Is home warranty worth the money?

HOUSTON - It's a decision just about all home buyers will face -- whether to buy a home warranty or take a pass. Having one can save you a lot of money, but only if you know exactly what's covered.

Homeowner Ernest Goss experienced something a lot of us in Texas can relate to. It was the middle of summer, 100 degrees outside and his air conditioning went out.

Goss had a warranty and it saved him a bundle.

"They came out, looked at it and said the whole unit was bad. I think $800 for a whole brand new air conditioner, install with all the fees covered," Goss said.

Goss's warranty covered the heating and cooling system. A good warranty will cover those items, as well as the heat pumps and duct work, plus the refrigerator, stove, garbage disposal and dishwasher.

Angie Hicks from Angie's List said essential plumbing coverage in any warranty should include electrical panels, wiring, drains and pipes.

"It's important to read the contract in its entirety. For example, maybe you have a plumbing issue that is inside the house. The warranty may cover it, but if it's the plumbing outside of your home it may not.

Hicks said the deductible for a good warranty should be no more than $100. Most warranty plans cost between $350 and $500 per year. Homeowners typically pay an additional $50 to $75 for each repair.

If you've got older appliances, a warranty could be well worth the cost. But, make sure the company includes an inspection so you know the condition of everything in your home before you sign.

That's what Ernest Goss did and it paid off.

"The warranty was for a year. I opted not to renew just because most of my other functions when I got my house inspected were all up to tip-top shape."

And the final essential for any home warranty is a 24-hour service line so you can reach someone immediately to get repairs started.

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