling into your new home is an exciting time...until a major repair needs to be made. Whether your home is new or old, things happen. Appliances break down, heating systems fail, and roofs become leaky. This is where a home warranty policy can come in handy.

A home warranty is a contract that covers the repair (and sometimes even replacement) of appliances and major systems throughout your home. Coverage is based on normal wear-and-tear that is bound to happen over time.

There are tons of companies and policies to choose from when it comes to home warranties. The main question is whether or not the overall cost of the plan is worth it in the end. If you’re on the fence about investing in a policy, here are 5 questions to answer before signing a warranty contract.

What is the annual cost of the policy?

Deciding if the annual cost of the policy is worth it in the end might be the determining factor for you. Depending on the coverage you choose, a policy typically costs between $350 to $600 per year. If you don’t actually use the coverage, this might seem like a loss. But in event of a much-needed repair, it can save your bank account.

What’s covered and what isn’t?

This is a huge question when deciding which policy to choose. You’ll need to check to see what appliances and systems are covered and to what extent. Major appliances like your stove, fridge, and dishwasher are almost always covered for repair (as long as the issue is from normal wear-and-tear). Be sure to confirm what isn’t covered as well to avoid any unpleasant surprises.

What is the process for making a claim?

Just like with a health or car insurance policy, making a claim might feel like a chore. Even if your appliance is in need of a repair, some companies require a 1-2 month waiting period before a service request is made. Read the terms and conditions thoroughly and check out home warranty reviews to get an idea of the claims process.

Does the company have a solid reputation?

A good reputation and solid customer service is key when choosing a home warranty policy. You want a team that is on your side to keep your home running as smoothly as possible. If only you could interview each company to narrow down the best candidates. But it is not as easy as collecting resumes and asking about greatest strengths. You’ll need to read reviews from fellow homeowners.

What are the service fees like?

Every time you call in a service request, you’ll be charged a fee. Depending on your policy, this fee could be as much as $100 per house visit. Rarely will you pay less than $30 for a service visit, and this will always be paid out-of-pocket. Keep in mind this does not always fix the problem. You’ll most likely need to make an additional claim for ongoing issues.