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There are lots of threads out there on this topic. While there will always be anecdotal stories where it worked out for a few, the odds are it will be a waste of money. Take the money you would pay for a warranty and put it in a fund for house repairs.
Agreed, it's not a good deal. If you think about it another way, these warranty companies are in business to make money (crazy, I know). If they are coming out ahead that means, in general, the consumer or customer is paying more into it than they are getting out of it. There are of course exceptions where this may have paid off for someone but those people are only thinking short-term. Maybe it paid off for them in 2 years but what about 5 or 10 years down the road when you've paid the warranty company thousands of dollars.
And someone will probably come on here comparing this to health insurance but that's an apples to oranges comparison as most appliances aren't "catastrophic" in nature and can be fixed/replaced for relatively cheaply. The HVAC/AC unit probably being the most expensive.
Look into it first, some companies are not reputable and deny everything and then you have to pay more for a second inspection and then they can deny that too. If you find a good company that's good. Keep in mind they only can make money if they don't have to do repairs. One major repair wipes out the cost that 10 people pay for the warranty.
Home warranties are a mixed bag. My mother had American Home Shield. One thing is they paid in the past (and still may) bonuses to contractors to trump up reasons why the thing broke that was the homeowners fault had one tell me I should have taken the refrigerator apart to clean the circuits inside, another claimed the sump pump was not correct and should have had a grinder (complete BS). Another big thing is they let the contractors declare normal installations "modifications. when I had the furnace replaced they claimed opening up the duct/plenum and installing to replace the furnace was a modification and charged us $1500. Also the parts they use are often bottom of the line cheap crap. Also the contractors themselves are hit and miss. Some are crappy or unreliable and the warranty company is the only way they can stay in business. Others are fine.
I guess with us time will tell. In our case, buying a second home several hours from our primary residence, with the original 15 year old appliances, not knowing that many people in the community who could give references, etc. led us to purchase a home warranty.
Another big negative is being locked into their "preferred" or partner contractors. I don't know about you, but I use the same, honest/reliable people for home repairs and I would not trust someone like this to work on my home without vetting them first. Plus, you're on their timeline so what if this company had 20 other claims that very day? You're stuck waiting. No thanks.
Relatively speaking, appliances are not terribly expensive and do not last long in today's day and age. Put aside money in an account that earns interest vs. sending it to a company like this so that in a pinch you can simply tap into that account. In most instances with older appliances it behooves you to simply purchase a newer appliance vs. trying to repair an older one.
I guess with us time will tell. In our case, buying a second home several hours from our primary residence, with the original 15 year old appliances, not knowing that many people in the community who could give references, etc. led us to purchase a home warranty.
This is kind of my situation. I have the funds to pay for the repairs, but I don’t have a network of reliable contractors, and I’m a very unhandy older female, so most stuff I can’t do myself.
Last summer, I had a plumbing issue. It turns out, the sewer line to the city main line was clogged. I have a long driveway for this area, and an augur wouldn’t work. The plumber said he’d have to hydro blast it out. Quoted me $3900 after asking me sq footage of house, how many bathrooms, etc. I said “hold on a second” while I called my plumber brother in law on the east coast. You should have seen the look on the guys face....the price instantly dropped to 1800.
I got another guy to do it for $800. This is what I’m actually trying to insure against - someone selling me something I don’t need, for 5x the cost.
This is kind of my situation. I have the funds to pay for the repairs, but I don’t have a network of reliable contractors, and I’m a very unhandy older female, so most stuff I can’t do myself.
Do you know any realtors?
The Established ones have a network of "Good/Reliable" ones they call on when there clients need a referral. .
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