Should You Cancel Your Home Warranty?
A good friend of mine and I were chatting and she recently learned about my blog about home repairs and what not and how a home warranty can help cover unexpected expenses. She then confided in me that she wish she had read about it sooner. She and her family bought a new home in 2015 and every since then it has felt like a money pit in every sense of it.
We were chatting about the kids and summer schedules and she commented about how her water heater had recently exploded causing all kinds of water damage and how she was dealing with replacing it and getting the damage fixed. I asked if she had a home warranty, she replied, “ No, we cancelled our home warranty when it didn’t cover our leak in our Jacuzzi tub.”
I said well, a home warranty might have covered replacing your water heater. She explained that since buying their home they have had one appliance or home system go out seemingly one right after the other. The home not being old it was built in 1996 and passed its home inspection when they bought it. They weren’t expecting any major repairs or replacement other than changing the god awful peach paint and carpet everywhere.
Her husband travels for work and isn’t the type that will try and tackle repairing a lot of appliances on his own, and with two small children my friend was overwhelmed with all the repairs and replacements that came their way in just a short period of time.
Cancelling a Home Warranty Might Cost You Money
Her HVAC system quit working, this could not be repaired and needed to be replaced, and the cost out of pocket was $10,000. Her water softener quit working and due to its age could not be repaired and needed to be replaced, the cost out of pocket was $2,000. Her refrigerator stopped working and could not be repaired or wasn’t worth repairing and needed to be replaced; the cost out of pocket was $1,300. Simultaneously the clothes washer and dryer both quit working and replacing both units cost $2,400 out of pocket.
When talking to my friend I told her while I cannot attest to everything the home warranty would have covered without knowing which policy they had then cancelled. I can say that when you have a home warranty if something needs to be repaired or replaced a home warranty can help cover the majority if not all of the cost to replace appliances and home systems like these.
For instance, American Home Shield, the biggest company in the industry, explains in a contract its T&C. It explains which appliances are covered according to a plan you choose and how to cancel an American Home Shield warranty. Be careful! although “How to cancel American Home Shield” mentioned in their contract, not all companies explain that. T&C might be tricky. You must read it before buying a home warranty. Note that most companies in the industry offer free cancellation within 30 days. After 30 day, you might need to pay a cancellation fee, usually around $50. However, some providers charge you even more than $75. In spite of that, this cancellation fee is a low figure compared to what you can save with a decent home warranty, as long as you follow its T&C.
BTW – My friend responded that husband felt ‘ill’ thinking of the money they have spent on these issues that could have been covered had they kept their home warranty. She said she would call her husband and get a new home warranty policy going asap because she wasn’t waiting on something else to happen unexpectedly.