Home Warranty Plans
Do you really need one?
You have probably seen the television ads for home warranty programs depicting the frustrated homeowner having to deal with a large expense that he would have avoided had he purchased one of their plans. You know, the ones with the air conditioner on fire or the pending zombie apocalypse
.
Home warranty plans are frequently offered to the buyer of a new home as part of the sale. The warranty companies love these plans because it’s a new home and chances are slim that anything will break down. If it does, there are already other warranties in place from the homebuilder and the appliance makers. If the
warranty plan is free as a gift from the Seller or real estate agent, then take it. But paying for one in a new home doesn’t make much sense.
In an older property, the concept of a warranty plan does make sense, but be aware that there are few vendors willing to service our area because of the traffic. Instead, ask the Seller to give you a credit for the amount of the home warranty plan. Make sure you have a detailed home inspection so you know what is likely to fail soon and
plan for it. It is always a good idea to set aside a reasonable sum each year to cover
routine maintenance and repairs.
Remember that these warranty companies care about one thing and one thing only - getting the repair done at the absolute lowest cost. They will contract with the vendor giving them the best deal, which usually means bad service for the consumer. You may find yourself calling them day after day with no response, or finally having the repair done only for it to fail again. You also must pay a service fee of $75.00 to $100.00 for each visit and that is in addition to the annual cost of the plan itself.
The plan can be a good investment if you are faced with a major repair. If you decide to purchase one, read the fine print and make sure to know exactly what will be covered.
