Question: Do you think it’s worth it to buy a home warranty and, if so, is there a provider you recommend?
Answer: Last week I talked about mitigating the risk of not doing a home inspection and failed to mention that purchasing a home warranty can also help reduce the risk of buying a home, regardless of whether or not you do an inspection.
What Is a Home Warranty?
Home warranties protect many of the systems in your home including things like the HVAC (heating and cooling), appliances, and water heater. If one of those systems stops working while you’re covered, the warranty provider will repair or replace the system, or cut you a check to replace it yourself. One year of protection generally ranges from a few hundred dollars to one thousand dollars, depending on the scope of coverage.
Most home warranties are purchased by or for a homebuyer just before closing, but sellers can also purchase a warranty and benefit from protection during the sale period, or if something comes up on the home inspection, then transfer the protection onto the buyer. Homeowners can also buy a warranty at any time after buying a home, it doesn’t have to be associated with a sale. The provider usually requires a month or so between the time of purchase and coverage taking effect to prevent people from buying a warranty just when something goes wrong (pre-existing condition).
Are They Worth the Cost?
I generally find home warranties to be worth the cost for at least the first year of ownership. If the home you’re buying has old systems, consider buying multi-year coverage. Think of the expense like you would home or auto insurance. If you’re somebody who prefers to pay higher premiums for more coverage/peace of mind, a home warranty probably makes sense for you.
A common scenario I see where home warranties pay off is with HVACs when a new owner transitions from heating to air conditioning in the spring. During the winter, it’s often too cold outside to test the air conditioning during the home inspection so AC issues may present themselves after closing. With a home warranty, those issues should be covered.
Recommendation: Super Home Warranty
Warranty companies tend to have bad reputations with complaints ranging from difficulty filing claims, low-quality contractors, and lengthy delays. There were a few years that I stopped recommending warranties to most clients because of all the issues people were experiencing.
For the last ~5 years I have been recommending Super Home Warranty and have their coverage on my home. They’re responsive, have a good user platform/app, use high-quality contractors for repairs, and I’ve yet to run into an unreasonable claim denial.
They also have some valuable inclusions that other warranty companies don’t offer like a contractor concierge that gives you access to their vetted contractors and a bunch of add-on services for a small fee like re-keying locks, carpet cleaning, and HVAC cleaning.
It’s worth noting that I don’t get anything from Super for recommending them, just in case this seems like a sales pitch.
If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at [email protected].
If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to [email protected]. To read any of my older posts, visit the blog section of my website at EliResidential.com. Call me directly at (703) 539-2529.
Video summaries of some articles can be found on YouTube on the Ask Eli, Live With Jean playlist.
Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C Arlington VA 22203. (703) 390-9460.
