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To add to the others: NO. NO. NO. UNLESS, you're selling and need it as some sort of benefit to the buyer, which they will learn in time that it's useless and not a good selling point after all.
Ah yes, here we go again. As usual, people who have never had a home warranty, have absolutely no experience with them, and have no clue how they work, always weigh in negatively and exclaim that no one should buy one. It is very similar to the Automotive Forum when the inevitable buy vs. lease discussion begins for the umpteenth time and those who haven't a clue about leasing always give their opinion that leasing is stupid.
Well, allow me to present a positive view of home warranties.
The house we bought in Las Vegas was 21 years old when we bought it in 2010, with mostly original appliances and HVAC (3 zone). The seller paid for a one-year home warranty for us and during that first year we encountered problems with our combination double wall oven/convection oven/microwave. The main issue was that the lower oven would not heat properly. We contacted the warranty company, they sent out a technician and it was determined that the requisite replacement part was no longer available. The warranty company then gave us the option of replacing the appliance with a unit of their choosing or taking the equivalent in cash. We took the cash and received a check for $2,714. I was completely astonished.
I decided then that I was definitely renewing that policy as necessary through the years. In the following three years (until we sold the house) we used them multiple times to repair our refrigerator, built-in wine cooler, HVAC units, put in a new toilet, garage door opener, and to replace a leaky kitchen faucet. Our annual premium was in the neighborhood of $450, so we definitely got our monies worth out of it.
All in all, we had an overall positive outcome with our home warranty company. YMMV.
Some of these companies are on the verge of going bankrupt. If you have higher quality appliances etc, they replace with cheaper.
I can see where it would work with a rental home as stated. Especially if you get the tenant to pay the service call.
I am interested in how they get the tenant to pay for the service call - not sure I would sign a lease that required that unless I was getting a below market rent rate. I understand the landlord's desire to have the situation to keep down frivilous tenant requests, but still.
I lean on the "no" side but do see several cases where it can make sense:
- Selling your house where you get listing coverage and use it as a selling point to the potential buyer
- The major items in your house are near the end of their service life (chance to have multiple items replaced for just a service call fee.
I have had 3 home warranty experiences:
1) Selling 20 year old house with original furnace. Bought listing coverage and 1 yr warranty for buyer. As part of home inspection, it was determined heat exchanger was rusted and they condemned it (was late summer so was AC season). Warranty company initially said "no way". Escalated to my realtor who was able to get the claim approved (because of the leverage he had through his agency which bought tons of these warranties through the company). [Lesson #1]
2) Selling my 5 year old house in 2012. Bought 1 yr warranty for buyer but did not buy listing coverage (5 year old house, why would you need it, right). The home inspection determined the refrigerant was low. Had to bring in my own AC guy to fix it. Also, condenser fan died before house closing so had to pay to get that replaced. Cost about $450 out of pocket for those 2 calls (listing coverage would have cost $80 + $100 for each service call). But I developed a working relationship with a very talented and inexpensive HVAC guy.
3) Move into my 10 year old house with a 1 year policy from a company provided by seller (not AHS). In early September, upstairs AC isn't cooling sufficiently. Call warranty company. They have someone come out the next day and take a look (from a city 50+ miles away which raises the hairs on my neck a bit). They come in, test capacitor, and in the process completely blow up the compressor (which was probably on its way out). So now I have no AC heading into a weekend. Instead of going to the local parts house to buy a replacement (standard Copeland scroll compressor used in a large number of HVAC installs), they have to get in touch with the warranty company to see how the case needs to be handled. The warranty company cannot authorize them to buy the part locally. They have to quote it out (which takes 48 hours), then once quote is back, order it, wait for it to be shipped to HVAC company who then schedules time to come install it. We were looking at 5-6 calendar days without AC (upstairs where the bedrooms are). I would have been on the hook for some additional costs (not as bad as the ones mentioned earlier in the thread, but several $100s. I call and ask instead for the buyout amount. I call my HVAC guy who is able to install a new AC unit (I took the opportunity to switch to new refrigerant and a more efficient unit as the coil was going to go next). He was able to install the new AC on Saturday - about 5 days before the other company would have been able to fix it.
Last edited by cheapdad00; 02-11-2017 at 08:43 AM..
Reason: spacing
I'm going to have to go with the "NO" team. I had HWA and i'm in Houston, TX. The warranty was a part of the sale package on a 5 year old home I bought in 2015. I accepted it willingly and settled in. After all, what could happen to a 5 year old home (with 5 year old appliances that weren't used and abused. The original owners were older people, the man died and the widow moved to an elderly folks home).
The AC unit died in the middle of August. In Houston. On Sunday evening (I came home to discover this).
I called HWA. They gave me the number of some AC guy. I called it, and the guy came out. He said something was wrong with the evaporative coil. He couldn't do anything until HWA approved the deal. He said it should be resolved and ready to go tomorrow.
HWA finally contacted me to the next afternoon to give me the GREAT NEWS (that's what the CSR actually said) that HWA was covering the evaporative coil. YAY!! I thought I would pay the $75 deductible, the guy would come back, do the job and I would have air again.
The OTHER part (the NOT good news) was that I had to pay for the "modifications" (whatever that was) and some other piddly s*&t and my portion of the payment would be over $1100.00. Oh, and I still have to pay the $75 deductible. I was so effin' angry I just hung up because I didn't want to go off on the CSR.
I remembered an acquaintance of mine. He's an HVAC tech with his own business, been in HVAC for 30 years. I called him up. He said he could get me up and running for $800. He asked me some questions about the AC unit, and ordered the evaporative coil that evening. I gave him the cash the next day. He installed that coil and I was in air cooled heaven that night. HWA called me about 5 days later to follow up with my case and I told them to cancel my policy and send me the refund for my unused policy.
Never again. I made a promise to myself that I would put that $500 policy charge in a savings account, and build upon that so I will never have to go through what I went through with HWA again. I don't want some random warranty company telling me "well we cover the parts that are needed, but we don't cover this.....or that....or the other!"
I ended up selling that home in 2016, but if I ever own a home again, I will NEVER NEVERRRR get another home warranty again.
OP if you decide to go with a home warranty company, at least try to make sure you have some savings or an unused credit card to back up any "surprises" they may throw at you.
This mirrors the experience I had at my current house with a home warranty provided by the seller.
We got a home warranty with a previous home the real estate agent paid for on any home sold over a certain amount. It was handy, we had a few repairs that year but didn't renew.
We do have the appliance plan through our gas company. We use that for annual furnace and AC check-ups, appliance repairs, etc. We also have the repair/replacement plan on our rental property. We've factored those costs into the rent we charge so it's "free" to us. It's also nice that they take care of finding someone to fix whatever needs to be fixed .
I almost got one but didn't. Adding up everything they would have covered that I have done myself (and still need to do myself) I have come out ahead with a fund of my own to draw from when problems strike.
My brother, however, likes it because he isn't good with budgeting. This way they budget for him in a sense. By taking $65/month and then fixing problems as they come. /shrug
Well, ours was $400 and the sellers bought it the first year - we used it once and it paid for itself. The next year we bought it and used it once and it paid for itself again.
The only thing we've used it for though is the oldest A/C unit. We will probably replace that this year and if we do we will not renew the home warranty most likely.
Ah yes, here we go again. As usual, people who have never had a home warranty, have absolutely no experience with them, and have no clue how they work, always weigh in negatively and exclaim that no one should buy one. It is very similar to the Automotive Forum when the inevitable buy vs. lease discussion begins for the umpteenth time and those who haven't a clue about leasing always give their opinion that leasing is stupid.
Well, allow me to present a positive view of home warranties.
The house we bought in Las Vegas was 21 years old when we bought it in 2010, with mostly original appliances and HVAC (3 zone). The seller paid for a one-year home warranty for us and during that first year we encountered problems with our combination double wall oven/convection oven/microwave. The main issue was that the lower oven would not heat properly. We contacted the warranty company, they sent out a technician and it was determined that the requisite replacement part was no longer available. The warranty company then gave us the option of replacing the appliance with a unit of their choosing or taking the equivalent in cash. We took the cash and received a check for $2,714. I was completely astonished.
I decided then that I was definitely renewing that policy as necessary through the years. In the following three years (until we sold the house) we used them multiple times to repair our refrigerator, built-in wine cooler, HVAC units, put in a new toilet, garage door opener, and to replace a leaky kitchen faucet. Our annual premium was in the neighborhood of $450, so we definitely got our monies worth out of it.
All in all, we had an overall positive outcome with our home warranty company. YMMV.
You are probably the exception to the rule or your local warranty company was better than most. Took them over a year to order the correct parts for my one year old house's heating unit. The first time we went to use it many months later (this is in FL where we don't need heat very often) it wasn't working. The warranty company blamed it on obsolete parts, ignoring the fact that the house was brand new, one year old. People think they will replace a broken appliance with a brand new one but that is not true. OP Read your contract very carefully, then read it again. Look up the reviews - there are far more unsatisfied customers than there are happy ones. That should tell you something. Like I said open a savings account strictly for home repair.
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