Here's hoping you're enjoying your Labor Day weekend! Time for back to school and cheering for the New England Patriots.
You may have recently seen a home warranty company's TV commercial that asks, "Why pay for something that MAY happen when you know WHAT will happen?" This question seems to imply that you would be better off to buy less home insurance coverage or increase your home insurance deductible and put the savings toward a home warranty service. If this is the implication, it is a misleading one. Here's why.
What is a warranty?
Webster's dictionary definition: A written guarantee given to the purchaser of a new appliance, automobile or other item by the manufacturer or dealer; usually specifying that the manufacturer will make any repairs or replace defective parts free of a charge for a period of time.
For years, automobile manufacturers and dealers have offered warranties and promoted their differences from those of competitors. More recently, they have promoted the sale of EXTENDED warranties - contracts that offer continued repair and replacement parts services for an annual charge.
What is a home warranty?
In tune with the economic times and accelerating costs for parts and labor, dozens of new home warranty companies have emerged. They offer a wide variety of plans and coverage options. Essentially, for an annual contract charge, these plans take over repair and replacement coverage on household items and systems when manufacturer or dealer warranties expire, or on household items and systems not previously covered by a warranty service agreement.
What types of items are covered?
Home warranty plans vary widely in their coverages and terms of agreement. But, generally speaking, most home warranty companies offer protection for major home systems: plumbing, air conditioning, electrical and heating; and for appliances such as water heaters, refrigerators, washers and dryers, dishwashers, stoves/ovens, garbage disposals, and ceiling fans.
Home insurance and warranties are distinctly different
Home insurance policies cover the home's structure and contents, and cover personal items, including electronics, jewelry, clothing, furniture and décor. Policies also include coverage for liability claims and temporary housing expenses in the event of a fire or natural disaster and during repairs.
Home warranties cover just specific items and systems for repair or replacement. Importantly, a warranty DOES NOT repair or replace items that have been damaged due to disaster or misuse. Only those items listed in the terms of the agreement that fail due to normal wear and tear will be repaired or replaced.
Peace of mind with "whole house" protection?
Depending on your considerations like the age of your house and its home systems and the age and condition of your major appliances and your big ticket items, it might be worth checking out home warranty options. A proper, affordable warranty solution can be an ideal complement to your home insurance protection.
The consumer affairs.com site is one good place to visit for additional information about home warranty services. The site includes ratings and customer reviews for a number of home warranty companies and their specialties.
If you would like the peace of mind of a comprehensive review of all your current insurance coverages and your current needs, we would be glad to help. Just give us a call to set up a convenient appointment time.
When it comes to insuring your family's home, vehicles, possessions and lifestyle, we take our responsibility to keep you properly protected very seriously. The trust you placed in us when you chose the Keefe Insurance Agency means you count on us to keep you informed of things you can do to avoid potential claims.
We are always available during business hours to answer your questions or address your concerns. Stop by or call us at 508-528-3310 or toll-free at 888-528-3310. There is also additional information available 24/7 on our web site for your convenience.
Bob Keras & Peter Brunelli
Keefe Insurance Agency
Bonus! Did You Know?
What do home warranties cost?
It depends on what your warranty covers - what major items and systems you have chosen for coverage, their age, your location, how long the extended home warranty will apply, etc. Some agreements may cost under $100; others several hundred dollars a year. You should know that you will be charged a trade service call fee which is the amount due to the contractor when they visit your home to assess a claim problem
How is repair work handled?
Most home warranty companies require the use of their designated service providers. They have a vested interest in making sure the work is properly completed and at a reasonable fee. Homeowners benefit because they are relieved from the burden of finding someone qualified to do the repair or replacement.
Will I be reimbursed if I fix it myself?
No. Neither will you be reimbursed if you hire your own contractor.
What if I'm not satisfied with the repair?
It is important that you check the contract for a satisfaction guarantee. Find out if the company will send out a different contractor if you are unhappy with the service and if you'll be expected to pay an additional service fee or not.
Are there reasons my claim might be denied?
Yes. The most common reasons:
1) Improper installation or maintenance. The appliances and systems need to be in working condition at the time the warranty takes effect.
2) Unusual wear and tear. If the item shows evidence of improper use, your claim may be denied.
3) Code violations and permits. For example, if your components or electrical system fail to meet local building codes, the warranty company won't necessarily repair them. Most companies will not complete work if a permit is needed, and only a few pay permit fees.
Can I replace a covered major appliance with the same brand, same features, same value?
Not necessarily. The rule for many companies is to replace an appliance with "one of like function."
Be careful when choosing a home warranty company. Make sure you understand their coverage requirements and agreements. Make sure it matches up with your needs.
Every company is different. There is no "one size fits all." Each sets its own rules about which items they will and won't cover and how much money they will provide for repairs or replacements.