It's Saturday morning. With cup of coffee in hand, you flip open the blinds and gaze out at your backyard. Despite the sunny morning, you notice standing water in the corner of your lawn.
Your heart sinks as you realize the water is your flooded leach field.
The home warranty contract you had when you first bought the house a year ago would have covered this, but you opted not to renew it last month.
What is a Home Warranty?
Home warranty is a service contract and covers wear and tear related repairs or the replacement of important home system components and appliances that break down over time.
Home warranty protects you and your family from bearing extreme expense and hardship from breakdowns not covered by your home insurance policy. Plans vary and can cover major home systems such as air conditioning, heating, electrical and plumbing as well as major home appliances such as kitchen ovens, stoves, refrigerators and washers.
"I'm never going to have to pay for anything again!"
This isn't true.
Home warranty service contracts can cover a lot of major repairs or replace important systems and appliances, but only if you're signed up for the right one.
And there are a lot of companies out there advocating on behalf of these service contracts and the warranties they offer, and just like anything, they're not always truthful and the expectations they set with consumers can be misleading. They advertise that, under their umbrella policies, homeowners will never have to pay out of pocket again for repairs and services for their homes.
This isn't true.
Unfortunately, there are a lot of gross misrepresentations within home service contracts and the advertisements promoting them. Where, homeowners are led to believe if they spend more for what looks like an all-inclusive contract, they'll never have to pay for repairs or services to their home again, no matter what they are.
This isn't true.
The Honest Benefits of Owning a Home Service Contract
1. The ability to call on a network of available pre-screened contractors for whatever their specialty is.
Instead of choosing a contractor blindly, a home service contract includes the right people to call on for the right jobs, mitigating the frustration of doing your own, unadvised research and dealing with the costly repercussions of illegitimate contractors who overcharge or are unfit to do the job. Not to mention, you'll never be covered for an all-out replacement.
2. Built in dishonesty detector.
In the earlier example of the flooded leach field, the service company the homeowners call on independently – because they no longer have the benefits of in-network contractors included in a home warranty – could falsely charge them. Instead of only replacing the sewage ejector pump causing the problems, the contractor might also cite septic tank malfunctions and replace the line from the house. How would the homeowner know?
Most homeowners don't have the time to manage what a contractor is doing or the knowledge to determine what repairs are needed and which are unnecessary. They just know they need it fixed. Home service contracts and their representatives are motivated to do the right thing on behalf of the homeowner, because they are the ones who are paying for it.
3. If you pick wisely, you really will save money. Home service contracts really do pay claims.
The best part about home warranty is when the consumer walks away without penalty for wears and tears that naturally will happen to their home over time. Protect yourself, your family and your home by preparing for – not if, but – when your home systems and appliances malfunction or need repair or replacement.
As with most warranties, it's when you don't have one and need one that you wish you did.