On those "low cost" health insurance plans...
The last house I bought when I lived in Cincinnati "came with" a home warranty. I put that in quotes because it was part of the sales price of the home -- so I was the one who paid the $3,000 for the warranty. No worries, our realtor told us. If the furnace or air conditioner crap out, you're covered by the warranty.
That's exactly what happened. Within the first year, BOTH the furnace and the air conditioner gave out (more or less simultaneously) and so I contacted the warranty people. "Well," they said, "the warranty just covers the replacement cost for the units and not the installation. You pay for that."
OK. I'm just changing out one unit for another, so the installation will be minimal. A little disappointing, but no worries.
"And by the way," they said, "here's the furnace and air conditioning unit supplied by our warranty. We have a purchasing agreement with the manufacturer."
"You mean I can't pick my own unit?" I asked.
"No," they said. "But if you really want to do that, we'll give you the cash cost of the two units, and then you can use that to go out and buy your own."
I talked to my furnace guy, who told me in no uncertain terms that he would NOT install the units offered by the warranty company. The brand was notoriously unreliable and, in any case, they weren't sized right for my house. So I go back to the warranty company and tell them that I'll take the cash and buy my own unit.
This warranty was looking less and less like it was worth $3,000. And when they told me how much cash I was getting, it really didn't look worth the price.
$600.
You read that right. I was given $600 under my "home warranty" to pay for a new furnace and air conditioner that (with installation) came to a little more than $6,000. I had to pay 90% of the costs myself.
So if you've got low-cost health insurance, keep this little cautionary tale in mind. Because paying 90% of a $6,000 home repair bill is peanuts compared to paying 90% for a cancer diagnosis.
