If you’re like me and never considered having a home warranty, don’t be alarmed, you’re in good company. For most of us, when we bought our first home, we became “house poor” almost instantly, barely making it because no one ever prepared us for all the expenses that go with owning a home. If you started out your adult life renting an apartment or small house, you know that you didn’t think twice about the garbage disposal that broke or the dryer that busted because your landlord took care of it. When you purchase a tv, cell phone, even a video game, you’re asked if you also want to purchase a warranty on the item. So why not on the most expensive purchase you’ll ever make?
You have homeowner’s insurance, so why would you need a warranty? The difference is that insurance can cover your home from fire damage, when a pipe bursts and floods the house, or in the unfortunate case of theft. A home warranty is like an insurance that may partly or in whole, cover the cost of fixing or replacing parts of your appliances and large units, should they go out due to normal wear and tear. If your child is trying to balance on the dryer door to do an acrobatic trick and breaks it, this won’t be covered. Warranties come in packages or you have the option of customizing your own plan to best suit the needs of your home, depending on the size, age or complexity of it. I would suggest you do your research and look for vetted companies that will deliver what they promised. You can ask your Realtor for recommendations or check with the Better Business Bureau. Be sure to review the contract thoroughly to see what exactly is covered and what is not. According to a sample contract that is posted on American Home Shield website, central air conditioning units and all their parts are covered but not window units or chillers.
Keep in mind that there is a service call fee for someone to come out and assess the damage and determine whether your plan will cover the cost of fixing and replacing the parts. On top of the service fee and your monthly payments, you may still have out of pocket expenses to pay for some of the work or parts. A home warranty may good for you if you have a lot of breakdowns and have had to replace or fix many appliances in the past, but if you are able to fix some things yourself and have only had 1-2 breakdowns in the last 5 years, then it’s possible that you may end up saving yourself some money by not having one. Weigh your options, do your research and read the fine print, and make a smart choice. Keep your home running smoothly and comfortably.