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Is a Home Warranty Worth It?:The first question any new homebuyer needs to ask themselves is "Do I really need a home warranty?". Unlike homeowners insurance which is mandatory if you have a mortgage, getting a home warranty is totally voluntary and certainly worth considering. When we moved into our house the real estate agent told us the owners were throwing in a home warranty (1 year contract) as a bonus. I had never bought a home before so I wasn't all that concerned with having a warranty since I figured the house was only 5 years old and probably didn't need any repairs. Many of my neighbors bought home warranties when they moved in and several have used them to their benefits over the years. Unlike home insurance which covers things like fire, break ins, flood damage, storm damage, etc., a home warranty is designed more like a service contract and allows you to replace or repair things like broken dishwashers or nonfunctional stoves.
*Dishwashers What may not be covered are things like:
*Irrigation and sprinkler repairs Another reason why some repairs are not covered under the policy is because there was a lack of proper maintenance or perhaps building code violations were not followed. We read of other reports where installation was done incorrectly and the repairs were not covered per the home warranty contract. Cases with unsual wear and tear were also reported and the homeowner received no coverage. On the other side of things, two of my neighbors had issues with leaking dishwashers (covered on their home warranties) and their entire kitchen floors needed to be replaced as well as the dishwasher free of charge (except for the small deductible). With new homes, a home warranty is not an essential piece to the puzzle, but with aging homes it's always a good idea to get a home warranty for things like furnaces, water heaters, and AC units. They are expensive to fix and having an extended warranty for the home is a good idea.
Home Warranty Cost:The first question out of almost all new homeowners mouths is "How Much Does a Home Warranty Cost?". Unlike homeowners insurance which can be $1000 or more a year, a home warranty is much cheaper. Most 1 year plans range from $300 to $600. The price differences often are based around what is actually covered in the warranty and the age of the house/appliances. You will have to pay for each service call, but the amount is usually quite reasonable - somewhere between $40 and $90. There are some home warranties that will cover the higher priced fixes like roofs, air conditioning, and pools, but you will pay quite a bit more each year for having those listed on the policy.
Home Warranty Companies:There are literally dozens of home warranty companies and you should be able to find them via a search on the Internet or have your real estate agent recommend one. We went with AHS (American Home Shield) and were somewhat satisfied with the service. We had a technician come out twice in the first year. The first issue was with the cooktop making a strange noise that was caused by water being spilled and they replaced a defective part. Secondly, we had a guy come out to look at our oven. It never seemed to heat up as fast as we would have like but his instruments showed it was running just fine. Although we disagreed, there was nothing we could do about it. Other home warranty companies include BPG Home Warranty, First American Home Buyers Protection, Home Warranty of America, Inc, Universal Home Protection, and Home Security of America, Inc. They all have websites and local agents that can help sign you up. No matter which company you choose, keep in mind that the repairs probably won't get done the next day. On average, homeowners say that it takes about 3 to 5 days for a technician to come out. They diagnose the situation and often need to get repair parts ordered so you could still be waiting another week or more.
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