For years, the Keating Agency has told you through its blogs about the importance of Homeowners Insurance. We also discuss what types of incidents and personal property may be covered under your policy. Typically, mechanical failure of your refrigerator or washing machine isn’t covered.
Lately, several companies have come forward offering to sell consumers home warranties. These “policies” promise to cover the cost of repairs or replacement of common household appliances or systems when they break down.
Sound too good to be true? Maybe.
Home Warranties: Know What You’re Getting Into
Forbes says that, like Homeowners Insurance, home warranties may provide important protection for your belongings. However, before signing any papers or paying a company money, it recommends reading the policy language very carefully.
Typical home warranties provide coverage for homes up to 5,000 square feet in size. They can cost a few hundred dollars each year or even a thousand dollars. Larger homes may need additional coverage.
Like a Homeowners Insurance policy, your warranty likely will have a deductible. When a covered appliance (or central air) breaks, the warranty company sends a service technician to repair or replace the item.
Having such a policy in place may provide peace of mind for new homeowners and those not particularly handy. Budget conscious individuals may also want a warranty. Unanticipated repairs won’t break the bank.
However, money expert Clark Howard calls home warranties a waste of money. As good as they sound, Howard said companies are often difficult to deal with.
Often, you must use the company’s contractor for repairs to be covered. This means repairs are made when the contractor is available, sometimes weeks after the appliance stops working.
Howard said the largest warranty company, American Home Shield, was the subject of nearly 11,000 Better Business Bureau complaints over the last three years. If that’s the best company, how good is the worst company?
For 50 years, the Keating Agency has been your local, independent insurance agent. We provide information to help our readers make better decisions. Additionally, we are happy to answer any questions you may have about warranties or other issues. Contact us anytime.