What is a Home Warranty?

Not Insurance

A Home Warranty is not your homeowners insurance. A Home Warranty is a contract designed to protect you from unexpected costly repairs or replacement of appliances in your home. The contract is generally for a year. The monthly premium ranges from $40 to $70 per month and depends on which appliances and systems are included in the contract. There is also a deductible of $75 to $100 for each repairman visit to repair or replace an appliance.

What’s The Pitch?

This is the pitch from Home Warranty of America (HWA): “Imagine you’ve been using that lovely new refrigerator you purchased last year and then suddenly, as soon as the manufacturer’s warranty expires, it dies on you. If you don’t have a home warranty, it may cost you hundreds or even thousands of dollars to fix or replace it.

If you have a home warranty with HWA, you can file a claim online or with our customer service team and we’ll take care of the rest. Once the claim is received, we’ll connect you with an approved service provider to assess the problem and your appliance or system will be fixed as quickly as possible.”

What’s the Reality?

The reality is that they are a for-profit company that needs to show a profit. If you need too many repairs or your repairs are too expensive, they will not renew your contract or they will find reasons not to make the repairs.

Read the Fine Print! Gotcha!

Here’s what happened to me with my Sears Home Warranty. I had an old but in good condition Subzero refrigerator. Some of the vegetables in the vegetable drawers were freezing. I filed a Service Request online which was approved by a Sears representative. Then the first glitch occurred: Sears could not find a repairman in my area who could repair a Subzero! They said I would have to find a repairman, which I did in a town 50 miles away.

The repairman said the refrigerator needed a heater component specifically designed to keep the drawers from getting too cold. There was no other solution. Sears approved the visit by the repairman but then reneged and refused to pay for the visit or the $250 part stating it was a manufacturing defect that the manufacturer should repair. Since the fridge was long since out of warranty, I was out of luck.

Another Chance!

Shortly thereafter, the blower on my stove top started making a loud noise. I contacted Sears with the Thermador model number and was told it was not covered. Why, because the blower was UNDER the stove top in a cabinet not over top of it! Specifically they stated:

Thank you for contacting us.

Upon review of your agreement, we cover a self-contained range exhaust unit located above the range. Please be advised there may be a cap limit on your appliance as it is classified as an ultra-premium appliance.

Refer to  IV. General Exclusions and Limitations, Item 7 wherein it states:7. This Agreement does not cover any of the following: repair or replacement of systems, appliances or components classified by the manufacturer as commercial-grade. In no event shall we be liable for claims in excess of $1,000 in the aggregate, per agreement term, per commercial-like or ultra-premium appliance including, without limitation, brand names such as Bosch, Dacor, Delfield, Fisher & Paykel, GE Monogram Series, Jenn–Air, Meile, Sub-Zero, Thermador or Viking (individual trademarks are owned by the brand name company).

Upon further review of the information you’ve provided, the model number shows the cook top is independent. If the cook top is independent it is not addressed by your warranty. Please refer to your Agreement, Section II. DEFINITION OF ITEMS, 1. Kitchen/Laundry Appliances, paragraph 2 wherein it states: Examples of Items/Conditions Not Covered: Automatic deodorizers; buckets; commercial units; damage to clothing; doors; door cables; door glass; door seals (other than for front load washers); drawers; drip pans; exhaust fan not solely for venting range/cooktop fumes; filters and screens; food spoilage; standalone or self-contained icemakers and ice/water dispensers; external water supply lines; independent telescoping range exhaust; interior lining; internal shelves; knobs and handles; light bulbs and fixtures; lock and key assemblies; panels and/or cabinetry; racks; removable minitubs; rollers other than clothes dryer drum rollers; rooftop exhaust units; rotisseries and probes; secondary units; shelves; springs; stand-alone freezers; structural components; timers and clocks (oven/range clock-timers are excluded unless failure prohibits normal cooking function); trays; dishwasher and trash compactor tubs; venting; conditions of water flow restriction due to scale, minerals and other deposits. We hope this information was helpful. Sincerely, Marcos Customer Support Services

Cancel Contract

That was enough for me and I cancelled the contract. But be aware before you cancel that your home warranty contract is for a year. If you cancel before the end of your contract term (12 months), you will have to refund the cost of any repairs paid for by your home warranty company during your year long contract period! So if you had a plumbing repair that cost $270 and they paid $170 (Remember you have to pay a deductible.) you will have to refund the $170 to the home warranty company if you cancel before year end–even though the repair was made perhaps several months before cancellation.

Little Wiggle Room in Home Warranties!

Post Script

There are times when a ‘fair’ home warranty contract can be worthwhile. If you travel frequently or have a rental, a home warranty can be useful! Here is a link to the best home warranties of 2019. Be thorough in your research and read the fine print carefully!