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It’s every homeowner’s nightmare — something breaks, and it’s going to cost a lot of money to fix or replace it. Unfortunately, no matter how well you take care of your home, sooner or later, an appliance or major system is bound to croak.

Are Appliance Warranties Worth It

Are Appliance Warranties Worth It

Some homeowners plan for this by purchasing a home warranty, which can cover some of the costs associated with normal wear and tear on these units. But before you commit to one, make sure you understand exactly what the warranty is offering.

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For example, even nationally recognized home warranty companies will not necessarily guarantee that a replacement item will be the same size, color or brand as its predecessor.

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In a complaint to Consumer Affairs, a website that provides consumer news and reviews, a disgruntled homeowner included a photo of his white replacement refrigerator that was too tall to fit under the cabinets in the space where the old one was. . According to the complaint, the homeowner waited a month to receive a replacement for his black refrigerator and was left with only the oversized white refrigerator after the warranty company required “restock and transportation fees” to send it back.

While this is not every customer’s experience with home warranties, those who fail to read the fine print of their contracts may be disappointed.

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In today’s hot housing market, with some buyers skipping the home inspection and stretching their finances to make a higher offer, the promise of a discount on home repairs can be understandably attractive. But while home warranties have benefits, homeowners should know that they can’t buy complete peace of mind for the price of a contract.

A home warranty is an optional policy for homeowners that covers the cost of repairing appliances and systems that experience problems. Annual costs can vary significantly depending on the policy, with premiums ranging from $300 to nearly $1,000.

In addition to the annual premiums, if you file a claim, you’ll also have to pay a service fee for a technician (selected by the home warranty company) to come to your home and assess the problem — even if the warranty company ultimately pays you. rejects the claim. Again, the price will depend on your policy; Fees typically run between $75 and $150 per visit.

Are Appliance Warranties Worth It

According to the National Home Service Contract Association, an industry trade organization based in Kansas, home warranties typically include expenses related to “normal wear and tear” of systems and appliances such as indoor plumbing, heating, electrical, dishwashers and ovens. are While some consumers can expect major units such as central air conditioning, refrigerators, and washers and dryers to be covered under a basic plan, these may require additional coverage.

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In addition, the warranty company is likely to deny claims related to “pre-existing conditions” (issues prior to the purchase of the warranty) and damage caused by improper maintenance or use.

Art Chartrand, former NHSCA executive director, says, “My number one piece of advice is to maintain your home. Although warranty companies take a fair approach, he says, the homeowner is ultimately responsible for keeping their home in good condition. Responsible. If you’re a technician and “you come to someone’s house, and you find out they don’t know what an air filter is and haven’t changed it in years, that could be a problem.”

While you can start your home warranty search on company websites and best of lists, they won’t tell the whole story of how to use your coverage. Since some warranty companies have a better history than others, you can get a clear idea of ​​the company’s reputation by checking sources like official websites and customer reviews.

For example, Washington, DC. A consumer alert from the office of Attorney General Carl A. Racine urges consumers to read the home warranty agreement carefully. The warning encourages consumers to know what the contract does and doesn’t cover, beware of exaggerated claims, and get more information about the company, preferably from someone who has worked with it before. .

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Over the years, state officials have also filed complaints against some warranty companies. For example, in 2014, the New Jersey Division of Consumer Affairs filed a complaint against a major national home warranty company for denying claims through fraudulent means.

The company was accused of attributing malfunctions to improper maintenance “even if the technician declared that the covered home system or equipment was properly maintained, and/or improper maintenance or had failed because it was not related to pre-existing problems.” According to the complaint, a customer was told her air conditioner claim would be denied unless she could provide 12 years of maintenance records.

Sites such as consumer reviews, the website for the attorney general in your state, and the Better Business Bureau can be valuable resources for researching the history of a home warranty company and distinguishing those with positive customer reputations and track records. The Better Business Bureau alone lists 85 home warranty companies with ratings of “A” or higher, which can be a good place to start your search.

Are Appliance Warranties Worth It

Jessica Hoff, broker-owner of Century 21 JRS Realty in Clark, New Jersey, has seen mixed results for her clients with home warranties.

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“On the one hand, there was a customer who had a problem with a broken toilet on Friday,” she says. “They called the home warranty company over the weekend, and someone was there Monday. It was a $150 deductible, and they got it all done. It was a really positive experience.”

Meanwhile, another client had a central air conditioning die three days after closing, but the company refused to cover any claims for the first 30 days. “It’s 100 degrees in New Jersey,” Hoff recalls. “It’s the middle of summer, and he has to wait 30 days to cover the central wind.”

It is very common for home warranty companies to start coverage 30 days after the purchase of the contract. Although this will be spelled out in the contract, it is a detail that can easily be overlooked. Waiting 30 days for a new dishwasher can be inconvenient — but waiting that long for a working HVAC system can be more problematic.

Some home warranty plans for big-ticket items may have lower coverage limits, leaving consumers to cover the rest of the bill. Kevin Brassler, executive editor of the nonprofit Consumer Review Institute’s Consumer Checkbook, points to furnaces as an example of an expensive unit to repair or replace, with many home warranty plans covering only a fraction of the estimated costs. are “It’s not complete security,” he says, “and as far as I’m concerned, it’s not peace of mind.”

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Many sample contracts from major home warranty companies list a range of $1,000-$2,000 for work related to heating and air conditioning, while a new furnace or boiler can cost thousands of dollars more. So while consumers can save money with a home warranty, you should still expect to pay out of pocket when something important needs to be replaced.

Additionally, Chartrand recommends that homeowners specifically inquire about any smart devices they own to see what coverage may be available for them. While home warranty companies try to keep up with the pace of technology, he says, coverage options for homeowners with new smart devices can still lag.

“Before you have a few breaks, take a look at your home warranty agreement and become familiar with it,” Chartrand advises. Consumers may be leaving money on the table simply because they forget or don’t know about things that may be covered under their policy. His advice for those looking to get the most out of their home warranty is to always check something before paying to replace it yourself.

Are Appliance Warranties Worth It

“For example, many people have coverage in these contracts for light fixtures and faucets,” he said. “To be honest, I forgot once. I had a nose brake and I went out to buy one and was like, ‘Wait a minute, my home warranty covers it!'”

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Let’s say you avoid navigating the features of a home warranty policy. In that case, you can take the cash you set aside to buy the home warranty and deposit it into an emergency fund instead.

For example, let’s say you purchased a home warranty plan that costs $50 per month and charges $150 for each service call. If your dishwasher needs repair after the second month, you’ll be paying at least $250 before it’s fixed.

If the repair would cost $250 or less, that money might be better off in a savings account that you can draw from when choosing a servicing company of your choice. However, let’s say a dishwasher is needed

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