Home Warranty Yes or No?
Home Warranty Explained
One thing you might not realize is that each market is a little different when it comes to who will pay for what services and what services are even considered standard. One of the areas that this affects you is the Home Warranty. In our market in Riverside County it is standard that the seller buys a one year home warranty for the buyer. Of course there are exceptions and whenever it is a short sale or a bank owned foreclosure all bets are off and many times the bank will exclude paying for the home warranty.
What is a home warranty?:
It is a basic insurance policy that helps protect you in case of a major system failure or component failure during the year you are covered. If any covered component or system fails you are entitled to a service call and repair for a flat fee of approximately $50. There are exclusions and swimming pools, spas, AC and fridges are usually extra so make sure you understand the coverage you are getting. However, I always call my home warranty company when anything happens. Let them tell you what is and is not covered. Don’t guess.
What a home warranty is not:
It does not replace your homeowners insurance in anyway. You still need structure and content insurance. It is not a theft policy and it is not an emergency service. If the AC goes out on Saturday in August you will have to call someone else and pay for the repair yourself. Home warranty service is scheduled by appointment Monday through Friday 9am to 5pm. Although you can sometimes reach a call center after hours by dialing the 800 number your service won’t take place until normal work week hours.
My Recommendation:
When you first buy a home I think it is best to take the warranty offered by the seller, or if they won’t pay for one go ahead and get one yourself. You are unfamiliar with this property and have no way of knowing what the repair history of the systems is. After your first year in the home you will have the opportunity to renew the policy and at that point you need to make your real decision. Are you confident in the systems to the point where you are willing to go without the coverage. Can you cover an unexpected large expense if something were to happen? If the answer is no, I recommend that you consider renewing the policy. If you are unhappy with your current service provider call me and I can help you find another company. There are several in the market place and I have an opinion about which ones offer better customer service.
(Michael Layton, GRI, e-Pro – www.PSagent.com)