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There are two schools of thought when it comes to home warranties: #1 they are extremely beneficial and can save you lots of money in the long term, or #2 they are a waste of money and they never payout. Depending on the home warranty company that a homeowner chooses, either #1, or #2 may be correct. The difference is evident when reputable home warranty companies are factored into the equation.
It is highly recommended for home owners to conduct their due diligence on home warranties (reviews and guides) and get acquainted with valuable insights about the top home warranty providers of 2018 like Select Home Warranty, Choice Home Warranty, Total Home Protection, Pride Home Warranty, and Endurance Home Warranty.
In This Post:
Choosing the right home warranty provider is sacrosanct
Over the years, there have been more than a fair share of ‘horror stories’ with home warranty companies. Whether they’ve been fly-by-night operations, or they were simply unfit to offer their services to the general public remains to be seen. Among the many complaints leveled against certain home warranty companies over the years have been the following: rejection of claims, insufficient coverage, poor customer service, etc.
It’s not supposed to be a crap shoot when choosing a home warranty provider to protect your home systems and appliances. Home warranties are designed to offer coverage on electro-mechanical, plumbing, AC and other systems in the home. For the most part, coverage at reputable providers is affordable. It ranges from $300 per year on the low end to $600 per year on the high-end. The deductible is typically limited to the cost of a service callout. There are coverage limits for appliances, systems, or plans. Provided you read the terms and conditions carefully, it is possible to come out ahead when a legitimate claim has been submitted, a technician has evaluated the claim, and the necessary approval has been granted.
How can home warranties save money?
For many folks, it seems disingenuous that payments are made for insurance that may or may not be used. Wouldn’t it simply be better to put that $300 – $600 in a special savings account for home systems and appliances? This rationale makes sense only if you have brand-new appliances that are less than a year old. Once you’ve moved beyond the 1 year mark, the manufacturer’s warranty typically expires, and any mechanical faults, or functionality issues will cost dearly.
Consider how much needs to be laid out for a brand-new refrigerator: $1,000 – $3,000 on average. A microwave can run anywhere from $100 – $800, depending on the brand, features, and functions, and a dishwasher can range from $250 – $1,000. Other expensive systems include the range (particularly expensive if you have induction ovens), AC units (several thousand dollars to replace), and plumbing systems. That $300 – $600 paid to a home warranty provider is small change compared to the cost of repairing or replacing any of the systems out-of-pocket.
For illustrative purposes, consider a refrigerator that was purchased for $3,000. It would take at least 6 years’ of payments to a home warranty company at $500 per year to recover the costs of that refrigerator. If the refrigerator stopped functioning within the second or third year due to burnout or mechanical failure, the home warranty was well worth the cost. If multiple systems and appliances need repair or replacement, it’s easy to see how money savings with home warranty plans the way are to go.
A caveat is in order: Always ensure the credibility of the home warranty provider being used. The best way to do this is to read extensively on the services provided by that home warranty company, and the customer satisfaction ratings thereof. Perhaps equally important are the plans that have been selected. Does the plan cover the items that need to be covered? What are the coverage limits with those plans? How responsive is customer support and how quickly can technicians get out to your property to approve a work order? These are all issues that need to be fully investigated before a home warranty plan is selected.
Can DIY work alongside home warranty coverage for maximum savings?
Many people do not have the requisite skills to unclog a kitchen sink garbage disposal unit if it suddenly stops spinning or churning. If an individual has basic skills and can safely remove, or clean out this unit, a home warranty service technician doesn’t need to be called out to provide these expert services. In much the same way, someone who understands how to clean the lint out of the back of a dryer or rewire a rudimentary electrical system can also save money by not having to call out a technician.
Technical work is expensive because it entails specialized knowledge. A basic understanding of a drip tray in an AC unit and the trip switch that turns it on or off can certainly help. Rather than calling out a technician and paying the mandatory callout fee, it’s easy to simply take care of it yourself and leave the expert work to the experts. All in all, DIY knowledge and home warranty plans are highly effective ways of saving money.