Owning a house often comes with a lot of expenses. The coverage of these costs, however, is no laughing matter, especially if the expenses come up suddenly. To bridge the possibility of being unable to meet sudden losses, we make use of insurances and home warranties to ensure that these expenses are taken care of when the time comes. However, what homeowners rarely ask is: getting a home warranty all gain and no loss? Or can there be certain disadvantages of buying a home warranty plan?
Like most things, home warranties have certain disadvantages attached to them. Most people are aware of these cons, but some aren’t. So, here are a few cons of a home warranty:
The Word “Maintenance” is a Gray Area
It should come as a no-brainer that home warranties do not cover items that have not been properly maintained. However, what most home warranty companies mean by the term “maintenance” remains a mystery to a lot of individuals. This enigmatic word often ignites disputes and arguments among homeowners and home warranty companies. Home warranty companies that are…well…not the best ones out there often use this maintenance clause to find their ways out of reimbursing a claim. Many times, such a situation arises that both of the parties are found disputing over what constitutes proper maintenance. Who do you think ends up stamping their authority in the end?
If you buy home insurance for a purchased house, there are high chances that you will not get home insurance for such items that had been poorly maintained by the previous homeowner. This, in a way, defeats the entire purpose of obtaining a home warranty in the first place. No matter how much you promise to maintain such items from that point onwards, you probably will not get the warranty. An unmaintained furnace, for example, will eat up a significant portion of your bank account if it breaks down and is uncovered by your home warranty.
Pre-Existing Conditions Are Often Not Covered
Home warranties are very similar to insurances. Just like a health insurance plan, a home warranty plan does not, necessarily, cover for pre-existing conditions. On the instance of a claim, homeowners are questioned on whether or not the broken appliance worked fine before the insurance was purchased.
Be advised that if the insurance companies even get a hint that it did not function properly, the homeowner will not homeowner see a dime’s worth of reimbursement. This is another reason why it is essential to ensure that the items you are getting a home warranty for are not already broken.
There are a lot of packages that are available when it comes to home warranty and some of them even grant coverage for pre-existing conditions as well. However, be advised that most companies are looking for any excuse possible for rejecting your claim. And why should not they be? This is a mode of business for these companies, and you know the purpose of a company, right? It is to maximize profits.
You Lose Control over the Important Details
When you get reimbursed for your appliances by the home warranty company, you can be sure that it will not be on your terms. If the warranty company deems you worthy of receiving a replacement for your damaged or broken item, then you will have little say in the brand, model, and quality of it. Most home warranty companies promise to replace your items with the closest available alternatives available in the market; however that is not always the case.
Another complication that arises is in the matter of repairs. To put it simply, the repair negotiations between a home owner and repair company are much more straightforward than they are with a home warranty company involved. A home owner can just contact any repair company, which he deems appropriate, and negotiate the price for the desired results. The home warranty companies, on the other hand, have their independent contractors whom they use for carrying out the repair jobs.
But what if you do not like their independent contractors? You do not get compensated, simple! For better or worse, you are stuck with them. It does not matter if they do not come on schedule, are unprofessional or cause more harm than good; you will need to deal with them if you wish to get your claim successfully.
There Are No Guarantees
The promise that a home warranty company makes is that your damaged appliances will be repaired or replaced if they are deemed to be fulfilling the set criteria. However, most of these home warranty companies seldom care about what happens afterwards. Home warranty companies will get your items repaired by their independent contractors; however, they will not be liable if those contractors damage your item during their course of the repair job. The best that such substandard companies will do is note a complaint against the contractor for future reference. The homeowners, on the other hand, are left to resolve their issue with the contractors, who often become deaf and dumb at such times. Ultimately, the homeowners have to get the damage done by the contractors taken care of from their own pockets. This entire situation negates the whole purpose of getting a home warranty in the first place, doesn’t it?
It is important to note, however, that not all home warranty companies operate like that. Some of the best home warranty companies are incredibly prudent when it comes to choosing their contractors and customer satisfaction. There is no more significant act of ignorance than to generalize.
A Home Warranty does NOT Cover Everything
A home warranty does not cover all of the repairs that arise in a house, as one would expect. Therefore, it is of great significance to know EXACTLY what your home warranty plan covers. This fact is of importance because most home warranty plans—especially the ones offered by unscrupulous companies—do not provide any coverage, whatsoever, for major repairs such as basement moisture issues, ruined underground plumbing, and leaking roofs.
The need of paying attention to this detail cannot be stressed upon enough, because you might spend your days thinking that your chimney is covered by the home warranty only to realize, sometime later, that it is not. The expenses that had been mentioned above are both major and necessary to make, in case the need arises. The lack of home warranty coverage in such a situation will be reflected, negatively, on your bank account.
You Often Feel As If Your Money Is Being Wasted
This con is persistent with all types of insurances, to be honest. You pay your warranty and insurance premiums so that the companies take care of any damages that may arise, right? But what if there are no damages to take care of? All of your premiums become unnecessary burdens that give you nothing more than a little peace of mind, right? And imagine a scenario when the need for a repair, finally, arises, but the home warranty company refuses to pay for it for some reason. Something like that would mean that all of your money that was spent on premiums was wasted.
How much does a home warranty cost, you ask? Home warranties save money when it comes to repairs, but they are expensive nonetheless. So, for the homeowners who maintain their houses well, getting a home warranty will seldom yield benefits. It would be better if they just saved up the insurance money, year after year, to cover for any need for repairs that might arise, on their own. It would be even better if they invested the saved-up insurance money in liquid securities so that they may make some profits on it, at the same time.
The Fine Prints
You know the reason why most homeowners do not understand what their warranties cover precisely? Well, that is because some home warranty companies have a high affinity with mentioning details in fine prints. If you are faced with such a contract, take a magnifying glass and peer into the fine printed text, because that is where the most important details are mentioned, most probably. It is advisable to avoid business with such companies, altogether, because nothing good ever comes out of dealing with people who are out to deceive you from the word go.
Not all home warranty plans have all of the cons mentioned above in them, for you will find the best home warranty companies to be taking good care of their customers. It is essential to inquire and ask questions before purchasing any home warranty plan because money, as they say, does not grow on trees. You should know, also, that all kinds of plans are not meant for everyone. So, if you purchase a home warranty, be sure to get the best and most affordable home warranty plan that caters to all of YOUR specific needs.