September 2018

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Is a Home Warranty Worth It?
by Ariana Gagné
Living in South Florida, there is nothing worse than having
your air conditioner break down during the summer. Having
a company come out to fix it can cost you hundreds, if not
thousands. Purchasing a home warranty to cover the cost
of unexpected repairs sounds like a good strategy. But, is it
worth it?
What is a home warranty?
A home warranty is an annual service contract that covers
mechanical breakdowns of your home’s major appliances,
air conditioning, plumbing, and electrical systems. There is
an annual premium with deductibles for each time service
is rendered. However, a few local companies offer “no
deductible” contracts where unlimited service calls are
included at no additional charge.
How much does a home warranty cost?
Home warranties can vary from $300 to $750 annually
depending on the coverage of the contract. Choosing a $300
plan will typically have a deductible for each service call,
whereas a more expensive plan will not have deductibles for
service calls and will cover more items at no additional cost.
What’s the difference between a home warranty
and home insurance?
A home warranty and home insurance are two entirely different
things. Homeowners insurance will cover the structure of your
home from things like fire, storm damage, and crime. A home
warranty will cover specific items in your home like appliances,
air conditioning, plumbing, and electrical systems.
What to look for in a home warranty company
The issue with most national home warranty companies is that
they sub-contract their repair work to a third party. There are
major advantages to working with a company who directly
employs their technicians. You’ll typically get much faster
response times with same-day or next-day service, complete
repairs on a single call, and great customer service. With third
party providers, the response time can take two or three days,
repairs will take multiple visits to complete, and the service is
less than desirable. So look for companies who employ their
technicians directly.
The second thing to look for when getting a home warranty
is to think about the types of systems you have in your home.
If you have relatively new appliances you’ll want to take a
lower premium warranty that has a deductible per service call.
Since your appliances are relatively new, the likelihood of them
going bad is pretty low. However, if something should happen,
your plan will allow you to pay a lower overall cost to get it
repaired. If your appliances are a bit older, you’ll want to go
with a plan that has a higher premium, but no service charge
per visit called a “no deductible” or “nondeductible” plan. What
happens with older appliances and systems is that multiple
things break down at different times. Since your warranty
won’t have a deductible per service call, you’ll get unlimited
service calls at no additional cost.
The last thing you want to consider when purchasing a home
warranty is what the plan covers. Many home warranties cover
just appliances, or just your appliances and air conditioner. Try
to find a plan that covers many things in the home including
the electrical and plumbing systems. Be careful though, home
warranty companies are notorious for making you sign different
contracts for each system, each with its own premium. Find
a company that covers your appliances, air conditioner,
electrical, and plumbing systems under one contract and has
one annual premium.
So, is a home warranty worth it?
If your appliances are less than a year old, then a home
warranty doesn’t make much sense. But, for the rest of us,
a home warranty is well worth it. Remember to purchase the
right plan based on your unique situation. Take into account
everything in this article and you’ll find that a home warranty
will serve you well. P
Ariana Gagné, Senior Columnist, East Coast Mechanical Inc.
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SEPTEMBER 2018