4 Pitfalls of Home Warranties

Many home buyers prefer to purchase homes that have home warranties. This type of contract can provide you with a good feeling about purchasing a property. However, when you own a home warranty, there are a few potential pitfalls that you will need to be aware of.

1. Contract Loopholes

One of the biggest problems with home warranties is that you will be able to find numerous loopholes in most contracts. The warranty that you thought you had may not actually exist. These companies regularly put loopholes in their contracts as a way to get out of paying for repairs. For example, one common loophole is that the home warranty will only cover are pairs to the actual home itself. If a sewer line breaks just outside of the home and ends up flooding the house, the home warranty will most likely not cover it. You will have to pay for this expense out of your own pocket. Another example is if you do not perform the proper maintenance on certain parts of your home. If you cannot prove that you provided regular maintenance, the home warranty company might not honor a claim.

2. Regulation

Another problem with home warranties is that there is spotty regulation over the companies that provide them. There is not a governing body or specific regulatory agency for companies that provide home warranties. This means that home warranty companies are free to take advantage of customers without much chance of being punished. Even if they are punished, they will be free to do business with other customers and take advantage of them also.

3. No Control over Contractors

Another common problem with home warranties is that you do not have any type of control over who is going to do the work in your home. The warranty company will call a local contractor and have them come over to your house and perform the work. This might result in someone being in your house that you are not completely comfortable with. You might have a bad relationship with a contractor from a previous experience with them. However, this will not matter to the home warranty company. They might have a contract with a particular company to handle all of their work. If this is the case, you are stuck with that contractor regardless of what you might have to say. This can lead to a repair job that is not up to your standards as a homeowner.

4. High Prices

Another problem with a warranties is that they often cost more than they are worth. You might find yourself spending hundreds of dollars on a warranty that you will not ever use. Even if you do use it, you may not actually be saving that much money on the cost of the repairs. If you were to simply avoid paying for the home warranty and paid for any repairs out of your own pocket, you might come out ahead.

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