Home Warranties: Can They Transform Your House Into a Dream Home or Prove a Nightmare?

While visualizing a dream home in our minds, it might be tempting for us to create all the contemporary as well as traditional aesthetics pertaining to the housing such as modern design, smart interior, swimming pool, lush garden, alleyway etc. However, in today’s practical terms, rather than fantasizing, people have to utilize the available elements and facilities to make their homes comfortable, sustainable, enjoyable and livable.

The shelter has been one of the most important parts of human civilization even from the earliest prehistoric era. From caves all the way to modern smart e-homes, our successive generations have witnessed apparent changes how houses evolved over time. The excavations of ancient civilizations and the architecture of medieval ages clearly indicate the importance of houses in terms of establishing and promoting cultures across the world.

Coming to the present scenario, all of us do have some sort of idea how our dream home should look like. Different people have different requirements, aspirations and financial conditions; having said that, one can’t be stopped from finding ingenious ways of home improvements in order to bring uniqueness in his/her house.

When you buy a new house from the earlier owner, it is natural to worry that something may go wrong. After moving in you may perhaps find your fridge isn’t working, the plumbing is deteriorating and causing water getting pooled everywhere, or you might spot a slew of other inconsistencies. In view of this, certain clever home improvements could be incorporated by home warranties. So, in addition to repairing and renovating, a home warranty can give you a reason to smile.

Are Home Warranties Worth It?

In recent years, home warranty companies have grown significantly with homebuyers looking to immune themselves from hefty home and appliance repairs at any moment in the future. Recently, The Chicago Tribune reported that 3 million homeowners bought home warranties during a 12-month period. But the question is, are they worth it? Honestly, there are mixed reactions to this query, since it subsequently depends on the company issuing the warranty and the homeowner’s needs.

The fact that home warranties may or may not be required hasn’t deterred homeowners from buying them; nor does it diminish their effectiveness as a tool since homeowners can use them to sweeten their pot should they want to sell their home in a tough market down the line.

Hence, if you are looking to take up a home warranty, it could be beneficial for you in many ways; which is why, they are increasingly becoming common in real estate transactions. They can help you sell your house faster and for a higher price because it provides the next buyer with protection against the unknown. They can also help you increase your home’s durability and sustainability. Furthermore, a credible home warranty can help you mitigate the costs to repair or replace major items such as your central AC or heating has broken down or some other appliances have gone berserk.

In the United States, different states have different laws for home warranties. New Jersey state law, for example, requires that all new single-family houses and condominiums to come with a 10-year warranty; in New York, the law creates an ”implied warranty” that protects buyers of new homes for up to six years. In Connecticut, there is a basic one year warranty. Therefore, armed with these laws, when you are moving in a newly constructed house, you probably don’t need a new home warranty.

What to Look Out For?

While it sounds a profitable proposition to rush towards buying a home warranty, your first step should be to evaluate the possibility that you’ll be able to use it. Home warranties typically include a range of services such as plumbing, electrical systems, AC and ductwork, water heater, refrigerator, built-in microwave, trash compactor, etc. Therefore, it is important to discover home warranty companies that provide you with an explicit fine print because, as an old adage goes, the devil lies in the details. Following are some critical points to look out for before buying a home warranty.

  • Home warranty is not home insurance: First and foremost, you shouldn’t confuse home warranty with home insurance, which many people mistakenly tend to do. The latter keeps your house safe in the event of any unfortunate incident (fire, hail, theft, property crime). Home warranty, on the other hand, covers specific components belonging to a house.
  • Check the warranty period: Usually, a typical home warranty is written for a period of one year. You might not receive any notice of its expiry. If this is the case, you can negotiate to renew it under nominal charges.
  • Different warranties offer different coverage: You should check which coverage is limited to which circumstances. Don’t let them convince you to upgrade the existing plan. You can get a second opinion regarding this.
  • Costs of home warranties vary greatly: Warranty providers are smart; they may have a fair understanding about the life expectancy of your appliances. Hence, they design their offers in a way that might seem attractive initially but could rise as the time passes by. So keep a close tab on the price range. How good the warranty depends on how many loopholes are written into the fine print.
  • Check out for beneficial plans: Certain home warranty companies occasionally come up with plans that provide you long-term benefits. Auto-renewal is one such obvious offer that ensures a long-term benefit for you.
  • Customer service is important: In the event of an unfortunate breakdown of appliances, your everyday life could come at a standstill. So, try to check out the genuine rating of home warranties in terms of fast response and better customer service.

Are There Any Scams In This Field?

Scams can happen anywhere and anytime; home warranty industry is no exception. If you care to perform a basic research at your end, you will notice many emotionally driven complaints against some home warranty companies stating ‘scams’ have taken place. But are home warranties a scam?

There are many evidences from the past that suggest many customers have been wronged when home warranty companies failed to assist them sincerely. Many homeowners have encountered home warranty scam artists and cons who left the former high and dry when they needed help cover a massive expenditure. Clearly, it is no less than a scam when certain companies give homeowners a “false sense of security” that they will be covered should something goes wrong. However, the sad reality is some companies exploit loopholes in their contracts, which otherwise are too vague to be noticed by common homeowners, and go scot-free.

It is also possible that some customers who never required anything fixed might never know that they were victims. In the past, a few home warranty scams did take place that gave their customers nothing but mental trauma. For example, “The Emperor’s New Clothes”, “The Ponzi Scheme” and “The Disguise” are some prominent ones.

Therefore, it finally boils down to the crying need for spotting such scams. This is where real estate agents, home inspectors, authorized professionals and customer advocacy groups can help you point out the palpable signs.


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Smith Willas
Smith Willas is a freelance writer, blogger, and digital media journalist. He hold a bachelor’s degree from Florida University and his areas of interest are health and fitness, marketing, latest technologies, travel ideas, mobile tech, politics, and world news.