By Mike Bodeen · 23 December 2019
I received a mailer recently from a company called Service Line Warranties of America. It looked pretty official including the emblem of the City of Phoenix, as if it was endorsed by the city (authorized yes, endorsed, no).
Periodically, clients will call me and ask if this, or other type insurance offerings are a good policy to get? My friend Pam recently got one of these solicitations too. The cost for repair/replacement could run into the thousands, so, in Pam’s case, for a water line replacement, the cost of just over $63.00 per year might not be a bad investment because there’s an existing history of recent water line replacements in her neighborhood.
Service Line Warranties of America have an A+ rating with the Better Business Bureau, but a below average rating from customer reviews. 2 out of 5 stars. Check out this link to better decipher for yourself.
https://www.bbb.org/us/pa/canonsburg/profile/extended-warranty-contract-service-companies/service-line-warranties-of-america-0141-16002086#overview
The cost for a water line replacement policy is $5.60 per month. I’m guessing about the same cost for a separate sewer line warranty. But they appear to be separate fees.
What about Home Warranties?
When the Bodeen Team represents a buyer in their purchase, we recommend the buyer ask for a home warranty to be paid for by the seller. 90% of the time, in our experience, the seller agrees to pay the first year’s coverage (about $400-$700 on average). Then for the second year and beyond, it’s the buyer’s option to renew.
To more accurately gauge this investment, you may want to determine the age and condition of the mechanicals covered by the home warranty company. If your home is older and there’s not been much updating on the mechanicals, especially AC/Heating it may be worth the annual investment to keep the policy in effect. On the other hand, there’s also a solid case to be made that buying an AC unit now could pay for itself over the years by AC savings cost as a result of buying a more efficient unit.
Personally, I’ve had pretty good success with Home Warranties. We recently had a dishwasher issue that the repair company handled for us and while he was tending to that we asked him about a warming oven that was not working on the gas range. He checked it out and discovered that the part needing to fix the warming oven was no longer made. That was sweet news to us, as the home warranty company, since they couldn’t fix the unit, was then required to replace it new – a $2300 windfall. I’ve also had an AC compressor replaced and many other repairs.
I do believe there are warranty companies that are better than others. If you’re considering purchasing or renewing any of these warranty products, contact us first. We’ll give you our best advice. It may also benefit you to let the service company know that the Bodeen Team referred you. These companies know the importance of keeping Realtor’s clients happy.
In the end, insurance companies are in business to make money. I, like you wrestle annually for various requests to buy or renew stuff. Sometimes it pays off. Most of the time, I just pay.