Are Home Warranties Worth It or Just a Scam?
Ever wondered if a home warranty is truly worth the cost, or if it’s just another scam? The answer isn’t as clear-cut as you might think.
Home warranties are often marketed as a safety net for homeowners, offering protection against unexpected repairs. However, it’s important to understand their limitations before deciding if one is right for you.
Home warranties typically cost between $350 and $1,000, depending on the level of coverage. While that might sound like a small price to pay for peace of mind, there are a few things to consider. For starters, coverage is often limited. Many warranties exclude pre-existing conditions, and if an issue arises, the company may ask for a home inspection report to verify that the problem wasn’t already there. If it was, you’re out of luck.
Another point to consider is that home warranties charge a service fee—usually around $75—just to have a contractor come out and assess the issue. And here’s the catch: you don’t get to choose the contractor; the warranty company does. This can sometimes result in delays or repairs that might not meet your expectations.
Some warranties also have a lag in coverage, often around 45 days after escrow closes. This means that if something goes wrong in that window, you could be responsible for the full repair cost.
Home sellers often offer a home warranty to buyers as a way to reduce their liability if something goes wrong soon after closing. While this can be a nice perk, I always encourage buyers to choose their own warranty if possible, to ensure they’re getting the best coverage for their needs.
So, are home warranties worth it? They can be, but it’s crucial to read the fine print and understand exactly what you’re getting—and what you’re not.
Considering a home warranty for your new home? Let’s discuss your options and find the best fit for you. Contact me today for personalized advice.
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