Should You Purchase A Home Warranty Plan?

Photo Credit: Judy van der Velden https://flic.kr/p/bUqzYi
Photo Credit: Judy van der Velden https://flic.kr/p/bUqzYi

Generally when you buy a home, the seller will pay for you to have a home warranty plan in force for one year. After that first year, you then have to choose whether you want to continue paying the premiums to extend that plan.   This can be a confusing decision, but one with which we can help!   Below you’ll find information regarding the standard coverages provided by a home warranty plan, along with additional info to help you decide whether you should or should not renew your existing plan.

 

How Much Does a Home Warranty Plan Cost? Plans typically range from $250 to $450, depending on coverage specifics.

 

What is Generally Covered Under a Home Warranty Plan?

  • Air Conditioning
  • Ceiling Fans
  • Dishwashers
  • Doorbells
  • Ductwork
  • Electrical Systems
  • Furnace/Heating
  • Garbage Disposal
  • Inside Plumbing Stoppages
  • Range and Oven
  • Water Heater

 

What is Generally NOT Covered?

  • Compliance Upgrades (aka – bringing water heater up to code)
  • Haul-Away Costs
  • Outdoor Items (sprinklers, fences, etc.)
  • Permit Fees
  • Refrigerators, Washers/Dryers, Garage Door Openers, Faucet Repairs (not all plans cover these)
  • Spa or Pools (unless specific coverage requested)

 

Should You Renew Your Plan?Consider the following:

  • The general age of your items that would be covered by the plan (older items are more likely to fail)
  • Your experience maintaining a home (can you tackle the repairs on your own?)
  • Your resources for helping you fix problems (consider your friends & family…assess the tools you have)
  • Your financial capability to replace items should they fail (are you capable of buying a new dishwasher?)

 

If You Buy a Plan, What Type of Coverage Should You Get?Consider your specific needs. Make sure you pay close attention to whether the home warranty company will pay for repairs to make certain types of systems or appliances compliant with new regulations. We’ve seen water heaters go out with a home warranty plan that covers its replacement. But the plan didn’t cover the $500 in work that needed to be done in order to update the compliance of the system.

 

We hope this helps with your decision about your Home Warranty Plan options.   Feel free to contact us if you have questions about whether you should renew your Home Warranty Plan…we’re here to help!

About

Chad Peshke is an experienced Financial Services Provider specializing in tax preparation, home loans and personal finance coaching. He holds a Bachelors Degree in Economics from the University of California in Santa Barbara and is licensed in tax preparation, loan origination, real estate and insurance. View all posts

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