Sound Off: When is a home warranty warranted?

09 Jan

Sound Off: When is a home warranty warranted?

A home owners policy covers the house itself and personal contents, but it may not cover appliances and certain components such as plumbing, electrical, hot water and heating systems. That’s where a home warranty policy is useful. Normally in the range of $425 to $550, home warranty policies are a low-cost way to avoid an unplanned expense, such as the replacement of a broken appliance.

Pros: Home warranty policies are ideal on the purchase of a resale home with older appliances. I tell clients to read the fine print and know exactly what is covered. The most common scenario reported by my clients involves either a dishwasher or a dryer that suddenly breaks down. For the cost of a house call by a pre-screened technician, around $75, one can get the appliance either repaired or replaced.

Cons: Don’t bother purchasing a home warranty policy on a fixer upper that the buyer intends to remodel with new appliances and all new major systems. Furthermore, it does not make sense to buy a policy on a newly constructed home that already has the builder’s 10-year structural warranty and new appliances with one-year manufacturer warranties.

John Solaegui, Paragon Real Estate Group, (415) 738-7232, jsolaegui@paragon-re.com.

SF Gate