By Melissa Kossler Dutton
Home sellers hoping to close a deal sometimes agree to purchase home warranties to give their buyers peace of mind.
Prospective homeowners, however, should do their homework to make sure the policies, which typically cover the major mechanicals and appliances in a home for one year after the sale, will actually help, say consumer protection experts.
The warranties generally range in price from $350 to $800. If purchased from reputable companies, they can help homeowners deal with broken appliances, malfunctioning air-conditioning and other problems, the experts say. The policies direct homeowners to contact the service company when something breaks. The company then sends out a repairman who provides an evaluation for a set fee, usually about $50 to $75. Once a professional has determined what the problem is, the warranty company pays for repair or replacement.
But homeowners may dislike transferring that decisionmaking power to a third party, said Angie Hicks, founder of Angie's List, the national consumer-rating service based in Indianapolis. Users of home-warranty or home-service companies have been the least satisfied group of reviewers on the site for the past six years, she said.
Homeowners oftentimes expect the companies to replace the item and are disappointed to learn it's going to be repaired, added Bob Miller, president-elect of the Ohio Association of Realtors in Columbus.
It wouldn't be economically viable to replace furnaces, washers and garbage disposals that can be repaired, said Art Chartrand, spokesman for the National Home Service Contract Association in Olathe, Kan.
Homeowners may end up surprised by the details of their policies because the contracts are often bought as closing gifts, so the person using the service is not the one who bought it, Hicks said. That means the user did not have a chance to research the company and carefully evaluate the policy before it was purchased, she said.
Sheila Adkins, a spokeswoman for the council of Better Business Bureaus, in Arlington, Va., recommends researching home-warranty or home-service contract providers before making an offer on a house. When it's time to buy, ask for a home warranty to be included by name in the offer, she said.
What may be covered
Basic and optional coverage varies from company to company with some regional variances. Home service contracts are specific and do not include everything in your house and most do not cover home foundations, walls, structure or finish. Some of the typically covered systems and appliances generally include:
? Interior plumbing ?Heating system ?Electrical system ?Water heater ?Ductwork ?Dishwasher ?Oven/range/cooktop ?Garbage disposal ?Garage door opener ?Air-conditioning (may be found as an option)?Refrigerator (may be found as an option) ?Washer/dryer (may be found as an option) ?Pool equipment (optional) ?Spa equipment (optional)
Source: National Home Service Contract Association (homeservicecontract.org)
Investigate specifics of a prospective warranty
Find out exactly what the contract covers and how much the service fee is. Pools, spa tubs and other specialty items might not be included.
Check to see if the company has policies on pre-existing conditions, and whether those repairs would be covered.
Find out how the company handles complaints about the contractors who handle repairs.
Ask if the company will let you buy a new appliance or item at a reduced rate if you would rather not have it repaired.