In accordance with Global Home USA,”66 percent of home buyers report that the failure of two major items in their home within the first year of possession.” Typically purchased as part of home sale trades, home warranties offer”peace of mind” protection for the failure of appliances and home systems. The popularity of those warranties increases buyers’ concerns regarding the load of expensive maintenance and repairs in the early months and years of homeownership. In California, 90 percent of home sales consist of home warranties. Broadly speaking, the policies are relatively inexpensive. However, not all of repairs are insured, so it is important for the warranty holder to comprehend the contract’s pros and cons.

Guru: Discounted Service Calls

A typical component of home guarantees is a diminished, flat-rate fee for support calls that provides significant savings over the common costs of repair appointments. Service prices often can be reduced further when contract upgrade options are selected.

Guru: Big Savings on Common Repairs

Standard warranty contracts include repair or replacement of many of the appliances and systems that many commonly neglect. Examples include kitchen ranges, electric systems and plumbing fixtures.

Guru: Possibility of Enhanced Coverage

Most providers offer users a number of program options. For additional charges, guarantees can be enlarged to include repair or replacement of such items as pools, spas and multiple air conditioning units. Additionally, policies might be updated to pay preexisting conditions–conditions that occur before the policy was in force.

Con: A Few Home Types Might Not Be Covered

Mixed-use, commercial/residential properties might be excluded. Additionally, it might be impossible to get a warranty for a mobile home or other residence not attached to a permanent foundation. Also, it’s unlikely that policy would be extended to homes not owned by the warranty holder (dorms, leased homes and timeshares, for example).

Con: No Guarantee of Replacement vs. Repair

The warranty provider, not the homeowner, decides whether a covered appliance or system should be replaced or repaired. It follows that even when the appliance or system is obsolete, it is possible (and maybe even likely) that it will be repaired rather than replaced.

Con: No Choice of Repair Service Providers

Warranty suppliers contract with service providers. Homeowners can’t pick their own. Nor can they generally dictate the period of time within which fixes will be produced, even though the warranty provider might incorporate a time range in its own contract.

Con: Policy Exclusions May Leave Buyer Vulnerable

Warranties cover operational failure of appliances and systems only under specific conditions, like after normal usage, once the appliance or system has been properly preserved by the homeowner. Conditions brought on by acts of nature or acts of God might be excluded, as they’d probably be covered by the homeowner’s hazard insurance. What’s more, there are caps on how much warranty providers will pay per appliance/system, per incident.

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