The fact that nearly every American spent more time at home over the last year, and millions of us have turned the home into an office, has many consequences that don’t often make the headlines. For example, it was initially thought that staying at home would be a boon for the environment, helping lower our carbon footprints by cutting out that daily commute to the office. But some studies have shown evidence to the contrary, reasoning that blasting the heat in our homes all day (or the air-con when it’s summer)
But there is an undeniable fact: if you spend more time at home, there will be an impact on the building and all the nice stuff you have in it. The toilet is going to flush more; the fridge door is going to open and close more; the air-con/heating will be used more; just about everything in your humble abode is going to be subject to a little more wear and tear than usual. So what, if anything, does this mean for your home warranty?
Pandemic has unique problems for wider insurance industry
The pandemic has posed a serious question for the insurance industry in general. You have to remember that insurers work on precedence. The actuary used to calculate costs depends on the statistical analysis of past events. But with coronavirus, as we are painfully aware, there is no precedence. Even a year after the coronavirus outbreak, insurers are still remodelling their coverage to deal with the current, and any future, pandemic.
So, does that mean there will be a change to your home warranty costs? The truth is, we just don’t know. The insurance industry is dealing with many things in the present – business closures, canceled vacations, and so on. But home warranty might be something more of a slow-burner. As more claims come in, given the extra strain on appliances, the costs are likely to go up. But for the moment, this is still conjecture.
The LA Times, however, ran a piece dealing with this towards the end of last year. Unfortunately, home warranty companies did not come out of it well. The
Some warranty companies have bespoke options
Not all home warranty companies have got bad press during the pandemic. Landmark Home Warranty, a Consumers Choice Award Winner, still approves over 97% of claims. You can
Another area to consider is that many of us have turned to home improvement during the pandemic. According to one study, Americans spent almost $440 billion on home improvement products in 2020, which is a dramatic rise year on year. As soon as the pandemic hit last spring, fridge sales, for instance, rose by 160%. People were doing bigger grocery shops when forced to stay at home, and that, coupled with the closure of restaurants and other eateries, led to a demand for bigger and better fridges.
Other home appliances had a similar surge. That has to be factored into a warranty cost. If, for example, your fridge is new and still covered by the manufacturers’ warranty, then you might want to remove it from your home warranty plan, which some firms, like Landmark, permit. The changes pose a challenge for the industry, but it is also up to the policy-holder to make sure they are getting the best value for money, and that means going for bespoke options.
As we have hinted earlier, there is a sense of waiting for the dust to settle here. It might be that home warranty doesn’t really change at all over the coming months, and years. But it is worth keeping an eye on, particularly if elements