Home Warranty

all we need to know about home warranty

Introduction to Home warranty

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Home warranty is one of the insurance products that is rarely understood by homeowners.  While it is true that it provides repairs and replacement costs of appliances, coverage is not always provided. Contract terms dictate that warranty companies can deny repairs caused due to lack of maintenance.

Average household spending on home improvements and maintenance costs are in the range of tens of thousands of dollars every year and in some cases it exceeds the value of the home if you include upgrades. Equipments and appliances typically need repair and replacement services as they age. You can either spend money on repairs or can invest in an alternative form of insurance – called home warranty protection. You can buy home warranty insurance policies to cover repair and replacement costs. Home warranties are supposed to provide an insurance hedge against major home appliances such as HVAC (heating, ventilation and air conditioning) units, plumbing systems, refrigerators etc.

Most of the home warranty companies will have the annual premium rate of 250 to 550 dollars and 60 to 100 dollars service call fee for every incident. Be aware that only certain set of appliances are covered by the policy. For example, most policies do not cover garage door openers, clothes washer and dryer, etc. Homeowner must get familiar with contract terms and coverage before buying.

Aged homes generally need home warranty protection as they tend to have appliance reaching the end of the life and replacement costs will be on the higher end. Most of new and existing homes are sold with home warranty policies as an incentive to the buyer. This is also one of the reasons warranty is overused as a sales utility rather than the actual insurance. For the same reason, home buyers are recommended to have a professional inspector inspect appliances before the closing date. It is NOT recommended to go with the home inspector suggested by real estate agent as it creates a conflict of interest.

Leading warranty companies

2-10 Home Warranty

American home warranty

Old Republic home warranty

Old Republic Home Warranty Review by Randy Burden

1st call to Old Republic was on Wed. September 10, 2008 when I got home and saw that the A/C was leaking from the attic. Chapman Air & Heat (www.chapmanair.com) came out the next day on the 11th. Repair man flushed the drain line and said it was fixed, so we turned the A/C on and when I came home the next day, their was now a lot of water damage on our kitchen ceiling from the A/C still leaking.

So I called Old Republic and they called Chapman Air & Heat to refix the problem. Chapman Air called me the next day (Friday) a few times, and ultimately ended up sending out 2 of their best workers to figure out what was really wrong since their first repair man’s work did not do the job. The 2 men they sent were very helpful and informative. They showed me in detail what was going wrong with the system and were just extremely nice and great to work with. They said they would have to replace the coil and a lot of other things since part of my A/C was made up of ‘fiberboard’ and they would have to replace it with metal.

Although they were extremely nice, they were not able to do any ‘quick fixes’ to keep the A/C working during the weekend, but luckly I was able to ‘rig’ the unit to drip the water into a large bucket.

On Monday, Old Republic Home Warranty informed me that some of the costs associated with the repair were not covered because “the city or state code” was now updated and some things needed to be added to my system to bring it ‘up to code.’ My A/C was fixed on Wed. and the total costs out of my pocket were the $60 service fee and exactly $563: $238 for (Emg. Drain Pan w/Safety Float Switch (Coil)), $225 for (Mastic Seal for Airtight Seams (Code)) and $100 for (Disposal of Old Unit.) I was of course not happy about the out of pocket costs but at least Old Republic covered the large costs of replacing the coil which is over $2000 alone.

All in all, it was a fairly decent experience. Chapman Air and Heat is a fantastic company. They really know what they are doing. As for Old Republic, their customer service agents are Very quick to point out what is not covered before you are even finished talking but they at least held up to their side of the bargain and replaced my coil. Oh, by the way, my house was built in 1993 so the A/C was about 15-16 years old in case you wanted to know.

Old Republic Home Warranty Review by Angie, TX

I have mixed feelings about ORHP. About a year ago, we bought a house that is closing in on 40 years old. It has two water heaters and 3 HVAC units. Our realtor paid for our first year ’standard’ policy; we paid $50 for an upgrade to silver. During the year, we had three calls, but they actually only had to fix one thing…and it was a big one.

We had a water heater that the pilot refused to stay lit. The unit was (as we later found out) a no-name brand produced by a company that no longer exists and it was 17 years old. It also was installed in a way that was no longer up to code.

The plumber called ORHW with me sitting right next to him and put them on speaker for me. They tried to get the plumber to say that it might be under warranty or he could order parts, but he told them no – we needed a new one. So they authorized that and covered the labor. We cut them a check for the $60 call fee and were told that before they would authorize ANY work, we had to agree to cover the costs not covered under our plan. That pretty much included all the stuff to get the installation of the new unit up to code, as well as the permit fee. Total for all that: $590…se we’re out $650 so far. We didn’t shop around plumbers as, when you call OR, you get who you get. We had to take their plumber to get the labor covered under our warranty.

They did come in the next day and install and it was working. It took them several hours, fortunately they billed OR for that. They also were polite and cleaned up. So far, so good. Then the city came out to inspect (b/c of the permit issued) and it didn’t pass. They neglected to do some pretty critical things under code.

We call ORHW and they refuse to intervene AND if they resend the plumbers to do the work they should have done the first time, labor isn’t included (code violations aren’t covered in warranty and they also mention improper installation…even though it was their own contractor choice). Plus they want an additional $60 call fee to come out again. Um, no. So we deal directly with the plumbers. They agree their fault, but charge us 1/2 cost labor and more parts…in for $200 more. Total amount we spent: $790. Total amount spent by ORHW for new water heater and labor to install it: $688 (per their coverage statement).

Considering they have raised the premium to $450 for the standard package and trade calls are now $75/pop…it’s a little unnerving. We probably would have been just as well off to call a repair person ourselves. That said, the age of the house and the nearly continually rising cost of repairs gives me pause and we’ll probably renew. If it were a newer house, we probably would not.

I wish there were better options, but there don’t seem to be. Maybe we need to band together and start a home warranty company of our own. We certainly couldn’t do much worse.

Related Links

wikipedia

Home warranty complaints – http://www.nj.com/business/index.ssf/2008/03/home_warranties_can_be_a_bad_d.html

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Written by homewarranty

March 3, 2009 at 10:52 am

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