A.D. Cantelmo Property Management
Our Business is Property Management Orange County California
Do you, or don’t you?
Every Property owner probably has asked themselves that question, many times during the duration they own their
property. Do they upgrade the kitchen, or not? Do they put in wood flooring, or
Laminate flooring? Do we spend the money on Solar or not? The questions never
stop and homeowners have to weigh many factors when making these decisions. One
question that homeowners and investment property owners have to ask themselves
is, Do they pay for a "Home Warranty" policy, or don’t they.
First, what is a "Home Warranty"? You might have seen the commercial on TV
that shows a woman and the “Grim Reaper” in a kitchen. She thinks the “Grim
Reaper” is coming for her, but when she finds out that the refrigerator is the
one that is about to become extinct, she begs for its life. The commercial is
for a “Home Warranty” company, and their point is that your appliances can
break at any time and of course your “Home Owners” insurance will not cover the
repair or replacement. The pitch, for a “Home Warranty” Policy, is that for a
small monthly fee, you can have the Piece of mind, knowing that if your
refrigerator or any other appliance breaks in your home, it will be repaired or
replaced without you having to break the bank. But is it really that simple.
Well, just like everything else, the real story is in the details and
for “Home Warranty” coverage, the details are really important. Let’s look at
how “Home Warranty” coverage works.
First, The cost of a “Home Warranty” can range from $300-$600 per year
depending on the coverage and the deductible for each repair can range from
$60-$100 per call. For example, if your Dishwasher breaks and you call the “Home
Warranty” company, it will cost you the deductible for them to come out. If it
can be fixed, they will fix it, or they will replace it, depending on your
coverage. But if your Dishwasher and refrigerator breaks, you will have to make
2 calls and pay a deductible for each appliance. But the real problem is what
is covered and what is not. For example, one of my clients has a “Home Warranty”
and the pump on the furnace was leaking. I called the company, and they came
out, but would not cover the cost of the pump, because the pump was an “after
market” install. I had another client who also had a “Home Warranty” policy and
their water heater was making a very loud noise, but the “Home Warranty”
company would not cover the repair, because the noise, while annoying, it was
not was causing the water heater to not
heat the water.
The “Home Warranty” companies in refusing
to pay for these repairs due to the policy were in the right, but the home
owners were not happy because they had to pay for the repairs while also paying
for “Home Warranty” coverage.
For Home owners, whether it be for a personal residence, or investment, they have to weigh the cost of repair and replacement with the cost of the
yearly fee and deductible and of course will any of your appliances break in
the course of the year. As a Property Manager, I really can’t tell people what
is best. My thinking is that for small appliances, it is really not worth the
cost, of the “Home Warranty” coverage, since most appliances last quite a long time and if one breaks during the year, it would probably cost less to repair or replace it on your own then the "Home Warranty" policy would cost. But if an Air conditioner or Furnace
breaks, it could be worth the yearly cost and deductible. Just remember to read
the policy very carefully, or you may be surprised when the expensive repair or
replacement is denied.
A.D. Cantelmo Property Management
Specializes in Property Management Orange County Ca.