Jun 15, 2010

Homeowners' Warranties: Another Reason Not to Love Them

Anyone who's read any of my books on real estate will know I cast a wary eye on homeowners' warranties -- those service contracts meant to supply repair and replacement of a home's appliances, heating, and other systems when needed.

I've heard too many stories of homeowners who were disappointed when, after paying the standard service fee, they were told that nothing more could be done because the condition arose before the contract period, or they didn't do the required maintenance on whatever the malfunctioning object was, or the problematic portion of the pipe or whatever was excluded from coverage. (Actually, that last bit wasn't a story I heard -- it happened to me, with my dishwasher. Grr.)

Anyway, we can now thank Amanda Gengler, of MONEY magazine, for coming up with yet another reason not to love home warranties: When the warranty company actually agrees to a replacement, they don't need to use the same brand!

Gengler notes, in an article in the June 2010 issue of MONEY called "5 Things You Need to Know About Home Warranties,"  "There's no promise that a GE will not replace your Viking or a black dishwasher won't appear in a kitchen full of white appliances."

Just another reminder that a home warranty is not, repeat not, a form of insurance. You don't get cash, you don't get a choice of repairpeople -- you get services, and often limited ones.