Home warranties, which have been around for years, originally gained popularity with real estate companies which used them to promote listing services. They promised that warranties would attract buyers and the seller would be protected from repercussions if appliances or systems broke in the days or weeks after closing. Agents also found that home warranties saved occasional sales when they purchased them for buyers spooked by an unfavorable home inspection.

Buyers appreciated the home warranty and they did offer protection to the seller from some post-sale problems, but they probably weren't a major factor in choosing a house or an agent. The early home warranty was also limited in coverage and loaded with restrictions and exclusions. For many years they were a niche product primarily associated with the buying and selling of property.

Now home warranties are bursting out all over, and marketing is no longer targeted to the home seller. Warranties are available for purchase at closing from real estate companies, whether or not they listed the purchased property. Agents are giving one year policies as housewarming gifts to high end buyers. Notably, agents, now familiar with the product, are buying them to cover their own homes. Home warranties are available to everyone and they may be an idea worth considering regardless of the age and condition of your house.

As an example of the current marketing push, Washington Mutual Home Mortgage (a mortgage servicer) is offering its customers the chance to enroll in a home warranty program from American Home Shield. For $27 per month, payable with the monthly mortgage payment, a homeowner can insure his home heating system or heat pump, plumbing and electrical systems (including plumbing stoppages), water heater, dishwasher, ceiling and exhaust fans and more than a half dozen appliances or house components. For another $11 per month the coverage will embrace central air, washer and dryer, refrigerator, and garage door opener Other amenities such as a pool or spa or a well pump can be covered for additional premiums.

When a covered problem crops up, the homeowner does not call his regular service provider but the home warranty company (American Home Shield claims that service calls are received 24/7) which then refers the call to one of its certified contractors. A service call through American Home Shield is $45, paid by the homeowner; anything additional is covered by the warranty, including replacement of the appliance or system. (Lots of * and s.

  • Check out the availability of service. One company we contacted offered no warranty at all in our semi-rural area but others may not be able to deliver truly full service. Ask a customer service representative if there are holes in their service availability or slow response time for certain repairs. If they lack a certified technician for a certain problem will you be permitted to contact an uncertified local tradesman?
  • Is it possible to finance the premium on a monthly or quarterly basis or must the entire year's premium be paid up front?
  • Finally, do an analysis of your appliances and your own attitude in these matters. With a bunch of ten year old appliances (except for the forty year-old dishwasher,) taking out a home warranty, particularly one that could be paid monthly, was a no-brainer. I might not benefit this year or next, but eventually I will be glad I splurged. As with any insurance policy you are playing the odds. Just ask yourself if you will be able to handle paying out $350 per year for five years with only a few covered service calls along the way or if you might be better off putting the premium each year into a special bank account for appliance emergencies.