Home & Garden Columns

About the House: Is a Home Warranty Right for You?

By Matt Cantor
Friday April 07, 2006

Buying houses is an expensive proposition as anyone who has ever done it can tell you and it doesn’t stop when you pay the closing costs and put your boat in the backyard (you really have a boat?) 

So many houses I see folks buying these days truly qualify as fixer-uppers. It seems that in this buyer’s market (will I still be using this term in 6 months?), people will buy anything that doesn’t wobble too severely. I genuinely think that if the inventory, as they call it, were significantly higher, many of the dogs that get walked around the arena would get left at home and never even get those funny haircuts. 

The houses that would be up for sale would tend to be more select and less dicey. As it is, though, many, if not most have a large pallet of defects from which to choose. “Will Madam be having ze leaky dishwasher zis evening or peut-etre, le ground disposer de garbage (featuring le chanson de heavy metal)?” 

When faced with these potential trials, one wonders whether a Home Warranty might be the solution. Certainly it is worth considering. 

My friend Bonnie Ross, a realtor at Coldwell Banker in Montclair says that she regularly buys these for her clients because, as she says, “they haven’t got a penny left when they’ve bought the house so it can help them when things go wrong.” 

Bonnie says that the warrantee company she uses calls her (since she buys the policy) whenever a repair is called for by one of her clients. This has enabled her to track the usage of the policy and has found that most people use the policy at least once in the first year. She’s also noted that occasionally a client will use the policy as many as four times and few fail to use the service at all. 

She says “So its an insurance policy and I’m not crazy about insurance policies but it can help.” 

One of the problems inherent in this whole business is that you as the homeowner don’t have any say in who they’re going to send when you call in with a problem. 

Amongst the many anecdotes I’ve had shared with me over the years have been several about less than sterling workers who got sent to their homes. Scheduling is often cited as a problem but other deficiencies can attend as well. 

If you were an insurance company and wanted to try to retain as much of that $250-$300 that’s typically charged for a one-year policy, you’d be likely to find the cheapest plumber you could get your hands on to go over and fix Mrs. Mickiewicz’s leaky water heater. 

So what this means to you as recipient of one of these policies is that you might not be getting the best tradesman in town when you call in your claim. 

This is, of course, a generalization but I think that the logic is sound and that you’d do well to pay close attention to the workmanship and the decisions made for you by this person. I’m sure that your home warranty company does not want you to have a bad experience but they are sure to want to control costs. 

This also expresses itself in another form. Virtually all of these companies reserve the right to repair, rather than replace, any defective system. This means that you won’t be very likely to get a new furnace if the old one can be repaired enough to hobble one more mile. 

Again, this doesn’t mean that you’re going to get a substandard repair (although that can happen) but it does mean that the sort of decision you might tend to make when consulting with a paid tradesman might not be the chosen path when the warranty company is in the driver’s seat. You just won’t get a say in how it’s done. 

Now, that said, it is not uncommon for the person making the repair to try to sell you on some additional services once they have your attention. This is, of course, your choice but be sure that the argument seems sound and that you’ve called the warranty provider to be sure that they won’t cover the other option. 

When you call for help, you will generally pay a small “co-pay” or basic service call fee, which is usually quite reasonable and probably under $50 bucks. This helps cut down on people calling for any odd sound that comes out of the dishwasher. I think it’s fair. 

You also have a range of choices when buying such a policy. A basic policy will cover most of the following: Heating (and ducting with a forced air system), water heater, electrical system (what’s in the walls), plumbing, appliances such as dishwashers, disposers, built-in microwave ovens, stoves, garage door openers, central vacuums (not a lot of those around here but nice if you have one) and exhaust fans and door bells.  

If you want to pay an extra fee for an optional item, you call also cover things like washers and dryers, refrigerators, air conditioners, pools and spas. Note that most of the big things are missing from this list, like foundations and roofs, although roof repairs are offered by some providers. 

The key is to read the policy carefully, ask a lot of questions when buying one (unless you’ve had one given to you) and to have reasonable expectations about what sorts of repairs you can expect when things go wrong. 

I would advise my client not be guided by the policy and to be prepared to pay for the right repair when the stop-gap offered by the warranty company isn’t really in their best interest. It IS nice to have this as an option but it’s important not to let that become the sole criteria for decision making when the facts about a faulty furnace or roof come to light. 

There is a Home Warranty Association of California (who knew?) and you can contact them with questions about a policy you have or one you are considering. HADD (Homeowners against Deficient Dwellings) an advocacy and watchdog agency also offers a report on Home Warranties that’s worth reading.  

Here’s a top-ten list that the Home Warranty Association of California has recently published of items they think consumers should consider: 


1. What is included in the basic warranty? 

2. What additional options are generally available? 

3. How much is the fee for a service call? 

4. What are the total dollar limits on the warranty, and what are the limits for individual items? 

5. Is the company licensed by the California Department of Insurance? 

6. Is there 24/7 customer service available for processing emergency claims? 

7. Will licensed insured contractors be used to make repairs? How long is the warranty on repairs or replacements? 

8. What is the typical turnaround time for a claim to be dispatched and completed? 

9. Can the warranty be renewed at the end of the first year? 

10. Is the company a member of the Home Warranty Association of California? 


If this list leaves you hungry for more info on the subject, you can call the HWAC and talk to Mark Lightfoot (901) 537-8020 or Art Ansoorian (805) 653-1648. 

I feel obliged to share one last anecdote before closing on this small subject and that is that I have occasionally (albeit rarely) heard someone say in the course of a home inspection that a Home Warranty could be used to address things that we found wrong during the inspection. 

“Just wait a couple of months,” they would say, “Then call it in and they’ll come and fix it.”  

Now, I have no great love of insurance companies but it seems to me that this is part of what’s wrong with our corporate culture. 

I suspect that we pay premiums that are too high due, in part, to this sort of behavior (would you tell your kids you did this?). So, if you hear someone say this, do as I have done (no joke) and take them aside and have a little talk with them on the subject of ethics. 

And may all your homebuying fears be truly unwarranted.