Lorraine Labonne-Storch opted not to buy a home warranty when she bought a house in New Jersey seven years ago. The home inspector had told her the boiler was on its last legs, but she didn't want to pay the $500 fee for the warranty.
Less than a week after closing, her boiler burst into flames and had to be replaced for $12,000. Labonne-Storch now regrets her decision to skip the home-warranty coverage. As she learned, a home warranty can pay for itself in one visit from a repairman. And that includes the $100 deductible that many plans have for a service call.The home warranty would have covered only up to $1,600 for repair or replacement of the boiler, but "any little bit would have been helpful," she says.
Labonne-Storch is now a real-estate agent, and she says her first advice to buyers is to purchase a home warranty. "When a buyer is buying a home, you have to keep in mind that these are used items," she says. "You never know, because the last thing you want to do is spend big money on big-ticket items."
What's your home worth?
A home warranty can be an inexpensive insurance policy for a buyer who purchases a home that has old appliances, or for new homeowners who don't know the age of the appliances or home systems they're inheriting.
In addition to charging a small deductible, home-warranty companies typically place some limits on what they'll fix.
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