If you have just bought a pre-owned house and do not look forward to high maintenance/repair costs for it least a year you could buy a home warranty to substitute your home maintenance fund.
Many homeowners buy these policies to avoid paying for repairs or replacements on household systems that are aging. It is also more convenient than having to track down one s own repair technicians or wonder about who to contact.
What should you do if you are considering a warranty? Choose your warranty company carefully. Make a note of the government agency in your state that regulates home warranty companies. Checking its complaint records should give you a good idea of which company to choose and which not to. However, not all states supervise home warranty companies closely. Some of these companies have been known to abruptly shut down, leaving home owners in the lurch. If there is little or no regulation by the state, look for a company with a long track history. Acquaintances, friends and neighbors could also be a source of information regarding the best company to cover your warranty. Be sure about the terms and conditions of the company you are considering. The warranty offered may cover certain features and may not cover others. You should be sure about what is covered and what isn t. For example, if roofing is not included in the policy any damages cased as a direct result of that will not be covered. Breakdowns that are results of improper installation or of poor maintenance are not covered either. Sometimes the contract demands the up gradation of a system before it agrees to handle any repairs. Check, in advance, on which contracting company the warranty provider will arrange for to tend to your complaints. When you buy the warranty you have no choice in the selection of the local service company/companies contracted. This may not suit you. Make sure that the warranty premium is paid in full for the term of the agreement if the home seller or the real estate agent is paying for it. You can check the final escrow statement to be sure that the amount is listed there. In rare cases a real estate agent may pay only for a few months of service and then cancel the contract. It may take a long time and a lot of hard work for the homeowner to get the agent to refund the money due and many homeowners would not consider this worth their while. A service technician may also try to get you to pay for unnecessary services. Rather than replace any existing equipment with new ones, companies prefer to repair them. Although this is understandable since repairs are cheaper, it is sometimes preferable to have a piece of equipment replaced. If you plan to sell your house later, having newer systems and appliances can add to the value of your home as they are more energy efficient and pay for themselves in a fairly short span of time. Remember that household appliances should generally be replaced at least after seven years or if the cost of repair is about half the price of the new unit. If all your systems and appliances are new, the probability of incurring repair expenses is much less than what you might have to pay for a warranty. Perhaps you might not need to consider a warranty in this case. In spite of having a home warranty it is a good idea to create an emergency savings fund to cover any crisis that may not be covered by the warranty
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