For most of us, our homes are our biggest investment.
It’s a no-brainer that you want to protect that investment and save as much money as possible. It’s expensive to replace or repair things like your roof, your appliances or plumbing.
That’s where a home warranty homes comes in. When a warranty works as intended, homeowners get peace of mind for a reasonable price of $500 to $800 a year.
Just think, if your dishwasher fails, you just pay a co-pay of $50 to $75 to have it fixed. Your warranty company picks up the rest of the tab.
But how do know if you will really be covered when you need it most? It all boils down to the details and the quality of the company and plan you choose.
For example, some plans may cover your refrigerator but not the icemaker. Or some plans may not cover your refrigerator at all if you failed to clean the coils, as recommended in your owner’s manual.
Many companies have exclusions of coverage for homeowners who neglect to keep up with “homeowner maintenance.”
Elizabeth Czyryca, of Valrico, thinks her home warranty was useless. She paid $550 for her warranty.
Her contract implies everything, from appliances to septic system, is covered. She even added her pool pump to her policy.
“We decided that because of the age on our appliances, they are still in very good condition, but we knew with 21 years in the property, those could fail, too, and that would be a quick remedy, instead of spending the full amount,” Czyryca said.
But it wasn’t the appliances that went first. It was the sewage pipe under her home. It burst and water backed up in the bathtub. She couldn’t do laundry, but her warranty company was in no hurry to send out a contractor.
“They said, ‘someone will be out Friday.’ I said, ‘five days? We have sewage backing up in our system and stuff.’ He said, ‘We’re not an emergency company, we’re only a warranty company,'” Czyryca said.
Then, after work began, Czyryca says she was informed that her claim was denied because she didn’t purchase the right type of septic coverage.
Eric Deggans, of St. Petersburg, found his home warranty to be not worth the hassle, even though he was told his repair was covered by his plan.
His warranty company agreed to fix his broken air conditioner, but not quickly.
While he waited for two weeks, he paid for a hotel and a dog sitter. Deggans works from home and was miserable of the heat.
“I feel like they [were] waiting me out,” Deggans said.
If that was the case, the warranty company won. After two weeks, Deggans gave up and hired his own contractor. Two days later, he had cold air again.
“So, why was one company able to initiate a repair in two days and the other company took them two weeks?” Deggans asked. “It just doesn’t make any sense to me.”
Deggans isn’t sure that all home warranties are useless, but he feels his plan wasn’t worth it for the type of repair he needed.
“The contract is quite extensive and there’s a lot of provisions it in it, and it seems that you’re protected, but the one thing you don’t realize is that they don’t have a mandated amount of time in which they have to necessarily do a repair,” Deggans said.
However, sometimes, home warranties can save you thousands.
Just ask Michelle James. She’s had a home warranty with the same company for 20 years and says, “I’ve definitely gotten my money’s worth.”
“At my second home that I owned, we had a direct lightning strike,” James said. “My water main blew up in my front yard, I lost half the electricity in my house, the sprinkler lines, it was multiple things. It was probably easily $10,000 worth of damage.”
But James only had to pay three co-pays of $75 each.
She says she’s heard horror stories of warranty company and even had a few headaches herself with repairs. She’s a believer, though, after having her dishwasher, refrigerator and garage door repaired multiple times.
Bottom line: you need to be realistic.
“They’re there to make money,” James said. “They’re not there to hand out new appliances, that’s not the way it works.”
Remember, a home warranty is not homeowner’s insurance. Insurance covers losses due to things like damage, theft or fire.
In contrast, your home warranty company offers a service contract. The company fixes or replaces specific items that may break in your home.
The Better Business Bureau recommends you consider whether your home would benefit from such a warranty.
For example, what type of coverage do you already have? If you buy a new home, your builder will offer a structural warranty, typically for 10 years. Home appliances typically have a one-year warranty.
Consumer Reports recommends homeowners who don’t have a warranty consider self insuring. Just set money aside for an emergency fund, in case something goes wrong in the home.
The best advice of all? Do your homework on the company and its contractors.
“Seek out and find good, quality home warranty companies,” said Bryan Oglesby, of the BBB.
“Ask those family and friends, look on the internet, do your research, and when you contact the ones you like, ask those questions. ‘What kind of companies do you send out to us?’ See if they have a list of contractors. Even check the contractors out and see if these contractors have good ratings, good reviews.”