Buying a new home can be a nerve wracking process. Home buyers really want to be sure they are getting their money’s worth in a home. They especially want to be sure that they won’t have to pay for an expensive repair or replace an appliance right after they just spent money on a new home. This is where home warranties come in. Home warranties are available for new homes and for new owners on existing homes as a way to ensure that the home buyer won’t have to deal with the high cost of repairing or replacing a home appliance or an HVAC system. For a monthly payment, the home warranty company offers to coordinate and pay for repairs. Sounds like a dream come true, right? For some home owners it may well be! But others may find that a home warranty causes more headache and actually costs more than just handling a repair out of pocket. To make the best determination for yourself, consider the following issues before making a decision about a home warranty:
1) Coverage Details:
A home warranty for HVAC is similar to health insurance in that it promises to keep equipment running that was running when you bought the warranty, just as insurance is available to keep healthy people healthy. In other words, pre-existing conditions are a big issue in HVAC home warranties. In a home warranty on a brand new home this is pretty simple since the brand new HVAC system was just installed and there are no pre-existing conditions. An HVAC home warranty on an existing home can be a lot more tricky and requires proof that the HVAC equipment was operating properly at the start of the warranty coverage. HVAC home warranties commonly cover only what they call “normal wear and tear” depending on the details outlined in your specific warranty. BE SURE to carefully read the details of your warranty before you sign and pay for it.
2) Local Service Techs:
Do you have a favorite local HVAC company? If you do, you may not be able to work with them through your home warranty company. HVAC home warranty companies typically have agreements with certain HVAC service companies whom they send out to make claim replacements or repairs. You can check with your home warranty company to be sure they use your favorite company but that doesn’t necessarily mean that they will still be using that company next year or the year after when your HVAC system needs a repair. Another thing to keep in mind is that home warranty businesses are looking to pay the least amount of money for repairs and service tech visits (that’s simply how they make money—by paying less for claims than they receive from home owners). You may get the most “economical” service tech at your door instead of the highest quality service tech depending on who is available in the area. Also keep in mind that you will have to pay for each service visit–just like a co-pay with a doctor–and that price varies depending on your home warranty company and the plan you choose. The Home Service Club, for example, offers $65, $95, or $125 service visit co-pay. Though these prices may be higher than you would normally pay for a service call, you should be avoiding a high repair or replacement bill.
3) Your HVAC System:
How old is your HVAC system? If it is 15 years or older, it is approaching the end of its life time. This could be a great or a terrible time to use a home warranty company depending on your coverage details AND their determination of whether the system has been properly maintained. Many companies promise to replace an item or system if they aren’t able to repair it due to discontinued parts or other circumstances. Check out this sample contract from American Home Shield for an idea of how their coverage works. Once again, read the fine print and have all your documentation ready to prove that the system has been properly maintained.
4) Your time and patience:
Finding and scheduling an HVAC service company can take several phone calls and time. A home warranty company can take the pressure off of a busy homeowner by taking care of scheduling for them. However, many home warranty customers report that it took several days to schedule an initial visit and weeks to actually get the problem fixed. This is where your patience comes in…in trusting the home warranty company’s choice in service company you are subjecting yourself to their availability. If you need a repair during a very hot or very cold month, that service company probably already has a full schedule and may not put high priority on home warranty customers. Also consider the needs of your family when it comes to needing a repair during extreme weather: elderly, infants, and people with health conditions shouldn’t be stuck in a home with no heating or cooling. Depending on your situation, the possibility of being uncomfortable for a few days may be well worth having a home warranty.
Most every customer that has contacted us has expressed some frustration with 2 things about their home warranty company:
- Getting in touch to start the claim process
- Getting payment on time
We generally do not work with home warranty companies since we have had some negative experiences with not getting paid from them in the past. However, we do make exceptions depending on the circumstance. If you are thinking of buying a home warranty or making a claim on your existing home warranty, give us a call!