Have you ever decided to replace your water heater or something else in your home, only to have it create a series of other costly problems? When I renovated my brother’s house in California, he replaced the horizontal pipes from the street and as a result had to replace the vertical pipes as well. As a result, the electrical box and roof vents had to be upgraded to meet current codes.
My most recent lesson came from a toilet explosion due to a water filtration system upgrade.
When we built our house 10 years ago, we installed a whole-house filtration system with a salt-free water filter and UV lights. This makes it possible to drink water even when a boil warning is issued. The UV light had to be replaced and the filter element had a 10 year lifespan. I had the plumber who installed the original system replace those parts.
The water had to be turned off for installation. As a result, a significant amount of air entered the pipe, causing an explosion loud enough to shake the house. I walked around the house, turning on all the faucets and letting the air out of the pipes.
When I flushed the toilet in the first bathroom, a very loud noise occurred. I was already having problems with that toilet, the little rubber tube that supplied water to the toilet kept coming loose.
When I opened the tank to investigate the noise, a tube popped out and water splattered all over the walls. Luckily, I was out of the line of fire and was able to call a plumber before the next day’s big ice storm hit. The hot water was pitch black not only in the first bath but also in the second bath.
When it rains, it pours
Within 60 days, the hard water had completely frozen the kitchen faucet, and within 5 days both garbage disposals had stopped working, as had the breaker on the large refrigerator next to it.
My plumber explained to me that because of Austin’s hard water, toilets and garbage disposal facilities in the area only have a 10-year lifespan. In California, by contrast, older homes can be dated by the manufacturing date stamped on the toilet lid, in some cases dating back to the early 1900s.
What actually happened was that the rubber grommets and other features on the inside of both toilets were slowly wearing out due to the hard water. In addition, calcium deposits were gradually building up in the pipes and inside the holes where the toilet water entered.
I have a home warranty – no need to worry.
Like many others, I had some misconceptions about how home warranty companies work. In my case, the home warranty company allows me to choose my own contractor. This feature allowed us to schedule a same-day plumber to perform emergency toilet repairs before the ice storm hit.
Without this feature, it could have taken more than a week to schedule a plumber’s appointment due to the storm.
The typical process for a home warranty is as follows:
You will file a claim with your home warranty company, explain the problem, and if approved, you will be given a claim number. At that point, you can schedule your contractor. Service calls typically cost between $75 and $100. A contractor will visit your property, assess the problem, take photos if necessary, obtain the make, model, and serial number, and discuss any necessary repairs or replacements. If approved, call your home warranty company and give them your claim number. You will then have the contractor explain the problem over the phone and approve or disapprove the proposed work. For my two disposal items and the faucet, the refund was a flat rate of $150 each and I paid for the service call. All I had to do was submit the receipt. Here I ran into a policy restriction. The total cost of removing the old toilet and installing the new one was approximately $2,100. I was offered $500 according to my insurance limits. (The faucet and disposable were replaced in December 2025.)
Regarding the breaker failure, at first I thought it was a problem with the refrigerator. I called a certified KitchenAid technician to assess what was wrong. Technicians said the circuit breaker was the culprit. The home warranty company approved the repairs, but again, my insurance only reimbursed me $500.
The bottom line is that I will be responsible for all plumbing and electrical repairs for the rest of the year.
Big Misconceptions Most Home Warranty Users Have
1. A home warranty is not an insurance contract.
It is a myth that if something breaks, the home warranty company will replace it. A home warranty is a service contract with limited repairs and replacements at depreciation. The system must be in working condition at the time the policy is issued.
As mentioned above, there are fixed reimbursement rates for many common items and annual insurance limits for certain categories of repairs. And if you have something in your house that’s 10 years old and can’t be repaired, you’re in luck for $50.
2. Content not normally covered
First, if you can’t find your model and serial number, it’s likely to void your warranty. In addition to not covering replacement value or pre-existing conditions, home warranties also do not cover improper installation, code violations, system inconsistencies, obsolete parts, or cosmetic issues.
3. How depreciation expense actually works
Most home warranties promise repairs first. If we can’t repair it, we’ll offer you a comparable model at a price based on year, condition, and insurance limits. The older your system, the less your home warranty company will refund you.
4. Surprises you have to pay for
If building codes change and require updates to things like ventilation, electrical work, permits, etc., those costs will be the responsibility of the homeowner. Also, if the contractor needs to open walls, change ductwork, or modify older appliances or systems, that’s also the homeowner’s responsibility.
Additional costs may include out-of-warranty parts, disposal fees, and labor charges above contract limits. Finally, home warranties determine what homeowners can expect, not what they can expect.
The bottom line is that a home warranty reduces costs, but it doesn’t eliminate them. If you or your customers believe they can fix something for free, you’re unfortunately wrong.
