Even Original Owners in Longmont Estates can get a Warranty!
As a homeowner, you never know when you’ll face unexpected and costly repairs for your home. A home warranty can sound like a great solution to this dilemma, but is it really worth it? Can you get one if you’ve been in the home for more than a year?
Home warranties have gotten a bad reputation, but like any warranty or insurance policy, the upfront cost could be worth it in the end. I have always been told they are a good way to waste money, but that’s not been my experience! I’ve had opportunity to use them in two houses: a pipe that burst inside a wall (on each house!), an A/C unit repair, an electrical panel replacement, and replacement of a water heater.
Whether you receive more benefit from the warranty than you pay for the policy depends on your specific circumstances, though it’s useful to consider systems in your house that might be especially expensive to fix or replace, and the frustration involved in managing the fix.
Read on to learn more about the pros and cons of home warranties and whether it’s something that might fit your particular needs and budget.
What is a home warranty?
It’s a policy where your home’s main systems or appliances will be covered for repair work. It’s usually purchased through a home warranty company.
A home warranty is different from your homeowner’s insurance or a manufacturer’s warranty on a product. For example: It will cover the labor to fix a failed part on a product that your manufacturer’s warranty doesn’t, and it will pay for the plumber to fix a broken pipe but not the damage to your home, which your insurance policy should cover.
Therefore, it can work hand-in-hand with other home policies when something goes wrong.
It’s important to keep in mind that a home warranty is different than home insurance. It’s similar in how car insurance and a car warranty cover different items. Home insurance, like car insurance, covers unforeseen damage and catastrophes, whereas a warranty fixes things that brake earlier than they should have.
What are the typical home systems covered and yearly cost?
Policies typically include air conditioning heating systems, water heater, furnace, plumbing, any built-in appliances such as refrigerator or dish washer, electric systems, and for an additional fee, you can add “extras” such as a swimming pool systems.
One year of coverage typically costs $400-500 with a $75-100 deductible for each a service call.
What do consumers need to know before they buy?
It’s very important to read over the fine print of your contract and understand what is covered and what is excluded. Here are some typical actions to be aware of for standard packages:
- Covers repairs on large systems (heating or air conditioning) but does not always cover replacements. Typically, it will help your keep appliances functioning and in working order.
- Won’t cover if breakage is due to poor maintenance by the homeowner; typically covers “normal wear and tear” of an item.
- Excludes certain items – i.e., may cover refrigerator repairs but not the ice maker.
- Doesn’t cover items once they reach a certain time period or beyond its serviceable life (i.e., 20+ years old).
- Doesn’t cover pre-existing conditions. Items need to be properly installed, maintained, and in good working condition when you apply for coverage.
- Doesn’t typically cover roofs and exterior items.
What happens when I need to have something repaired?
A home warranty company requires you to contact them first when something breaks. They will then contact their service providers to send to your home. They will pay the service provider once the claim is approved.
If you call a service provider without contacting them first, the company may not cover the repair.
You do not control who can come to your home to repair an appliance or major system. That can be a major downside to some homeowners, especially if they have to wait a long time for a repair.
If your furnace breaks down during a cold spell, you have to wait for the home warranty company to deal with their subcontractor.
What if something is not covered when I thought it was?
Like any warranty for any other type of purchase, there are times the warranty company can choose not to cover something. That’s why you need to read the fine print carefully!
What should I look for in a home warranty company?
It’s important to find a reputable company that has been highly recommended by others.
- Investigate its long-term history and Better Business Bureau information.
- Compare coverage levels and upgrades to standard packages along with deductibles and service fees.
- Read the fine print in the contract to understand any co-pays and exclusions.
- Understand how you can cancel a contract.
Let me know if you have any questions about getting a home warranty whether you’re a current homeowner or new homebuyer.
I'm Libby Earthman. I specialize in helping first-time buyers and sellers pursue financial security on the Northern Front Range.
825 Delaware Ave, Suite 208
Longmont, CO 80501