Home warranty can cover unexpected costs

Owning a home can come with unexpected repairs, and a home warranty is one way that consumers can protect themselves from costly surprises. Still, many first-time buyers pass on purchasing a home warranty to avoid the additional expense.

Realtor Carrie Calhoon, with Reece & Nichols, advises her clients to make a decision on a home warranty purchase when they close on their home.

“If a buyer is going to purchase a home warranty, I suggest that it is done when they purchase the home. Some people may decide it’s not worth the cost if they are buying a home that has been recently updated. For instance, a home with newer furnace, air conditioner, water heater, plumbing and electrical probably wouldn’t benefit from a warranty,” Calhoon said. “Take into consideration the age of the home you are buying.”

However, consumers who are building and will be unable to put their home’s system components to the test until after they’ve moved in might benefit from a warranty despite its new construction.

“There’s a warranty available for new construction that is good for five years,” Calhoon said.

A warranty can provide peace of mind and budget protection during a time when finances are often tight anyway. A seller may even consider purchasing a home warranty for a home they plan to sell to add appeal for potential buyers and to protect themselves from the repair costs of any unexpected problems that may be found during inspection while the house is on the market.

Although purchasing from the get-go extends the protection a home warranty offers, even consumers who have been in their homes for many years and have no intention of selling can benefit from a home warranty, which can be purchased at any time during ownership.

Calhoon says that the majority of warranties offer protection for a year, although two-year warranties are also available.

“The most important thing to do when choosing your warranty is to read the information and pay close attention to the details as far as what is covered or not covered,” Calhoon said.

Capri Kent, senior account executive with American Home Shield, sells warranty products and agrees with Calhoon.

“Home warranties provide repair and replacement services for major appliances and home system components that break down over time due to normal wear and tear,” Kent said. “Covered items vary by provider and plans.”

Kent says that the warranties consumers can purchase from American Home Shield typically cover such components as refrigerators, cooktops, washers and dryers, as well as HVAC, electrical and plumbing systems.

She stresses that even the best plans don’t cover some items, such as permit and disposal fees, malfunctions not related to normal wear and tear, secondary damages, and code modifications.

Other items that may not be covered include sewer lines and roofs, as well as pre-existing issues.

“We outline those in our agreements as well as online, and always encourage our customers to contact us if they have any questions about what’s covered and what’s not,” Kent said.

Kent says that over the course of a one-year agreement, most customers use their warranty at least twice during that time.

When a claim needs to be made, customers can file online or over the phone. American Home Shield has a network of local, professional contractors that then contact the homeowner to set up repair appointments.

The contractor determines the cause of the breakdown and what repairs are needed. If the item and cause of repairs are covered by the warranty, the contractor will make the repairs. If a covered item is not repairable, American Home Shield will provide a replacement.

“Purchasing a home is one of the biggest investments in a person’s lifetime,” Kent said. “Many home warranty plans offer varying coverage levels so that homeowners can choose the level of protection that’s right for them.”

Kent offers the following advice for anyone considering the purchase of a home warranty:

• Homeowner’s insurance is different from a home warranty plan. Insurance covers natural disasters, but it doesn’t protect you from the natural wear and tear that your home’s major systems and appliances go through during the aging process. A home warranty covers items that are likely to break down over time.

• Not all plans and providers are created equal. Choose a provider with a variety of plans and options so you include the home system components and appliances that matter most to you. Some lower-priced plans may have higher service fees or limited coverage, and even the best plans include some non-covered expenses.

• Home service plans can help protect your budget. According to GOBankingRates.com, 58 percent of American households have less than $1,000 in savings, which means that an unexpected repair expense could cause serious financial strain. Instead of paying full retail cost to repair or replace a covered item, a home warranty helps homeowners manage the costs of unexpected breakdowns.

• Take the time and stress out of finding a contractor. Choose a provider with a broad network of professional contractors to save you from the stress of managing a home repair.

Shanna Sloyer is a freelance writer from Topeka. She can be reached at ssloyer@yahoo.com.