Home Warranties
The Good, the Bad, and the UGLY
The Good.
Home warranties
are insurance policies sold to homeowners and property management companies to
warrant a home against system breakdowns. A leak under the kitchen sink or a backed-up toilet? No problem. A call to
the warranty company, and a licensed vendor is sent out to correct the
problem. Landlords and property managers
appreciate the convenience and the savings (sometimes) that these warranties
provide. Items covered can include
heating, air conditioning, water heaters, plumbing and electrical issues, and
kitchen and laundry room appliances.
When a breakdown occurs
(a ceiling fan starts wobbling, a bathroom faucet is leaking, the A/C isn't
cooling, the dryer starts making a loud noise, or the dishwasher starts
leaking), one might normally have to start calling around to find the right
vendor and take a chance with a stranger to fix the problem, all the while
wondering what the total cost will be to get things right. This can also be very time consuming. But with a warranty, it takes only one call to the warranty company,
and they send out the vendor to fix the problem.
The Bad
The cost of these
warranties range from $450 to $550 per year. Some (but not all) also require a deductible ranging from $75 to $125 for
each call.
The Ugly
All warranties
have their list of exclusions, that is, items that are not covered under the
warranty.
For example, the
refrigerator may be covered but not the ice maker, bathroom plumbing may be covered
but not the whirlpool jets that come in some tubs. Any items that were
improperly installed or not installed according to code may not be
covered.It is usually a long list
of items. –Also, any problem that
pre-existed the purchase of the warranty will not be covered.
In
Summary
Home warranties
are an excellent way of providing homeowners with the security of knowing that
most sudden or large repair issues in the home will be covered by the
warranty.
Not all
warranties are Equal, however. It is important to shop around. Get
recommendations from a property management company, as they are likely to know
which ones are good and which ones are better to avoid. Online reviews can also be very helpful.
Read the contract
to find out the amount of the deductible, if any, and to see what is covered and
what isn’t.