Buying a house is really a big purchase and there shouldn’t be a chance for second guesses, hence the need for a home warranty. Basically, a home warranty, is a contract between a homeowner and a warranty company to offer discounted repair or replacement services for major home appliances at reduced cost to the owner. Most times, these service only covers components such as air conditioning, furnace, plumbing and electrical system. However, owners will be given the option to include one or more optional components for extra charges.
Like all warranties, a home warranty is meant to protect against pricey, unexpected repair bills and give peace of mind. For a homeowner who doesn't have a contingency fund or who wants to preserve their emergency fund, a home warranty can act as a buffer. Home warranties also make sense for people who aren't handy or who don't want to worry about tracking down a renovator when they have a problem. Warranties can also be the better choice for people with pricey taste in appliances.
So, should you get a home warranty? Before you decide, you've got to consider the following drawbacks of home warranties pointed out by Consumers' Checkbook:
Coverage: Warranties may not handle the priciest repairs you might face. Of the half-dozen plans from the major warranty firms examined by Checkbook, none covered roofs, leaky windows or skylights, basement moisture problems or chimney repairs. While others charged extra to handle plumbing and heating, ventilation and air conditioning devices.
Cost: Due to the "thin coverage," plus the $50-$75 service charge per claim, the charges may not add up in your favor unless you have a particularly bad repair year.
Contractors: You don't choose the plumber, electrician or other contractor who arrives at your home. Rather, you call the warranty company, which dispatches the next-in-line repair service with which it deals. But although warranty companies claim their technicians are pre-screened and perform great work, Checkbook isn't convinced.
With that said, ask the sellers of the home you are about to make an offer on to buy one for you. Make sure you ask for complete coverage of the Roof, the AC, your appliances and pool pump. The basics may not be enough.
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