Home Warranty Problems

A home warranty is commonly offered to a new home buyer by a seller or real estate agent. It is an insurance policy on the appliances and plumbing system in the home. But there are a few problems with this service.

Deductible

Like many insurance policies, you have to pay a deductible of about $25 to $75 each time someone has to come for a visit. This could be more expensive than the cost of fixing a small problem.

Network

Many home warranty companies will only allow you to use an approved provider through their networks. It can sometimes be difficult to find a reliable repair person in your area that is in-network.

Coverage

If you do not read the home warranty agreement thoroughly, you could find yourself in a situation where the repair is not covered. For example, home warranty companies won't normally cover problems that existed before you moved into the home.

Up to Code

If your appliances are not up to code, the repairman and home warranty company might require you to update it, at your cost, before any work is done on the unit.

Replacements

Home warranty companies prefer repairs instead of replacement because it is less costly. They might push hard for a repair (even if it does not seem like the patch-up job will last long) and refuse to pay for a replacement.

References

• MSN Money

Resources

• Popular Home Warranty Services
• The First-Time Homeowner's Handbook; Atlantic Publishing Company; 2006