What
you are buying, in essence, is an insurance policy protecting against
the breakdown of any of the covered items. Like any insurance policy,
its value is tied to its use -- if you never use the home warranty, you could
have saved its cost. If you do have a need for it, you very likely may
have saved money.
Are House Warranties a wise purchase?
In a newer home (less than 5 years old for example) a house warranty may not
be necessary, other than for peace of mind. As a general rule, the
components covered by a home warranty last longer than 5 years. In a
home aged from 5 to 15 years, a house warranty may be a wiser consideration,
since the upper end of that age range is often within the life
expectancy of such items as refrigerators, stoves and air conditioning
systems. In a home that is aged 15 years or longer (especially one with
older systems and appliances) a home warranty should bear strong
consideration since the likelihood for repairs or replacements goes up
as the age of a house increases. $ 500 in warranty and deductible costs
are obviously preferable to paying $ 2,500 or $ 3,000 for a new heating
system should you need it.
