Home Inspection or Home Warranty?
by: Wallace J. Conway
Homebuyers are a curious lot. They routinely ask thought-provoking questions. A common question is, "If I get a home inspection, should I still get a home warranty?" Then there's always this question, "If I get a home warranty, do I still need a home inspection?"
The choice between having a home inspection and purchasing a home warranty is a question that I frankly do not understand. Each is intended to serve a separate purpose and ideally work together to protect and reduce the risk of homeownership.
Maybe an analogy will make the matter clear. An individual has just had a complete and through physical exam. The results of the exam and all associated lab tests are that the individual appears to free of all disease or illness. They are presently the picture of health!
Would it be prudent or responsible for the doctor then to recommend to the patient, due to their fine physical condition, that it is a waste of money to continue to pay for health insurance? Of course not!
None among us would consider the doctor even sane, let alone responsible to make such a recommendation. But, is that not the same situation to someone feeling that they need not purchase a home warranty because they just had a home inspection?
And let's view this same scenario from the opposite direction. Would we expect that our life insurance carrier would recommend to us that we forego the expense of regular physical exams, because, after all, we now have life insurance! Insanity!
The life insurance companies, in fact, feel so strongly that a physical exam is such an important part of risk reduction that a physical exam is often required to secure a life insurance policy, or at least has an effect on the insurance rate.
If insurance companies want to have you "inspected" prior to assuming the risk of your passing, it certainly makes sense for the homebuyer to have the home inspected prior to purchase. Doesn't it, therefore, make similar sense to warrant unforeseen failure with the home warranty?
When buyers fully understand risk and the cost-effectiveness of risk reduction tools, they almost always want all of the risk reduction tools available. It is in everyone's best interest to reduce risk by every cost effective means possible. Buyers love to be educated about understanding and reducing risk, and everyone loves a happy homebuyer!
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