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Wednesday, March 23, 2011

Home Warranty Plans

Making sense (and cents) out of home warranty protection plans can be daunting.  Many people often struggle with the question, “Are home warranty plans worth it?”  Or, “Aren’t they all about the same?”  It was suggested that I address this issue and I readily agreed.  What started out as a simple blog post has undoubtedly become Part 1 in a series.

I was at the gym the other day and ran into a friend. He mentioned his water heater had exploded that morning, but he wasn’t concerned.  He had a home warranty protection plan from Old Republic.  He called them and within 24 hours he had a new water heater.  His cost?  Just the standard trade service fee.  Not bad for a new water heater.  He said he’d never own a home without a home warranty, and in fact, one plan bought him a new air conditioning unit.  Not a bad investment.  If only all of our experiences were as positive.

I’m often asked about how to select the best plan.  The answer isn’t nearly as simple.  All home warranty plans are not created equal.  Most offer several tiered levels of coverage with some items being covered and others not at all.  What may be included with one company may not be covered with another.  Some companies include the kitchen refrigerator and ice maker.  Others make that an add-on for an additional fee.  Depending on what is not working, some companies will try to fix it, while others will get it replaced.  Trying to figure out what’s included and what is not is next to impossible. 

It’s important to read the fine print, ask other homeowners for their thoughts and recommendations.  Another great resource is the trade provider – ask a plumber, electrician, HVAC company what their experiences are with home warranty companies. You’ll get the real low down and some great advice. 

And, it goes without saying, but one integral piece to selecting the right plan is obviously the service and follow up provided when you need them most.  Like anything else, we all have our favorites, but it was interesting to really delve into the plans of a variety of companies and make some general comparisons. 

Like my friend at the gym, I had to call my home warranty company recently on both my ice maker and my dishwasher.  Getting the ice maker up and running was a complete night mare that included a number of phone calls from service technicians the home warranty company contracted with that finally said they didn’t work on my brand of appliance, visits from plumbers (two trips) and electrician, countless emails and calls to my home warranty area service rep, scheduling drywall repair people, personal time off work and repainting my dining room (at my expense).  Hey, but I got ice, right?

My dishwasher, which may be the very first one ever made – ever - was not getting the glasses cleaned and I had to wash the dishes before I placed them in the rack.  The home warranty plan contacted a great appliance repair shop I’ve come to really like and recommend to others – Frost Appliance.  They ended up having to order a plethora of parts to get it to work properly.  My repair guy told me that because of my home warranty, they had to try to fix the appliance rather than recommend a new one even though Maytag is no longer in business and the cost of parts had escalated significantly more expensive - and the home warranty company had to approve any repair.  So, once again, the repair man left and it was a waiting game.  A week or so later, and another personal day off to meet the repair people, I’m back up and running.  I just had to think that a new dishwasher was properly a better investment over time, but I’m just the homeowner.  I still scratch my head and wonder at what point do you just bite the bullet and replace the darn thing with something that works, won’t break and is more efficient?  

Guess that’s what some home warranty plans are counting on – They're hoping you go out and get a new one yourself!

Watch for future posts on home warranty companies – I’ll do some basic comparing of a handful and point out some differences that will surprise you.

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