First Person: My $800 Home Warranty Pays for Itself

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When I first bought my home, I barely paid attention to the home warranty that covered most of the appliances in the house. In fact, I almost stopped paying for it. Extra expenses like property taxes and homeowner's insurance began adding up. I was trying to readjust my budget to cover those new costs, and for a moment, I toyed with the idea of getting rid of the $862 a year policy that covered minor repairs. I finally decided to keep it, even though I didn't really think it was worth the $72 per month.

The home warranty covered various things throughout the home: the plumbing, the water heater, basic appliances. As a renter, I'd had minor problems here and there but never en masse. As a homeowner, I expected things to be similar. It actually bothered me a little each time I paid the warranty bill. I felt like I was wasting my money. But then, as they say, when it rains it pours.

One morning I tried to turn on the water faucet and nothing happened. I have a well, so it wasn't a simple matter of calling the water company. I called someone who specialized in servicing wells and explained the problem. I was told that it was probably the pump, so we scheduled a service call. Later that afternoon, I had a new well pump installed. As I was writing a check for nearly $900, which I was dipping into my savings to cover, the serviceman asked if I had a home warranty. He said he'd been to the house before when the previous owners lived here and he remembered them having one. I told him I did, but I didn't know what it covered.

After locating the paperwork, it turned out that my home warranty did cover well repairs. I called the company and was informed that I should have called them first. Luckily, the well service provider I had called was one the company contracts and so my warranty did pay for most of the work. I only paid $60 total for all the parts and labor. The difference between the original price meant that the one repair had paid for the entire years' warranty.

A few months later, my air conditioner stopped working. That repair, too, only cost $60. I quickly learned that home warranties are definitely worth having if you own a home. While paying the bill might seem pointless when all is well, it's so much better than extremely costly and unexpected repair bills. I would advise any homeowner to check into one of these policies. Some will even completely replace appliances with brand new ones if they can't be repaired.

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