Should I Renew My Home Warranty?
By Steven De Nazareth
Updated: May 21st, 2019
Do you possess a home warranty program? Chances are, if you are a new homeowner, you likely do. But after you have been in your home for a year, you are likely speculating if you should renew your home warranty or not. So many families get themselves in the same situation and expectantly this article will be able to offer you some help.
In all possibility, when you bought your home you obtained a home warranty covering a range of items in your home, i.e. roof, air conditioner, appliances, heating and plumbing systems, possibly your spa/pool etc. If you had a great Realtor he or she can get the seller to pay for the warranty. So here you are approaching date and questioning if you should renew it or not.
Consider Your Options
Firstly all you should ensure that you inspect your situation properly. This means that you must be careful not to purchase too much insurance or procure coverage for items that you don’t have. So many times, people buy coverage for things like home telephone wiring when they don’t even have a home phone or landline any longer.
For some people, they do not have sufficient money in their savings to pay for a major system repair like an HVAC system. That’s the same thing as a heating or cooling system. You also require making sure that you only purchase home warranty coverage for your heating and cooling system if you don’t need for your kitchen items and refrigerator covered as well. Or in case you are not bothered about the AC going out, you may only require coverage for your other major systems and appliances.
Majority of first time home buyers get to the end of that first year and feel like they want to take the chance on not having a first home warranty. And the reality is, many of them won’t. But for some people, anything that can happen will happen if luck is involved. So for them making the choice to renew is a no brainer.
Things to Consider When Renewing
We all are familiar in these economic times coming up with $350 to $600 is a lot of money for most of us. If you certainly did not have to pay for the initial coverage, then there is a doubt that you paid much attention to the cost of your home warranty. No doubt, you had to pay the $50 – $55 service call if you had one and that likely felt like a fine deal, particularly if you had something major go wrong like your hot water heater going bad. Maybe you didn’t have any service calls at all and now you are faced with this renewal expense and there’s a good chance you’re saying “I don’t think so”.
For people who reside in older house, age is definitely a factor to consider. How old are your appliances, your AC and heat pump, the filter motor for your pool, hot water heater, your roof, garage door opener and some of many other things that a home warranty can cover.
You must also factor in the additional costs of the service calls; they have a means of adding up if you have 3 – 4 of them in a year. These certainly are costs over and above the cost of the warranty itself. Study the fine print of your policy before you renew to be sure the items that you may be worried about are really covered. Some of the items you desire to be covered are not in the standard policy but are considered “optional home warranty coverage and have supplementary fees. You may have more than one surprise and can be very disappointed if you find out the warranty did not cover “that specific” item. You should opt for the broad outlook of home warranties to take your call.
The additional thing, as a homeowner, you must know that if you don’t have an existing home warranty you can always acquire one. These companies don’t just cater to the new home buyer of a resale home. You can procure a home warranty any time, but you recognize that there will be a 30 day waiting period for it to go into effect.
One way to deal with the query of your right to renew is to just ask the contractor you work with, whether it’s a real estate professional or a home warranty company. If the home warranty that is being offered to you for consideration does not permit you to renew without the company’s consent then you must compare that service contract to others which would allow you to renew freely. It is never a benefit to have a home warranty contract that does not guarantee your right to renew. Actually you risk a lapse in home warranty coverage if you purchase a home warranty that does not guarantee you the permission to renew. Your next home warranty might not provide you instantaneous coverage after buying it, which would leave you with a period which any repairs required, would be 100% out of pocket.
It might appear like you are getting ahead of yourself by distressing about the renewal of contract you might not be interested in renewing. Although you just give yourself the choice of renewing you are better off than being refused or canceled renewal. Never let your policy lapse. You can continue renewing your policy for the period of time in which you own your home, except if you have had lapses in home warranty coverage.
Normally, consumer expect more from plans that they deliver. But, you should know that how warranties are not insurance policies. The service contract covers repairs to your computer like a home warranty. This is a company’s agreement to pay for fixing and replacement of specified home components.
When you buy a home warranty, you should know about the coverage that you have. This means if you buy a new home, home appliances and systems would have a one-year warranty. Most states require builders to warranty the structural elements of a home up to 10 years.
So, how much is a home warranty? Usually, the average cost of a basic home warranty coverage plan is from $350 to $600 a year. Additionally, you can opt for an enhanced plan adding $100 to $500+ based on the desired amount of additional coverage.
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