A home warranty/home protection plan is a service contract that protects many of the appliances or systems (heating, plumbing, air conditioning) in your house in case they fail. They can serve as a security blanket of sorts to homeowners, particularly if you’re purchasing a home that is older or hasn’t had much in the way of upkeep over the past number of years. Plans are often offered on an annual basis and can cost much less than it otherwise would to fix a home system or replace a home appliance should one of those cease to function.
There are many, many home warranty companies, and you can read reviews about them as well as request a free quote online. Some warranties only cover appliances, and some only cover systems. If you want both areas covered, be sure to note that when you ask for your quote.
“Home warranty plans can be a great source of security for buyers feeling uneasy about taking care of property, but they can also be helpful for sellers,” said Karen Nordstrom, a realtor with Howard Hanna Real Estate in Shaker Heights, OH. “Our company uses Home Security of America, Inc. (HAS), which allows sellers to include the home warranty in the listing if they sign it as part of the listing agreement. In this case, they’re covered during the listing period until the home closes, and then the buyer picks up the coverage for the full year. So a seller could have it for nine months, and then it transfers to the buyer for an additional 12 months, all for the same price. It’s a great marketing tool, but it also covers the seller’s home in case items covered by the plan cease working during the time that their home is on the market.”
Typically, when you call your home warranty company to make a claim, they will schedule a contractor —typically a third-party, local company specializing in repairs of the system or appliance you’re having trouble with— to come out and evaluate the problem.
When my husband and I bought our first home last year, it hadn’t been well maintained for more than five years. The seller included a home warranty plan with the home. It cost $459.00 for the HMS Home Warranty by HomeSure Services, and our deductible would be $100 per claim.
Here’s the rub: many home-warranty programs will not cover certain parts or failings. You need to read your contract very carefully before calling to make a claim. It’s no fun to pay a $100 deductible, due during the first visit of the contractor, only to learn that your warranty does not cover the broken part of your appliance or system.
For example: last year, when my husband and I were making our home wheelchair-accessible, our contractor discovered black mold in the bathroom due to a leaky shower pan. We called our home-warranty company to make a claim, and they sent a local plumber out to evaluate the damage. We had to write a $100 deductible check to his company (I’m guessing this is how home-warranty companies curry favor with local contractors), only to be told that the damage would not be covered, because our home warranty did not cover 1) shower pans or 2) water damage.
Later that year, however, my clothes dryer broke. This was an appliance that came with the house. A little smarter from our deductible debacle, I scoured the warranty plan to determine the likelihood that the dryer repair would be covered. The problem was my dryer wasn’t producing hot air. The warranty specifically listed “clothes dryer heating elements.” Then I looked at the items not covered. Most of the items not covered for clothes dryers had to do with the door mechanisms. I was pretty confident that wasn’t the problem, so I called the home warranty company. They sent out a technician and I paid him the $100. He took my dryer apart and spent at least an hour diagnosing the problem, and then realized he didn’t have the part in stock, so he’d have to come back. All told, he spent 2.5 hours fixing my clothes dryer. My hundred-dollar deductible definitely paid off.
Nevertheless, why spend $100 when you don’t have to? My washing machine died mid-load during Thanksgiving break. It wouldn’t spin, agitate, or drain. I typed these symptoms into my trusty search engine and came up with the DIY forum “Repair Clinic.” The symptoms came up with a failed lid switch; even better, it gave me the directions for how to fix the problem. My husband and I did a lid-switch override after taking the housing off the washing machine and got it to drain. Then, after learning that the new lid switch would cost upward of $40 via our local parts clearinghouse, I did an eBay search. The good people at Seneca River Trading, Inc., first helped me ensure I was ordering the correct lid-switch for my particular washing machine model, and then sold me the switch for $11.70 including shipping. It arrived within 48 hours and it was easy to pop out the old switch and put in the new one. In fact, the most difficult part of the repair was re-housing the cover onto the machine. Viola! Saved nearly $90 and earned the satisfaction of completing a successful home-appliance repair.
Score: One for the home warranty company, one for anti-home-warranty, and one for me and my cleverness. I’ll take it. This year when my warranty expires, I’m going to get a few quotes to see how the coverage differs between companies, but I’m expecting I’ll get a warranty with one of them.
As Nordstrom said, “Home warranties aren’t for every buyer, but they give the assurance to the buyer for particularly the first year when they aren’t as familiar with their new home’s appliances and systems. It saves a lot of drama at the beginning period of owning a property, and some homeowners renew their plan year after year.”