When you own your own home, you have to be ready for unexpected repair costs at any time. And sometimes that can get expensive. But home warranty policies have kept my repair costs way down and made it easier to get things fixed. Here is my 14-year experience.
I learned about home warranty policies when I bought my second house in 2000. That house came with a home warranty provided by the seller. If any appliance or operating system (plumbing, electrical, etc) in the house failed, the warranty would cover its repair or replacement minus a set $100 deductible. “Nice,” I thought, “an extra little peace of mind.” And then I promptly pushed the warranty to the back of my mind — until the gas furnace failed to start up a couple of months later.
Getting a home system fixed isn’t just costly; it is also a stressful hassle — especially when you are new in town, as I was. Who do you call? How do you know they will do a good job? How do you know you are paying a fair price? Getting those questions answered takes time and trouble. And sometimes you have to learn by trial and error. But having the home warranty changed all that for me.
I got my hands on the home warranty booklet, verified that furnace repairs were covered (hurray!), and phoned the repair request number in the booklet. And… presto! In just a couple of minutes, the claims agent gave me a repair approval code number and the contact info for an approved furnace repair company. So I did not have to search for one myself. And the warranty company would guarantee the service outfit’s work. I did not have to worry about that problem, either.
So I contacted the service company, gave them my repair approval code number, their technician came and replaced some expensive gizmo in the furnace, and I just paid a $100 deductible. Problem solved. Case closed. And I was sold on home warranty policies.
Since then, we have had home warranty policies on 3 different houses in 3 different towns. (And I have worked the deductible down to $50.) We have had many, many electrical, plumbing, heating and appliance problems solved under those warranties. Just twice I have had to ask the warranty company to rework a problem, and both times this has been done without argument. And we have had several items replaced outright: a well pump, a large refrigerator, a clothes dryer, an entire set of incoming water lines. In my experience, having a home warranty policy has been a complete success.
Financially I am also satisfied. My half-share of our annual cost for a home warranty policy has averaged around $250 and fit with no trouble into my $14,000 annual baseline budget. Aside from the now $50 per call deductible, we have been totally shielded from large repair or replacement bills. We have contained our home repair costs and avoided nasty cost surprises.
In short, having a home warranty policy has given us much more control over our expenses. And it has reduced my level of homeowner stress. Home warranty policies have certainly worked for me.
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I’m fascinated by this. New home warranties (which sound a bit different?) are an absolute, utter joke here. They’re basically a developer scam and claims are denied, and if you take them to court, they just drag out the proceedings for ever and ever so that it’s so expensive no one ever wants to pursue the claims.
Hi, Anne…
Yea, developer warranties do sound too prone to abuse. The home repair warranties I am referring to are issued by independent specialty companies that do this as an insurance-like business. They market the policies, as a peace-of-mind bonus for the house buyer, to individuals wanting to sell their houses. The companies will also sell the policies to those home buyers. I learned about the policies when I was told that one such policy came with the house I was buying at the time. The rest is history, as they say.
Interesting-we’ve always used the one year policy that we got when we purchased the house and let it drop.
I have been meaning to add you to my blog roll, however I’m in the process of moving to wordpress, so holding off until I do some things there.
Welcome, Barb!
I probably would also have dropped the policy that came with the house I bought (2 houses ago). But then the furnace went, and the incoming well pipes were declared substandard — and the policy covered a major furnace repair and replacement of the well pipes. So, when I found out I could renew the policy as the new homeowner — and that the annual premium was way less than what those 2 first repairs would have cost me — I decided to give it a one-year try. And I’ve been renewing the policy each year “on a trial basis” because each year I’ve gotten more than my premium’s worth in covered repairs.
A lot of people tell me they’ve had — or heard that other people have had — bad experiences with these policies. Other folks tell me they are not worth what they cost. But all I know is that I keep coming out ahead each year.