Home Warranties - Worth it?

[BristolBane]

My wife and I purchased our first home about 9 months ago. The sellers paid for a 1 year home warranty as part of the deal. Well, the warranty company is trying to sign us up for another year now. The cost is $484 for 1 year of coverage. We have had no claims so far. The house is now 11 years old with the original AC, water heater, and furnace still in place.

Anybody have an opinion on whether these home warranties are worth it or not? Anyone have trouble getting one of these companies to pay up on a legit claim? This particular company is "American Home Shield".

[Whakamole]

Doing a google search turned up:

http://www.consumeraffairs.com/insurance/am_home.html
http://www.syix.com/emu/html/ahs.html
http://www.syix.com/emu/html/ahs2.html
http://www.scam.com/showthread.php?t=304

Sounds like you should save your money.

[JPatrick]

That price sounds a bit high.* What exactly does your policy cover? I've had an AHS warranty for about 8 years.* Costs a little over $210 which covers basic electric, plumbing, water heater and heat pump.* Heat pump owners seem to get a better deal on price.
AHS service varies widely depending on who the conractor.* During the early years service was bad. Now, with new service people things are much better.
For sure I would say, don't pay for coverage on your major appliances.* If they break and are past their useful life, just buy a new one rather than settling for a quick AHS fix.* On the other hand, the big $$$ stuff like the AC and possible major plumbing work is another thing.* It is nice to have coverage when the compressor blows.* However, keep in mind that free ain't necessarily free.* If they replace an AC they will have lots of little extras for you to cover and if you don't pay for an upgrade you will receive the cheapest model made.
I have an old heatpump so I keep coverage for the day it goes.* After that the coverage is gone.

[REWahoo]

My experience with home warranties is that they do repair things when they break. The problem is they ALWAYS repair things when they break, even when they should replace rather than repair. They take the least costly option to get you back up an running. The end result is you can have frequent and repeated outages, service calls, inconvenience and outright frustration dealing with something like an old and unreliable heating or air conditioning system.

To me they are not worth the price.

REW

[MRGALT2U]

Quote:

Originally Posted by REWahoo! My experience with home warranties is that they do repair things when they break.* The problem is they ALWAYS repair things when they break, even when they should replace rather than repair.* They take the least costly option to get you back up an running.* The end result is you can have frequent and repeated outages, service calls, inconvenience and outright frustration dealing with something like an old and unreliable heating or air conditioning system.* To me they are not worth the price. REW

I agree. Not worth the price.

JG

[MRGALT2U]

Quote:

Originally Posted by BristolBane My wife and I purchased our first home about 9 months ago.* The sellers paid for a 1 year home warranty as part of the deal.* Well, the warranty company is trying to sign us up for another year now.* The cost is $484* for 1 year of coverage.* We have had no claims so far.* The house is now 11 years old with the original AC, water heater, and furnace still in place. Anybody have an opinion on whether these home warranties are worth it or not?* Anyone have trouble getting one of these companies to pay up on a legit claim?* This particular company is "American Home Shield".

I have had AHS for over a year. When they asked me to "renew" I just
laughed.

JG

[riskadverse]

About 15 days before mine expired (part of the purchase contract for the house), I put in a claim on a 30 year old leaking pool filter. *I really didn't expect much, but I got it replaced for a $25 deductable fee. *I still didn't renew, but I was impressed.

[Nords]

Quote:

Originally Posted by BristolBane The cost is $484* for 1 year of coverage.* We have had no claims so far.* The house is now 11 years old with the original AC, water heater, and furnace still in place. Anybody have an opinion on whether these home warranties are worth it or not?* Anyone have trouble getting one of these companies to pay up on a legit claim?* This particular company is "American Home Shield".

I can't remember the last time I had a $500 repair bill.* And if I had an appliance with that big a problem then I'd replace it.* For $500/year you could probably attend different trade schools each year in the subject of your choice and become an expert at all of them within a decade.

What annoys me with AHS is the attitude of "You must wait for us between the hours of 9 AM & 5 PM, and there'll be a $50 charge when we manage to show up during that time.* Assuming that we DO show up."* After that they'll either replace a $10 part or advise you to replace the entire thing.* (Thanks, guys.)

The only time I'd consider paying that much money for that little service (essentially paying for peace of mind) would be if I had a six-figure income and a 60-hour workweek... with someone else available to wait for the repair crew.* Even then the hassle factor still seems substantially high.

It's like paying a financial advisor to take care of your retirement portfolio of actively-managed front-loaded funds.* There's no way that they can be more motivated than you, and eventually you'll become more of an expert on your specific portfolio than they'll ever have the time (or inclination) to be.* They have to be generalists in their field (a mile wide, an inch deep) while you can be the sole greatest living expert on the BristolBane fortune (an inch wide and a mile deep).* It all depends on whether you have the time, interest, & motivation to teach yourself or to have others do it to for you.

If you have the time for home maintenance and don't mind making a mistake or two, then here's an example.* Our 16-year-old house has a roof leak on the south side.* 95% of our rains come from the northeast, but when a hard downpour comes from the south (once or twice a year) then a gallon of water leaks into our kitchen.*

Roof leaks are darn hard to figure out when they're intermittent.* I know from bitter experience that it's very difficult to find any contractor, let alone a roofer, who'll come out to troubleshoot that type of problem.* And if they do troubleshoot it, they might not find it (but we'll have to pay them anyway).* We'd usually get a "Well, here's what I'd recommend" guess that requires several hundred $$ more of easter-egg hunting.* Eventually you end up having that entire area of the roof ripped up and replaced in hopes that re-doing it solves the original problem (which might never actually be discovered or diagnosed).

We decided that the roof leak had to be caused by the guys who installed a passive roof vent (on the south roof) because, after all, they were the last guys to mess with that area of the roof.* They came out and pulled the vent.* When I squeezed into the hole I could see that it wasn't their fault after all.* The water was coming down the wall outside the 2nd floor bedroom, getting inside the void above the kitchen where that wall joined to the roof above the void, puddling on the kitchen ceiling, and eventually leaking through.* (The roof guys had to do other warranty work on another fan so they threw in this troubleshooting for free, plus a great big apology from me.)

I googled "roof leaks" for some very entertaining reading.* I eventually learned that 90% of all roof leaks are caused by flashing problems, and flashing goes between the walls and the roof.* Hmmm.* So we went to Home Depot and sat in the recliner display with their roof books for an hour reading about flashing.* We bought $8 of flashing, $5 of roof cement, and a couple bucks of nails (but not the book!).* We pulled the flashing on that part of the roof and it looked like it had been machine-gunned by a crazed roofer.* (I don't know why some pieces had five or six holes without nails but they did.* They were also surrounded by water stains that had gone through the holes, around the felt, and down the plywood sheathing into the kitchen void.)* We replaced the step flashing (using one rubber-collared nail per piece, with liberal daubs of roof cement).* Now all we have to do is wait another 6-12 months for a south rainstorm.

[You battle-scarred married home-repair veterans know that I didn't get off that easy.* Spouse suggested pulling the siding off the wall ("since that'll make it easier to get off the flashing anyway") and putting in radiant-foil insulation to keep the hot sun off that wall of our bedroom (behind our headboard).* Of course most of the nails pulled through the siding instead of popping.* So both jobs are done but I still have a bunch of holes to seal & paint.]

Same thing for leaky faucets or bad light switches.* Go to Home Depot or Lowes, read a book or look at the parts display, ask one of the staff with a few gray hairs, maybe take one of their one-hour sales pitches "how-to" classes, and experiment while keeping in mind that you're several hundred dollars ahead of the contractor.* If you really get into it, subscribe to "Family Handyman" ($20/year) and watch HGTV.

But if this stuff makes your eyeballs glaze over and you don't have the time or the interest, why sure-- $484 sounds like a great price.* Not that you have any alternatives...

[justin]

I was researching a home warranty for a recent property sale. My conclusion was that they probably won't cover much, and the copay for each visit is so high that you could probably just pay someone out of pocket and it would be cheaper. They also exclude tons of stuff from coverage. I remember looking at one part of the warranty - what they would do if a pipe breaks. They don't fix any damage the leaking water did to anything, just the pipe itself. Most pipe repairs are relatively cheap compared to the annual premium on the warranty.

[cute fuzzy bunny]

Only had one experience with filing a home warranty claim. Was sitting at my kitchen table in an old house I owned about 12 years ago when, of all things, the hot water pipe under the kitchen sink popped and started spraying water. Leak was right at the solder joint at the bottom of the valve. The house was ~35 years old, as far as I could tell the pipe was original. Must have been some electrolysis or simple corrosion.

Recalling I had an AHS warranty that came with the house, I called them and they sent a plumber out right away...only a couple of hours. I was fairly impressed with that response time...I think it was a sunday as well.

Guy opened up the wall, cut off the valve, soldered a new valve and piece of pipe in place and packed up. Nope, they dont do drywall repairs after they've opened up the wall, thats not covered by the home warranty. Drywall and wood under the sink were also drenched and water damage not covered.

All in all, it saved me a hundred bucks or two over paying cash, but it wasnt a complete repair. Like auto extended warranties, the exclusions and limitations are extensive.

But if I had a 20 year old house with the original water heater, furnace and air conditioning, as well as the original kitchen appliances...maybe not a bad purchase.

[REWahoo]

Recieved a solicitation in the mail today for a home warranty. An offer to sign up for a one year contract ($468), but no copy of the contract was provided. Have to call a toll-free number to get a copy and check the fine print.

Went online to see if I could download a copy. No luck, but the company website did provide this little tidbit of information:

"If you have an XXXXX Home Warranty, you'll simply call our toll-free number or log on to XXXXXXX.com 24 hours a day, 7 days a week to report the problem. We will then notify a local, pre-screened, licensed technician who will contact you within 4 hours during normal business hours, 48 hours on weekends and holidays, to schedule a mutually convenient appointment time."

So although you can call in a problem on a weekend, they don't have to call you back to schedule an appointment for up to 48 hours after you contact them. Note there is no mention of any commitment/requirement of when you will actually get a repair person to visit your casa.

I can see me trying to explain to DW on some Saturday with the temp. above 100 that although our A/C just went out and we have a home warranty policy, they don't have to call us back to schedule an appointment for repair until Monday. :P

Back to the thread question - not to me.

REW

[MRGALT2U]

Run! They are worth as much as Bob Brinker's advice, in other words;
nothing. At least that is my experience.

JG