Home warranty insurance, is it worth it? (foreclosure, appliances)

[debvic]

We are purchasing a REO home built in the 80s with some known issues. What everyone's take on home warranty insurance for the major systems like ac/ heat,plumbing,electrical? Don't need appliances covered as they will be new. Anyone have experience with America Home Shield?

[SoFLGal]

I've had several people who have used American Home Shield and they have been happy with it. It must be purchased through an agent.

[d4g4m]

Read the fine print. You will discover that most policies are worthless. CNBC 'American Greed' had an expose of a company that was ripping off purchasers for hundreds of millions of dollars.

[Sunshine Rules]

I have used American Home Shield in the past, actually bought a one year coverage plan for my current home when we closed as the AC was working but was at the end of it's economic lifespan. During the plan period the dishwasher needed to be repaired the the air handler died. Both were fixed under the plan. However, you don't get options as to the service tech they send out. On the dishwater, the tech found the problem, got a replacement part and had it fixed within 2 days. On the air handler the first tech they sent was inept, after several discussions with the home warranty customer service reps they finally agreed to send out someone else to handle the call, resulting in our getting a replacement air handler. But it took patience and time.

Before signing up for any home warranty plan, read ALL of the fine print carefully. As they say, the devil is in the details. On most plans you must call the warranty company first on any covered appliances or components, you cannot call a repairman yourself and ask to be reimbursed afterwards. Even if it will take 2 or 3 days for the warranty company's designated service tech to come out. Under certain circumstances they will expedite your repair request if it is considered an emergency. (Note: They normally do not consider the AC quitting in July to be an emergency.) They do not make money by allowing exceptions to their multiple rules.

Most plans have a statement somewhere in the pages of terms stating the covered components must be functioning properly at the time the policy is purchased. So hang on to the copy of your home inspection report in case you need to verify condition later on. If the known issues you mentioned are items you are hoping to cover and fix under the warranty, you may run into a battle with the warranty company if you try to have those items repaired under the warranty plan.

So my suggestion would be to read the entire home warranty policy from cover to cover, then decide if it will be of benefit to your circumstances.

By the way, congrats on your purchase.

[dpbarr2000]

If you are buying a foreclosure, many times the bank will offer the home warranty free of charge. If they aren't offering it up front, make sure you ask for it in your offer. There is a provision for a home warranty in the FL as-is contract.

[hibscus]

We purchased a 1969 fixer upper and used American Home Shield with the lowest copay. We insured everything and came out ahead - had the refrigerator repaired, pool pump repaired, well pump repaired, $1000 towards repiping the house and water softener replaced. All these things broke in the first year despite a clean inspection report. They will repair vs replace for most things -but when we had it, there was no plumber under contract with them so we were able to choose the plumber and get those things replaced.