Do I really need a home warranty?
The real cost of home warranties
A home warranty is a form of insurance intended to save you money when your water heater breaks unexpectedly or your dishwasher suddenly stops working.
But that’s not always how things work. While warranties may look great on paper, homeowners are often taken for a ride when it comes to extra costs, repair exclusions, and poor quality.
Let’s talk numbers.
A basic home warranty averages $350 to $600 per year. Extended coverage adds $100 to $500 to that yearly figure. When budgeting for a warranty, though, homeowners must consider additional pay-per-play and situation-specific costs.
Anytime you need to use your warranty, you’ll pay a flat-rate service fee that could be $100 or even $200 per visit, according to USA Today. Despite this, the resolution of your issue isn’t guaranteed. The service fee is the cost of walking through your door, even if it’s a five-minute fix or nothing can be done. If more than one type of technician is required, you may have to pay a fee to each of them.
If a part or system in your home breaks down, you’ll likely be required to pay a deductible before receiving any financial assistance. The exact amount of your deductible will vary according to the terms of your warranty. However, Forbes estimates it to be between $50 and $125.
And what of big-ticket items? Oftentimes, warranties will have claim caps in place. Say you need to replace an AC and furnace system. The cost is $9,000, but the company caps its liability for any one claim at $2,000. You’ll be stuck with the tab for the remaining thousands.
OK, but they will fix most things, right?
Not even close. Your HVAC systems, septic tanks, roofing, and foundation might be covered by premium warranty, but a standard one will exclude these more expensive repairs from coverage.
Exclusions vary among companies and programs, but it’s safe to say pre-existing conditions are a non-starter. Within a home warranty context, pre-existing means that an appliance or system began failing before the start of coverage. Ninety-nine percent of the time, you’ll end up footing the bill for pre-existing conditions; at best, your warranty company will require tedious, detailed records before agreeing to repair or replace anything.
You may find your claim rejected outright if you can’t show a broken item has been maintained in accordance with the manufacturer’s guidelines. Since what constitutes “properly maintained” is highly subjective, this clause is often the cause of disputes between the homeowner and the warranty company. And if, say, the previous owner didn’t take care of the appliance, the new homeowner is left hanging.
Repair v. replacement
The warranty provider decides whether a covered appliance or system should be repaired or replaced. This means that, if at all possible, they’ll opt to save money on a repair versus a full replacement. Since repairs don’t last as long as replacements, you’re likely to face more expenses in the near future.
You’re not paying for quality.
A warranty is only as good as the company that stands behind it. While some homeowners find their providers are responsive and professional, others are disappointed with the speed and quality of work. Homeowners have little to no control over repairs, including who does them and which brands are used.
Since warranty providers contract with service providers that keep costs down, you may end up the victim of shoddy workmanship. Similarly, expect the parts used for your repair to be from an inexpensive brand of the company’s choosing — not one you would pick. Even so, your contract bars you from taking your warranty provider to court. Disputes of quality or cost are instead resolved by arbitration tribunals, which aren’t exactly known for being fair.
Filing a claim
If you need a quick fix or have an emergency on your hands, brace yourself. By the time a warranty company has sorted through the paperwork of your claim and arranged for the approved service, you may end up paying for urgent work and parts yourself. In the middle of summer, warranty customers can wait as long as two weeks to have their AC fixed.
So do I need a home warranty?
Not with PreFix.
The primary benefit of any home warranty is peace of mind. If something breaks, you know that a professional will come out and fix it. But at what cost? For all the reasons above, you’ll end up losing more money, time, and sanity with warranties than they’re worth. Consider PreFix instead.
Our costs are low and consistent. Just $40 per month gets you access to semiannual preventative maintenance checks and $40 service fees. Our response is always timely and our quality is premium. If your project requires parts, we always charge wholesale prices with no markup.
Even better: No repair is excluded, even pre-existing conditions. You don’t need to pay more to cover specialty systems and appliances, either — it’s all included with membership. And in the rare case we can’t do the job ourselves, we’ll find you a trusted contractor at the best possible rate and manage the project through completion.
PreFix neatly replaces a home warranty. Say goodbye to repair exclusions and surprise costs. Say goodbye to random contractors who couldn’t care less about you or your home. One call and you’ll see why we’re the smart, local, trusted choice of Austin homeowners.