Is a Home Warranty right for me?

By Richie Vraux

Most people that just purchased a home are not thinking of laying out more money to buy a Home Warranty. Given the opportunity, most people will think, well right now everything works so why should I spend more money on a Home Warranty. But consider this. Your home is a 20 to 30-year-old home and when it was built, those buyers purchased all new appliances.

While they are working perfectly now, exactly how long will it take before they break down? Who knows? The warranty on most appliances is 10 to 20-plus or minus years. It’s a crap shoot. You may be lucky, and they last 10 to 20 more years.

So here is some information regarding the pros and cons for most appliances:

What is a home warranty? A Home Warranty is a service contract that pays the cost of repair or replacement of covered items, such as major kitchen appliances, as well as electrical, plumbing, heating, and air conditioning systems. A Home Warranty does not cover windows, doors, or other structural features, nor does it cover smaller freestanding appliances, such as toasters, microwaves or mixers. The warranty is designed to cover items that are in satisfactory, good working condition.

Are they worth it? The cost of a Home Warranty can range from about $222 to $1,877 per year with a typical annual cost of $1,049. Plans can charge extra for areas like a guest home or a swimming pool. Along with the plan cost you will pay another fee for service calls, ranging from $75 to $125. Compare these costs to the cost of a central air conditioning system, with unexpected averages of $5,500 per Home Advisor, it might be worth it to you. Of course, If you never have a problem, you are that much more ahead, not having bought this warranty.

What Home Warranties cover. HVAC systems/ Air conditioning/Heating units/ Electrical systems/ Plumbing/ Toilets/ Water systems. Major Appliances: Including Refrigerators/ Ovens/ Washer/ Dryers/ Leaky Roofs/ Septic or Well pumps.

Pros of Home Warranties. While Home Warranties can be beneficial, they also have limitations and do not cover everything. A Home Warranty can provide peace of mind. Similarly, if you don’t have do-it-yourself skills to fix things yourself, they will insure you will have help if something goes wrong. Home Warranties tend to offer broader coverage than a manufacturer’s warranty and often last for a longer period. And they can be renewed.

Cons for a Home Warranty. Home Warranties impose dollar limits per repair, per item, per year. These restrictions can vary greatly by provider. You will have to pay a service call each time you have no issue. Home Warranty companies determine whether to fix or replace a system or an issue. If replacing an item, they might go with the cheapest model or one otherwise not to your liking. They can also potentially deny your claim if it is determined that the item is not properly maintained. Home warranties rarely cover acts of nature or God. If your home floods, or a tree crashes through your roof, your policy is unlikely to cover those repairs.

When you might not want to purchase a Home Warranty. Home buyers who buy new construction usually get some type of warranty from the builder for the home materials and workmanship, including the heating and cooling systems, plumbing and electrical systems. The builders typically will not cover the appliances, but those often come with the manufacturer’s warranty. In addition, some credit cards offer extended warranties on top of the manufacturer’s warranties with new purchases, So, if you remodel your kitchen and pay for a new fridge or stove with a credit card, it might not be the same warranty for those appliances. If you are diligent with maintenance and have your home’s systems annually serviced, then you could help avoid the problems a warranty might address.

Home Warranties. Home Warranties always belong to the homeowner and a warranty will not protect you from loss if you rent your home. When you sign a lease, read the fine print regarding the replacement of your appliances and the HVAC due to normal wear. A Home Warranty can be a useful tool for added protection against the cost of repairing systems. There are many downsides of having a Home Warranty, but they can be a life savior if appliances and systems fail. Only you can make that choice. Good luck whichever way you decide.

Richie Vraux is a Realtor/Broker with over 20-plus years of experience. He is a veteran agent with Pine Tree Realty of Maine, 76 Tandberg Trail Windham, ME 04062. 207-317-1297 Richardjvraux@gmail.com www.richardvraux.pinetreeme.com <