Dear James: I am having a house built and I am ready to purchase the appliances and heating/cooling equipment. Is it better to purchase extended warranties for everything or a home warranty? About how long to various appliances last? -- Patrick S.

Dear Patrick: You will certainly be more relaxed in your new home knowing if the hot water heater starts to leak or the furnace gives out, its repair costs will be covered. This is particularly true for women who may not be as experienced as men at repairing mechanical equipment.

Extended warranties purchased with each appliance is one option, but it is an expensive option and requires record keeping for the homeowner. Most electronic and mechanical equipment fails within its basic included warranty period if it is going to fail prematurely. An extended warranty for several years is not always beneficial.

A home warranty (also called service warranty) is often the best method to insure that all the expensive equipment in your home will be fixed promptly. They have been available for the past 30 years or so and are becoming more popular as home appliances become more complicated and expensive to repair.

For a fee of several hundred dollars per year, the home warranty will pay for repair or replacement of your appliances and heating/cooling equipment if any fails. This even covers failures due to normal wear and tear. This often happens well after an extended warranty would have expired.

The home warranty usually covers all the appliances that are in good working condition in your home when the contract is signed. There may or may not be an inspection. When any appliance breaks down, you call one telephone number and the home warranty provider will send out the appropriate technician to inspect and repair the appliance. There is a small deductible amount you pay per call depending on your specific contract.

Since you are building a new home, this is probably not important, but some home warranties can be transferable when a house is sold. For homeowners thinking about selling their homes soon, make sure you select a home warranty company which is transferable.

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Read the fine print on the home warranty contract carefully because the warranty coverage varies among various companies and from state to state. Also, the area of the country will impact what coverage is most important. For example, if the furnace fails in Phoenix, it is not as serious a problem as in Boston where the plumbing may freeze and burst.

Typically, the following items are covered: kitchen and laundry appliances, water softeners, furnace and air conditioner, ductwork, plumbing, and electrical systems. If you have other items such as an outdoor hot tub, swimming pool, etc., make sure they will also be covered.

If you happen to be handy with tools and mechanically inclined, you may consider investing the several hundred dollars each year in a mutual fund or certificates or deposit and make many of the repairs yourself. This also gives you the option of selecting the specific repair company of your preference should you need professional help.

The life of appliances varies depending the quality on the product initially and how it is used. Dishwashers, garbage disposers, washers, dryers, water heaters, furnaces and air conditioners last about 8 to 15 years. Stoves and refrigerators may last up to 20 years.

Send your questions to Here's How, 6906 Royalgreen Dr., Cincinnati, OH 45244 or visit www.dulley.com.


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