ARE HOME WARRANTIES WORTH THE COST?
Read The Fine Print Of Warranty Coverage

With an aging housing pool, many home buyers are seeking the protection of home warranties. The number of policies sold has nearly tripled in the past five years.

Strong demand for home warranties can also be attributed to a fast-paced housing market in which many buyers have been dropping the traditional request for a contingent home inspection. Instead, they purchase a home warranty, thinking it will take care of any breakdown they may face in the future.

Before you decide to forgo the protective home inspection in favor of a home warranty, be sure to read the warranty's fine print. One of the first things you'll notice is it doesn't cover pre-existing defects. The best way to find pre-existing defects is to order an inspection-even if you don't include it as a contingency in your purchase offer.

Be aware, too, warranties do not cover everything in a home. A basic warranty (starting around $325) is likely to cover breakdowns or malfunctions relating to plumbing, air conditioning, heating, electrical and other home systems, perhaps even home appliances.

Given the "right" malfunction, a home warranty can easily pay for itself and then some. Note, however, most policies do require a deductible per incident.