Are Home Warranties Worth The Yearly Expense?

by Tania Dakka · 0 comments

You just bought your home, and the disposal has conked out.

But you don’t have to panic. When you bought the house, the seller covered your first year there with a home warranty. The difficult decision after year one, when it’s time to renew. Will you continue your coverage, or risk paying more by stop paying for the home warranty?

You might think a home warranty is not worth the cost. After all, chances are good that you actually didn’t even use it. But what will you do if your home humidifier goes out and it’s $285 to fix? And then when the HVAC guy hands you that $365 repair bill for your heater? You’ll start to wonder if…maybe you should’ve renewed.

So how do you decide whether or not to renew?

While home warranty coverage differs from company to company, generally they cover the appliances, heating & a/c, and parts of the plumbing. You might be tempted to walk away from a home warranty if you haven’t had to use it much, but if you have to repair 1 or more of the units mentioned above, you might regret not having that coverage.

New homeowners who don’t have much experience in the upkeep of a home would do well to maintain their plans. However, if you or your spouse are handy at home repair, it may not be worth the expense to pay that money year after year.

And before getting lost in the dream that all parts of the covered systems fall under the umbrella of “coverage,” it’s worth mentioning that even though your refrigerator is a covered appliance, the ice maker may not be covered. This is another factor to consider when making the decision to obtain or maintain a home warranty.

Many young, inexperienced homeowners fail to read the fine print and are shocked to find out that parts of a unit may not be covered when they need service. They also tend to look at the expense as another monthly bill which makes it less attractive for them.

Look at the coverage and payment objectively. What can you afford? What can you do yourself if something breaks? Do you know what you’ll do if anything does break? Do you know a trustworthy repairman?

When answering these questions, if you are completely comfortable knowing that if all of the usually-covered systems were to need repairs within the year, that you’d be okay financially, perhaps skipping the warranty would be a good idea.

However, if you’re not sure how you’d fare, then start studying home warranty companies and the items covered. Be sure you’re asking the right questions when doing your research, because less money up front doesn’t mean its the best deal.

List your warranty and its attributes.

  • Covered items
  • Exclusions from covers
  • Price for repair visits
  • Price for the yearly contract
  • Causes for denial of claims
  • Reputation of the company

Weigh the facts accordingly.

  • What can you afford to fix on your own?
  • Will there be too many things not covered by the warranty?
  • Do you know how to repair many of the items covered yourself?

Make your decision based on the above questions. Some people may just rest better knowing they carried the coverage anyway, but if you are interested in saving money, it may not be necessary.

Do you opt for a home warranty? Why or why not?

Bonus Tip:

Another way to save on your monthly Internet and TV costs is to find a current ATT U-Verse coupon code or at least a promotion to knock down your home service bill.

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: