Real Estate

Home Warranty Policies

PREMIER Homeowner News What do you do when you have a home full of guests for President’s Day weekend and your washing machine suddenly goes on the fritz? Will you be wishing you had a home warranty policy?


Repairing appliances around the house is inevitable, but are home warranty policies a good or bad investment? Here are some stats and costs to help you decide for yourself.




I wrote about learning this lesson the hard way in our April 2010 issue (click here for full article). When an appliance breaks down and needs to be replaced waiting will only cost you more. Because my appliance was not operating properly it cost me $200 extra on my electric bill for 7 months. That extra $1400 would have covered replacement cost. Don’t make the same mistake.


When deciding if a home warranty policy is right for you knowing the average cost of replacement and repairs is important. Note though that with a home warranty policy you do not always get to choose whether or not an appliance is replaced or simply repaired.


The average cost for a basic home warranty plan might be from $350 to $500 per year, according to the National Home Service Contract Association (NHSCA). Also keep in mind you will have an approximate $60+ trade service fee that you pay for each repair request (each company’s price varies). According to American Home Shield, their average customer in 2009 had more then 2 services requests. There may also be some additional costs associated with the repair or replacement item, discuss these with any company you may be considering.

If you decide on a Home Warranty it is important that the company you select be a licensed home service contract company (or possibly referred to as: home warranty company, home protection company, residential service company or home service contract company). You should go with a company that is a member company of the NHSCA, these are licensed companies in good standing that adhere to a strict code of ethics set forth by the Association to promote fair and ethical business practices.

Nine out of 10 existing homes in California are sold with a one-year home warranty, according to the Home Warranty Association of California. Warranties are typically purchased by home sellers as a bonus and enticement to buyers. If you have recently purchased a home find out if you have a home warranty policy and make sure to utilize it if you do. This is the ideal way to find out if a home warranty is right for you.

See previous Post: Fun Facts from the February Issue>>


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