Buying a house is a big expense, and it is normal to be concerned about what all can go wrong. You may worry about plumbing problems or your air conditioner breaking down, and these large expenses can be a financial drain. This is about the time when someone will recommend a whole home warranty. But, is purchasing a whole home warranty worth it?
What is a Whole Home Warranty?
Whole home warranties act as another insurance policy on your house. These policies cover the repair or replacement costs of items that aren’t generally included in a regular homeowner’s insurance policy, such as plumbing, appliances, electrical systems, and heating and cooling systems. As a homeowner, this kind of coverage can seem like a great way to prevent yourself from being bogged down by large, unexpected expenses; however, Cates Heating and Cooling warns homeowners against purchasing these warranties.
What is Covered?
Basic homeowner’s insurance covers your home’s structure and your belongings if there is a storm, fire, flood, or other event that causes serious damage. Realtors often push for whole home warranties to help homeowners cover the costs of other problems in their homes, such as malfunctioning HVAC units or appliances.
Unfortunately, however, in most cases, whole home warranties are often costlier to homeowners than replacing appliances as they break. This can be especially true when it comes to heating and cooling equipment, because the warranties don’t always cover the replacement of the system.
While a whole home warranty may seem like an easy solution to wary homeowners, many warranty providers have found ways to weasel out of paying for appliances and HVAC equipment that breaks down. Many home warranty providers don’t grant homeowners the funds to pay-in-full for the repairs or replacements that homeowners need, and in some cases, providers will refuse to pay for any part of the appliance’s repair or replacement. In these cases, the warranties will be an additional cost to the replacement or repair of the appliances, so customers don’t save any money.
It is important that you know just what is covered by your whole home warranty before you sign the contract. Some contracts will contain vague language about what is and is not covered. If you are worried about your AC unit, you will want to double check the contract to make sure it will be covered in the event it needs replaced.
For some people, whole home warranties provide peace of mind during the home buying process. However, they may not be as great for those who are trying to be budget-conscious as many people think.
Cost of a Whole Home Warranty
While the price of a whole home warranty may change depending on the provider and where you live, the average whole home warranty starts out at $300 per year for basic coverage. A more comprehensive plan can be around $600 to $800 or more each year. You can also add in coverage for additional things like pools or wells.
If your provider refuses to pay up on the cost of replacing or fixing a broken HVAC unit or refrigerator, you are not only paying for the cost of the replacement or repair, but you are also paying at least an extra $300 per year. Plus, these warranties often exclude appliances that are over a certain age or have pre-existing problems. This is just one reason that Cates Heating and Cooling cautions homeowners from purchasing a whole home warranty.
Whole Home Warranty Services
Unfortunately, when you have a whole home warranty, you don’t get to pick your service provider. If your HVAC unit breaks down, you don’t get to call your favorite technician out to work on the repairs. Instead, you contact your warranty provider, and they send out a contractor. Often, the contractor will be the least expensive in your area. Typically, this leads to poor quality service that leaves homeowners with a bad taste in their mouths.
Advice for Whole Home Warranties
While Cates Heating and Cooling advises against purchasing one, we have some advice for those who want to purchase a whole home warranty:
- Understand just what the warranty will cover in your home. Like insurance, not all coverage options are the same, and you don’t want to find out after your dishwasher breaks down that it wasn’t covered under Some warranties don’t cover certain types of damage, and you want to know just what is covered before you sign a contract and fork over the money.
- Understand all fees associated with the warranty. While the cost of the plan will probably be laid out for you, be sure that you ask about service fees and deductibles. You won’t want to be caught off guard by fees down the road.
- Find out if you already have warranty protection on the appliances and systems in your home before you decide to purchase additional protection. For a lot of brand new equipment, there will be 12 to 24-month warranties that already protect you from the costs of repairs, so you won’t need to shell out more money for coverage.
- Find out if there are any limits on the plan. You’d hate to think that your warranty will cover the cost of a brand-new HVAC system only to find out that they only pay up to $1,500 and you are left to foot the rest of the bill yourself.,
- Find out if broken appliances will be replaced or repaired. Some companies will replace an appliance or system completely if the repair charges are deemed too expensive. In this case, they may only want to pay for the depreciated value of the product, which means you will have to pay more to get the same item put back in your home. Other providers may want to go through with repairs.
If your HVAC unit breaks down or needs repairs and you live in the Kansas City Metro Area, including Overland Park, call Cates Heating and Cooling today at 913-888-4470. A Cates technician will be out to service or replace your HVAC unit as soon as possible. With emergency HVAC services, your family doesn’t have to suffer in the heat of summer or the cold of winter.