Making the Most of Your Home Warranty Coverage

1. Who ya gonna call?

If and when something in your house breaks, leaks or otherwise fails - anything - call your home warranty company FIRST. If you call Roto Rooter to fix an emergency leak, and then later you realize that a bigger plumbing problem was the real cause, your home warranty company might refuse to cover it because they were not able to have their plumber look at the original problem. The home warranty companies all have service reps available by telephone 24 hours a day, so they are well-equipped to handle your emergency home repair calls.

2. Cash is good

If you would prefer cash to having a repair completed, ask your home warranty company. Say, for instance, that you wanted to upgrade from a standard water heater to a tankless, on-demand system. Your home warranty company will replace broken items with similar items, but you might be able to get the equivalent of the replacement cost for your old water heater in cash that you can apply toward the installation of your new system.

3. Renew, renew, renew

Your home warranty is renewable for as long as you own your home (though some providers won't allow you to re-up if you have had a gap in coverage), usually for about $350 to $500 per renewal year. A single major repair can pay for years' worth of coverage - if your home warranty provider pays to replace a $7,000 furnace, that policy has paid for itself for as long as 20 years! Of course, big repairs aren't needed every year, but when they are needed, they always seem to come at Christmas, or when you have just had a new baby, or started a business -- times when cash is tight. So, it is a no-brainer to just keep on renewing your home warranty when it comes due - that $400 check will be a lot easier to write than the $5,000 one you'll have to write if the air conditioner breaks after you let your coverage lapse.