I can't believe we've almost been in the house a year, but as little as I can believe, it's come nonetheless. As with almost every milestone with the house, it involves a decision. In this case, whether to renew our home warranty. One of the stipulations in our contract was that the seller pay for a one-year home warranty not to exceed $479. It ended up costing $379. We've received several renewal notices, and have been dithering about a decision. While the coverage is good, the costs are going up significantly. The annual contract cost is going up to $472, with each service visit costing $60, up from $55 per visit.
Coverage includes:
- cooktop/oven
- electrical system
- air conditioning
- built-in microwaves
- heating system
- water heater
- ductwork
- dishwashers
- plumbing
- garbage disposals
We have friends who have gained huge value from their home warranty, replacing major appliances and systems that failed in the year after buying a house. Make no mistake, a home warranty can save you from serious struggle when you're first getting used to the new costs of home ownership on top of a mortgage.
The thing is, most of the systems in our house are pretty new. The most expensive would be the heating or A/C, with replacement costs probably around $5,000. A/C and heating systems are about 7 years old, water heater is about 4 years old, and all of the appliances are newer than we've had in any apartment. The previous owners also obviously took good care of their house. At even the worst-case scenario, we have plenty of room in the credit limit on our cards for most anything. And if that were cut for any reason, we would be able to go to family. Hopefully working on an emergency fund will mean that we can take care of those things if necessary, without a hiccup.
All considered, we're not going to renew. If we had an older house, or older systems, we would absolutely renew. The budget is tight, and if there was a chance that multiple problems would crop up at once, we would be hard pressed to deal with it. Hopefully any problems would be spread out, because we're betting on it. But we think it's an informed decision.
To note: fireplaces and chimneys are not covered, and neither are power surges or any problems like mold from a water heater breaking and leaking. The fireplace should probably be cleaned--it's been about 9 years according to the seller. But it is also a gas fireplace, so for some reason I don't feel as guilty about neglecting maintenance.
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