Home Warranties

Home warranty

When you buy a home you’re going to, at some point, have the inevitable conversation about the need for a Home Warranty policy. What is a Home Warranty policy you ask? It’s an insurance policy that covers lots and lots of issues that can, and will, come up after you begin your residence in your new home. The basic policy covers most appliances, electrical, plumbing, furnaces, hot water heaters, garage door openers…etc. Inevitably, right after you move into your new home something breaks. When that happens you call an 800 number given to you by the Warranty company and they send out a local professional to fix it. You pay a small service charge but the bigger portion of the repair is covered by your policy. Some items that you routinely use (and probably ones that break easiest!) are not covered under the basic policy but can be added for an extra charge. These items include washer/dryers, refrigerators, central AC, roofs, spas and swimming pools. The basic policy is under $400.00 in most cases.

Here’s some of my observations about Home Warranties:

* They’re essential to have…you’ll use them, I promise!

* The Home Warranty company rarely sends you the policy or any information after you close escrow. At least it seems like that to me because I frequently am asked by clients for the relevant info when they discover they need it and they never seem to have the policy around.

* It’s the darnedest thing…the issue you need help with is the one thing that’s not covered under the basic policy. (Your ice maker breaks on the fridge door, the plumbing main line ruptures)

The most important thing to remember about the Home Warranty…is the fact that you have one!  I can’t tell you how many times a client has called me after a few months in the house and says something like “Hi Jim, our hot water heater ruptured a couple of days ago and so we called a plumber and had it fixed…how do we use our Home Warranty for that?” Umm…bottom line? You’re screwed. You have to call the Home Warranty’s 800 number, they have to send the plumber out.

Even with all the potential headaches accounted for these things are worth it. As a buyer, they’re usually provided for you at closing without you paying for it. Sellers are smart to provide these since they greatly minimize hassles for them after close of escrow. They last for a year after COE and you can always extend them at that time. We used ours five times in the first month we lived in our house when we bought in 2004. I love these things.


  1. We have a home warranty, but it didn’t cover the fridge! And the compressor of the fridge broke. We can’t blame them for not covering the fridge, since it looks like it is at least 10 years old… Like the Chinese saying, “If the old doesn’t go, new ones won’t come.” =)

  2. The co pay for the warranty is not cheap either. ANd they dont cover outside the house, and most of the time the things break outside of the house.

  3. Jim Minkey says:

    Thye can certainly be annoying…that’s for sure. I still think the $50.00 (or whatever it is) service fee is worth it…especially when you’re talking about a furnace or a hot water heater.

  4. It depends on which company they contracted with. I had a faucet breakage and it took this company 1.5 month to replace it. The other complaints I had is the contractor always buy cheap replacement and you can not change that.

  5. This is a great blog. Keep up the great work. Anyone ever tried House Flipping?

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