Home Warranties Can Be a Budget Saver – Especially When the A/C Breaks

Nothing makes you appreciate air conditioning more than several consecutives days of 100+ degree heat in Texas. Unfortunately, every appliance has a shelf life, and more often than not, your A/C will die in the middle of the summer when it tends to run constantly. If you have to replace it completely, you’re looking to pay somewhere between $2,000 and $5,000 for a new unit. If you use a home warranty service (not just for new homes), it will cost a lot less.

John and Amy’s A/C unit bit the dust back in June. Within five days, they had a completely new, energy efficient A/C system and it cost them about $150, including the service call.

“We have a home warranty service,” said John. “It’s the best thing we’ve ever purchased.

“I hate making that $33 payment every month, but it sure pays off when something like this happens,” said Amy.

A home warranty service can be a great asset to your budget – especially if your appliances are starting to age. Most home warranty services cover all major appliances – none of which are cheap to replace. John and Amy actually had to call on their warranty service twice in June. Each time they call for service, they pay a service call of $60, which covers everything except a replacement appliance. If the appliance has to be replaced, there’s a small cost on top of that. John and Amy paid $88 to replace their air conditioning system. That’s not even five percent of the normal replacement cost.

Home warranty services are better than extended warranties on individual appliances for several reasons. First, extended warranties are designed to end before the appliance typically will die. Second, a home warranty service covers all the appliances in your home, as well as plumbing problems, electrical problems and even telephone wiring.

Is it really worth the cost? Let’s do the math.

  $400 – annual cost of warranty

  $120 – two service calls in June

+$ 88 – A/C replacement

  $608

Compared that to the thousands of dollars they would have been out, it was definitely worth the cost this year, which is only about half over. Are there times when they may not use their warranty service at all during the year? Probably. But even if they paid $400 a year and did not use their service for three years straight, they would have more than made up for the cost of it this year

Think about it this way. The average person pays at least $1,000 each year for homeowners insurance (which does not cover appliance replacement from normal wear and tear) but rarely ever makes a claim the entire time they live in their home. You know your appliances will break every so often and die eventually. Will you be prepared for the expense that comes with it?

Read more on home warranty services here, including pros and cons, reviews on specific warranty programs and more.