What good is a home warranty?

Kate the Peon asks:

So, my home warranty expires pretty soon here (2wks). It's $423 to renew it for the year. While I've used it during this first year in the house, I don't know that it's been of much benefit. I know you've said in the past to renew, but can you explain why? I really should replace my furnace this summer, and I don't understand how the home warranty can help me with that.

You should read the terms of your home warranty, but on the ones we had, if our furnace had broken, the home warranty would have replaced it for just the cost of the $40 service call. So, that seems worth it.

We did not renew the home warranty on the house we are living in now only because I thought I had but I hadn't. It would have covered our recent bathtub leak through the ceiling, our broken toilet, our leaky faucet and something else that went wrong but now I forget what. All those things together were definitely more than the cost of renewal.

It just seems like nearly every year, the home warranty has been worth it. Maybe once or twice it wasn't, but I don't recall ever feeling like I didn't get my money's worth, even with a handy husband. If I lived alone, I definitely would renew.

Also, shop around. For a condo, that price seems high. I think that is what we were paying for our house.

Comments

[EntrepreMother]

Hey Peon
In the spirit of opinions being the absolute, you should definitely renew. A former real estate agent, 12 years slave to the biz, I believe that as long as you pick a well-known, national company then warranties are pretty sweet deal. Its a well known fact that the month following your decision to not renew or failure to renew, something in your house will blow up, drain on to your wood floors, come through the ceiling or out of the toilet and you'll be left with a bill much larger than $423. Check with the home warranty company about the condo price Michelle mentions. However, many warranty companies don't have a pricing structure on the design of your home (condo vs. house) or even a price on the square footage either but have one price for all homes unless your square footage is in the 'xtra large' category. Some warranties don't cover everything either so check the fine print. For example, many warranties have a separate fee for washer and dryer coverage. I got a free washer from my warranty many moons ago cuz I was lucky enough to have the coverage. Call the company and let them know you're shopping providers before renewal and see if they'll cut you a deal. Its worth a phone call to find out. Good luck.