Home warranty - good or bad?

[red714]

I've been considering purchasing a home warranty. Would like to hear views on this. Are they worth it? What factors should I consider? Any input appreciated. Thanks.

 

[Dash man]

Not worth it. They usually have a deductible that has to be paid on top of the monthly fee. Just put the money in your emergency fund so you have the funds when you need them.

 

[WWDog]

I'd like to hear that too. I had a neighbor who purchased one and within a few months he needed to have his sewer line dug up. Another neighbor who purchased one and then went back and forth for some time getting his AC fixed several times before it was finally replaced. I guess I've seen both good and bad. My leaning is to just use the money I would spend on warranty to just fix things as they break.

 

[travelover]

We got a "free" one year home warranty from the real estate agent when we bought this house. The roof started to leak and now I see it only covers appliances.

I'd steer clear of any insurance to protect a loss that you can easily absorb.

 

[davebarnes]

Instead of buying a home warranty, just send the money to me.
I will ignore you and that will less painful than dealing with the warranty company.

Some reading for you
https://www.yelp.com/biz/2-10-home-buyers-warranty-aurora-4

 

[Katsmeow]

The problem with a home warranty -- even if it is paid for by someone else like when you sometimes buy a home -- is that you lose control over who does the work when you work with a home warranty company. We had one in the past. For very basic easy repairs. it was fine. For more complex stuff not so good.

In one house I had a plumbing problem. The plumber came out and did some work then basically gave up and left my toilet unattached when he left the house (without telling me). In fairness, it turned out to be a septic tank problem which he didn't know how to fix. But, he left me with a non-functional toilet and no guidance on the problem. He just left....

When you use a home warranty company you don't have the control over who does the work or what work they do. I don't want to do that so I no longer even want a home warranty.

 

[jazz4cash]

It’s paid off for us. I never thought I would get one but it included 4 checkup inspections/yr so I tried it. They have since changed terms to exclude the inspections, dropped the rate and raised the deductible. I am still skeptical about what happens when we get a major repair like HVAC system so we’ll see. My advice is make sure you use it to get your money’s worth. Hasn’t been a problem for us with a 20 yr old house. We would’ve replaced our dishwasher and refrigerator that we bought with the house otherwise. I need to call them now to get ice maker fixed. They diagnosed some tricky electrical issues we had and got the utility to accept responsibility which we were unable to do on our own. I do no a few family members that cancelled policies from other outfits that did not step up when they had problems. If you have any reliable tradesmen that you know ask them if there are any home warranty companies they recommend.

 

[jfn111]

I've seen mixed luck with home warranty's that are included in home purchases.
The first is you have to prove the covered item was in working condition when the warranty was purchased. (This is usually reliant on the home inspection being thorough).
The second is additional charges not included in the repair. (One client found out her furnace had a cracked burner chamber. The warranty did cover a new furnace but not the changes required to hook it up to the existing duct work. She did get a new furnace and it cost her about $1,200)
The average cost is $500 for us to buy a customer a warranty so in some cases it has worked out OK for the customers.

 

[Ready]

I have never understood home warranties. How can a company charge $500 to insure all of the things that could go wrong in a home? Even the most minor of repairs could easily exceed $500. It would seem that they would do everything they can to deny coverage given how small of a fee they are collecting relative to the risks they carry. I don’t think a single year has gone by since I’ve been a homeowner where I didn’t have at least $500 in home repairs that needed to be done.

 

[38Chevy454]

My impression from friends that have went through a home warranty claim is that the warranty will do everything they can to just fix the immediate problem, no more. Even of the proper fix would be a more initially expensive, the warranty will only authorize a bare minimum fix. That bare minimum is hoped to get through the end period of the warranty. Not to ensure your problem is fixed and will not recur.

 

[DAYDREAMER]

The Internet and YouTube empower the DIY'r. Trying to get a company to warranty something would just add frustration to a task that is usually easily fixable, and relatively low cost, compared to paying a repairman at $100/hr!

 

[Big_Hitter]

I have one and it's paid for itself

in 2017 got a new high end dishwasher
in 2018 got a brand new 4 ton AC installed

I plan on keeping it at least until the other A/C unit craps out

 

[Big_Hitter]

I have never understood home warranties. How can a company charge $500 to insure all of the things that could go wrong in a home? Even the most minor of repairs could easily exceed $500. It would seem that they would do everything they can to deny coverage given how small of a fee they are collecting relative to the risks they carry. I don’t think a single year has gone by since I’ve been a homeowner where I didn’t have at least $500 in home repairs that needed to be done.

well mine stopped fixing boiler units, then of course our boiler unit went out right after we had the a/c replaced (under warranty) and i ended up getting a new furnace and a new water heater

 

[Big_Hitter]

The Internet and YouTube empower the DIY'r.

fixing a leaky toilet is one thing, putting in a new evaporator coil is another

 

[tb001]

They’re pretty standardly included in RE transactions in CA, so we’ve used the services. As mentioned, they will do anything possible to band-aid a problem. The quality of the repair people they sent out was atrocious. One person had 200 one star reviews on yelp and people said he frequently showed up intoxicated. Another person did something to ‘fix’ a simple problem with our sub zero that almost ruined the fridge. Literally every single time we’ve used them we’ve ended up having to call in our own repair person afterwards. The last time we had Amex dispute the charges on our portion of the bill after someone showed up, did nothing, and said he wasn’t the right person for the job.

We’re debating keeping our current home warranty after the initial period is up because we have 18yo AC and heater units. But I’m not sure we even want what they would install...

 

[travelover]

I think that the larger issue is insuring against losses you can easily cover. For people that live check to check, it makes sense to have car repair insurance, pet insurance, extended warranties on appliances - and on and on. But for people that are FI, it doesn't make sense to me.

 

[DAYDREAMER]

fixing a leaky toilet is one thing, putting in a new evaporator coil is another

Agree Hvac work is on the further end of the DIY'r spectrum. However, for the extreme DIY'r, it is actually doable. You really have to dig in to learn though! I became EPA certified online (took 1 hour and $50), so that I could legally purchase R410 for future possible Hvac issues. Currently learning how to braze copper line sets using nitrogen to prevent internal tube oxidation contaminates.

Hell, we are are retired! Need to keep the brain busy learning! HVAC has turned into a hobby of mine. Installed 12 ductless heat pumps for friends so far

 

[Scuba]

We had one for another home and they replaced the furnace and our pool heater, so we thought it was worth it. Just decided to buy one for our current condo. Our fridge went out last year and it cost us several hundred dollars to fix it. I’ve heard that the 16-year-old AC units in our building are starting to fail so thought it may be worth it to pay for a policy for a while. Ours is $35/month with no contract so we will see how long we keep it.

 

[Katsmeow]

I have never understood home warranties. How can a company charge $500 to insure all of the things that could go wrong in a home? Even the most minor of repairs could easily exceed $500. It would seem that they would do everything they can to deny coverage given how small of a fee they are collecting relative to the risks they carry. I don’t think a single year has gone by since I’ve been a homeowner where I didn’t have at least $500 in home repairs that needed to be done.

Well, they don't cover all of the things that could go wrong. Go read one some day. They have lots of things that they don't cover. Also, there is usually a trip charge that you have to pay so that probably covers the cost of many repairs. Also, you don't get to choose who does the repairs and what repairs they do.

Yes, sometimes, it does work out. I had one house that a warranty came with the house (sellers paid for) and it ended up working out well. But -- we didn't get one with our current house simply because we want to be able to choose who repairs our house and what repairs get done.

 

[SumDay]

We got a "free" one year home warranty from the real estate agent when we bought this house. The roof started to leak and now I see it only covers appliances.

I'd steer clear of any insurance to protect a loss that you can easily absorb.

Same here. And any repair people who would accept this as payment couldn't seem to get an appointment booked for us sooner than 7-10 days. Not handy when the dishwasher is leaking onto the hardwood floors. Not impressed at all.

 

[Bamaman]

Just about worthless. Best to have a separate savings account used to accrue funds for maintenance and repairs--under your control.

 

[ckelly78z]

If a home warranty is anything like an automotive extended warranty from someone other than the auto maker, leave it. They only cover specific things, and have to be documented to the point that it's a giant hassle.

My FIL had a horrible time getting anything approved for his truck.

 

[jazz4cash]

I have never understood home warranties. How can a company charge $500 to insure all of the things that could go wrong in a home? Even the most minor of repairs could easily exceed $500. It would seem that they would do everything they can to deny coverage given how small of a fee they are collecting relative to the risks they carry. I don’t think a single year has gone by since I’ve been a homeowner where I didn’t have at least $500 in home repairs that needed to be done.

You are correct, of course. The only way it can work is if many, many people just pay the premium and don't use the service, and I believe that is exactly what happens. I was expecting the worse when I signed up but have been pleasantly surprised. I generally have some dialogue with the service providers that come out and they usually say they don't have problems satisfying customers with this company's policy. They spent about $900 to fix a $600 dishwasher because it took 3 vendors to resolve. Some of the guys that come out are not top notch, but that can happen anyway and the liability is on the home warranty company.

 

[brucethebroker]

As a Realtor, I used to give Home warranties to clients who listed with me. The home was covered while on the market, then "transferred" to the new buyer. Some folks were happy with the coverage, some not. The biggest problem is people not reading the warranty info (outlined in a brochure) and just calling any repair company. The warranty people use their own repair companies and going outside their network results in major coverage headaches at the time of a breakdown. Most clients who called the warranty company first, at the time of claim, were pretty happy. But there are always people who what a new furnace instead of having a repair and then will complain about their warranty.

The warranty companies vary in service satisfaction. And that can change from year to year in my opinion. Do current research before choosing a company.

 

[Teacher Terry]

We have always bought one the first year of owning a home. Every time but one we ended up with a new appliance so definitely worth it. We never keep it beyond the first year.