Money Talks News: Beware: Home warranties

Money Talks News: Beware: Home warranties
(Source: Money Talks News)

Money Talks News - You expect a warranty with a new car, but did you know you can also get them with a home? However, some home warranties may be a good buy, while others could be a bust.

The air conditioner, the fridge, the roof, all expensive parts of a home to repair or replace. So should you buy a home warranty?

Home warranties sound like a magic bullet, but they often do not live up to expectations. Here is what you need to know when you are looking at one:

First, what is covered: Usually bigger stuff, like appliances and A/C systems.

Second, who is doing the work: You often have to use specific service providers.

Third, cost: A typical policy will run you about $400 to $500 a year, plus a service fee if you make a claim.

And the most important thing: Exclusions. For example, plumbing may be covered, but not a septic tank. Or your fridge, but not the ice maker.

Also, if you do file a claim, expect some push back.

For example, say you had a home warranty when you bought a house. The refrigerator broke during the first year. Repairman comes out, but denies the claim.

Why? He said the coils were dusty under your refrigerator. Therefore, you had not maintained it properly, therefore they do not have to pay.

That example might make it the last home warranty you would ever buy. But if you are going to go forward with one of them, follow these steps:

Step one: Check the Better Business Bureau for complaints, as well as other online sources.

Step two: Read that fine print, paying special attention to exclusions and co-pays.

Step three: Know how to cancel if you decide to get out.

Your home is a huge investment and maybe looking at a home warranty makes sense. But be careful. Read the fine print.

You can get some more information, too, by going to the Money Talks News website and doing a search for "home warranties."

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