Home warranty is a beneficial investment for any home owner, but there are several occasions whereby the warranty may come with some drawbacks. More often than not, the homeowner does not anticipate such catches and this is where they could end up feeling like the whole deal was not worth it in the first place.
A couple of the drawbacks that you are likely to experience include:
1. Denial of claims
Home warranties come with very specific clauses concerning what is covered and what isn’t; but even then, there are instances whereby the insurance company may refuse to foot the repair costs for something, which was listed as being covered by the insurance. How? If the item has been poorly maintained over the years or just over the period of time it has been in use.
This can be quite the area of dispute because of course, the contractor and the home owner may have different ideas of “poor maintenance” of a certain appliance or fixture in the home. But the contractor works for the insurance company and so if they cite poor maintenance, then their word is final.
2. No freedom to choose a contractor of your choice
Well, on the upside, you are relieved from the burden of having to look for a contractor when you need a certain repair done. This may work against you though, when the contractor hired by the insurance company ends up doing a shoddy job (at least by your standards); or if you do not like the contractor himself.
This will mean that you will have to stick with them because it is not really up to you – that is a decision made by the warranty company you are working with.
3. Third party being involved
When it comes to repairs being done, you cannot negotiate directly with the contractor; you will instead have to go through a third party – the home warranty company. This may make repairs a tad more complicated and the process even becomes lengthy and tiring at times.
4. No freedom to choose an appliance model of your choice
If an appliance has broken down to the extent where it cannot be repaired and so a new one is needed, sure, the warranty company will take care of this. The problem though is that you have absolutely no say in the brand or model that is bought to replace the old one. All you know is that it will be similar in standard or quality to the previous one; but what if you just really don’t like the particular brand? Well, that’s just too bad.
5. What if there are no repairs needed?
With home warranties, you pay a certain premium every year and this comes in handy in saving you a ton of money in repairs if anything does break down. But what if nothing breaks down? Wouldn’t this money be better off placed in an emergency fund to cater for when a breakdown does indeed occur? This is also another drawback that comes with the warranties.
As much as home warranty may have several drawbacks, the bottom line is that it is still a valuable and necessary investment to make. Choose your warranty with caution though; that may at least help cushion against some drawbacks.
Comments