Should You Buy a Home Warranty?
To buy a home warranty, or to not buy a home warranty? That is the question. And the answer is…..it depends. Some get it for peace of mind, others don’t bother. There’s no right answer, but let’s take a look to help you decide if you should buy a home warranty.
What Is a Home Warranty?
First of all, let’s clear up the fact that a home warranty is not the same as home insurance. It does not cover major damages or liability. It’s meant to help homeowner’s pay for the costs of repair and/or to replace your home’s systems.
What Do They Cover?
Things like heating and cooling, electrical and plumbing, appliances, and more. Many even have add on policies available to extend coverage to your roof, electronics, septic, well, pools and hot tubs. Some even provide coverage for older homes and systems, without any previous maintenance records.
Of course, to help keep your home running smoothly, check out The Ultimate Home Maintenance Checklist.
How Do They Work?
They typically are a one year contract. Some allow you to pay all upfront or in monthly installments. Some will make you wait thirty days after you sign up before they go into effect. They usually have a deductible for each repair request. The deductibles I’ve seen can range between $75-$125 depending on what you select when you sign up.
When you need a repair, first you call the warranty company, or go online, to fill out a service request form. Then you pay your deductible and they assign a repair professional to your request. The repair professional will contact you to set up a diagnostic appointment. After that appointment, they will work with the warranty company to set up the repair, or replacement, of your covered item.
Why Get a Home Warranty?
There are a few reasons were it does make sense to buy a home warranty. When buying a home, it will take some time for you to learn about your home’s systems. You don’t know if the previous homeowner maintained their home. You don’t know if they put a “band aid” on things to sell it. Having a home warranty for at least that first year after purchasing a home can offer great peace of mind while you’re learning about your house.
It can also be a good idea to keep renewing your home warranty policy every year if you’re not a good saver. Or if you are living paycheck to paycheck. You can usually pick one up for a few hundred dollars a year, and many offer monthly payment options. This can be helpful to budget in a small amount each month for the warranty, knowing you’re covered should your refrigerator go out, or your kitchen sink springs a leak.
When buying a home, some sellers will include a home warranty plan for the buyer for the first year. If not, you can always ask them to throw one in.
My Review Of a Home Warranty
You may be wondering which company is the best. While I cannot answer that for you, I can tell you of my experience with American Home Shield.
The seller of my first home in 2006 gave me a warranty plan for a year. Within months the water heater went out. American Home Shield replaced it and all we had to pay was the $75 deductible. It was a quick and professional repair. While we did not renew the home warranty after that first year, it was definitely a great experience for us.
We bought another home in 2020 that was fifteen years old. We decided to get a home warranty, for that first year. Especially since living with a well, septic, and a pool was going to be a new experience for us. We chose American Home Shield again.
The first year in our home the furnace went out, the central air conditioner went out, the range stopped working, and the pool pump broke. We definitely came out ahead that first year with all those repairs covered by American Home Shield.
We renewed the warranty for the second year. And I’m glad we did because the dishwasher failed, our kitchen sink leaked, the well pump stopped, and another part on the AC broke. All repairs were covered by the warranty.
We’re on our third year with it now. So far we’ve just had to have a shower valve cartridge replaced by the warranty. We have not decided yet if we’ll renew after this year is up.
Are They Worth It?
If you Google Home Warranty Reviews online, you’ll see most companies get a bad rap. It’s unfortunate that not enough people review when things are good. I feel that most speak up when there is a problem. This is just my personal experience, take it for what it’s worth.
As you can see from my experiences above, they have definitely been worth it for me in the years that I have purchased them. However, some may think they are a waste of money if they never have anything break down while they have a warranty plan. The choice is yours alone to make. You have to figure out if it makes financial sense to you to get one.
