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Is a Home Warranty worth it?

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Ok, I have an 8 year old home and the Home Warranty is expiring soon. Is it worthwhile to renew or get a new Home Warranty? If so, which company would you recommend?

Thanks!

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No they are not worth it.

Have you ever used your warranty that is about to expire?

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No they are not worth it.

Have you ever used your warranty that is about to expire?

I have used it, but I don't think I was provided a great service and the $60 service fee each time, regardless of if anything was fixed, was a bit excessive.

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I have used it, but I don't think I was provided a great service and the $60 service fee each time, regardless of if anything was fixed, was a bit excessive.

If you look up reviews for different companies that offer home warranties you'll find that most get a grade of 'C' at best. No one is ever consitently satisfied about the service they get when something does come up. Thats probably because the service you get will vary greatly on the vendor who's contracted to work with the warranty service company.

I bought a house half a year ago and the seller included a home warranty for a year. It was included as part of the sale so we didnt need to pay for the service BUT we do have to pay the $60 dollars on any housecall. If they come up diagnosis for the problem, you need to pay for the parts to fix it. No biggie if its an inexpensive part but if you decide not to do it, you're out the $60. So it comes down to the contracting company that does come to work on the problem, sometimes they can be good at what they do and be very efficient but you never know. We've had two housecalls for minor things (light/electrical switches and garbage disposal) and I would say we're 1 for 2 in terms of being satisfied with the outcome but both were fixed adequately.

Since home warranty services rarely cover big problems, you can probably do without it if you're pretty handy with small fixit things or have a friend who is rolleyes.gif .

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Generally speaking, extended warranties are bad ideas. If the warranty companies didn't make money off of them, they would all be out of business.

Specific to Houston home warranties, I read a LOT of reviews (we're buying a house). It seems that people often experienced delays, poor service, communication issues, repairs when items needed replaced and when it came to big ticket items - reasons why the repair was excluded from the warranty service (a favorite seemed to be 'you didn't maintain x properly').

I've never had one, but I would say no.

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I got one from Allied with home purchased and it paid for itself 2-3x in the first year (AC problem, range cartridge, plumbing leak). This year nothing radical happened yet so I am probably in the red. I'll probably keep it for another 1-2 years to get a feeling whether any other major things are solid.

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I have a slightly more nuanced opinion. I had an old house (1930s vintage bungalow) and home warranty paid off handsomely there: it replaced AC and central heat. Additionally, plumbing problems with an old house can be very expensive. The downside is that home warranty companies usually pick cheapest contractors they can find with corresponding impact on quality of work (I recently had a contractor trying to convince me to rip all of my ducts out because they are not sized correctly. This was given as explanation for heater not coming on. The real reason was an air leak blowing the flame towards wires connecting the flame sensor - a 15 cent fix).

So:

- if you have an old house with potential for problems

- and you understand a little bit about household equipment

they can be an OK deal

Otherwise, steer clear.

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I've had 2 different experiences with home warranty, I'll start off with the good one. BFS Home Warranty is great, they have all in house repair guys and their deductible is $55 each time. They did some extensive repair work with the A/C and minor stuff with the oven. I've also had Home Warranty of America, they contract out whoever and had the worst experience ever. Guy tried to screw around with my damper system, only to come find out the warranty didn't cover it in the fine print. He quoted me about $2000 to fix it and there was nothing wrong with it.

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Compare the cost of a home warranty with the value of the peace of mind that a home warranty can provide. (It may be worth it to you to know that if any of the covered systems need repair or replacement within the first year, they will be fixed for the price of a service call fee.)

  • Each warranty company is different. Read the contract to identify what is covered before you sign.
  • Each contract has limitations, conditions and restrictions. Read the contract thoroughly.

That's kind of how I feel. If you have a newer house, it's probably not so much worth it, but an older home where any number of items an go wrong, it might be nice to know you have a plan in case something goes wrong and won't break the bank (YOU) when it comes to repairs. Also, different warranty companies have different rates and services they provide.

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Note that only one company even rated a 3 out of 5 in their reviews. Let me be blunt. If you need a home warranty, extended warranty, or any other warranty other than the one that came with the product, chances are you are not managing your money correctly. If you would simply SAVE the $300 to $500 a year that you pay for these warranties, you'll come out way ahead. There simply is not much that these warranties cover that costs more than one or two years of the warranty. Even a completely shot AC unit can be replaced for $1000 or a little more. In 10 years of home ownership, I have had to replace or repair an AC compressor and a very small repair on a dishwasher. The dishwasher repair was actually covered on a home warranty that a seller gave me, but the actual cost was only $20 more than the deductible, and $225 less than the cost of the warranty. The AC was $1000, but occurred 4 years after I bought the house. If I had kept a warranty the entire 4 years, I would have paid $1200 in premiums plus a deductible for a $1000 repair.

I really don't know how to say this more strongly. QUIT WASTING YOUR MONEY!!! Buy good quality goods and ditch the extra warranties. And, seriously, if your stuff is breaking that often, you really should learn to take care of it better. For all of our gripes about quality, I rarely have any vehicle, appliance or electronic component break. It simply does not happen. Perhaps I do not buy enough crap, but if that is the reason, it may be a plan worth following.

EDIT: Oh, and to the poster with the bungalow...older houses are EASIER and cheaper for plumbing repairs than newer ones because the plumbing is exposed under the floor joists, as opposed to buried in a slab. There is also far less plumbing in an old house than a new one. I replumbed my entire house for less than a couple grand. Try that on a slab house.

Edited by RedScare
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I have used it, but I don't think I was provided a great service and the $60 service fee each time, regardless of if anything was fixed, was a bit excessive.

I've had the a/c guy to my house now a couple of times... guess how much the service fee was? ~$60. And I don't have a home warranty!

Extended home and auto warranties should be illegal. They are a total rip off.

Your house is only 8 years old? That's still brand new, in house years. Don't worry. The major problems won't really show up for another 22 years. Dump the house in another 10 years, and you won't have anything to worry about...

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A big problem with home warranties is that you don't get to choose the contractor. The warranty company does. In some cases, the warranty company only uses one contractor, and that contractor may prove to be incompetent or unavailable for several days after you actually need them out.

I currently have an issue with a broken appliance, and the contractor chosen by the warranty company missed the scheduled appointment time. Phone calls to the contractor go straight to voicemail, and the contractor does not return phone calls. Even more aggravating is that the contractor tells the home warranty company that they showed up, but nobody was there, when in reality they probably got busy and just skipped the appointment. The lying about it really irks me. I requested a different contractor from the warranty company, but they only use the one contractor for appliances.

I think the better solution is to find a good, trustworthy contractor for the particular problem, and call them directly. Case in point, I had a plumber fix a gas leak issue for under $50, when a certain large local plumbing company wanted to run entirely new lines for several thousand. This wasn't through the home warranty, but the point is that I can get the work done cheaper and better with the right contractor, unless it happens to be a catastrophic breakdown of something major (like AC) in the first year or two of the contract. I don't see myself renewing.

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So they generally are part of the contract when you buy a home to avoid lawsuits. (IE the fridge broke I bet the sellers knew are going to court) If I was selling a home I would recommend giving one to the buyer.

After a year or two I would consider the house. If everything is fine I would avoid it. If the AC is making wierd noises and the dishwasher is having issues I would probably renew it.

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So they generally are part of the contract when you buy a home to avoid lawsuits. (IE the fridge broke I bet the sellers knew are going to court) If I was selling a home I would recommend giving one to the buyer.

After a year or two I would consider the house. If everything is fine I would avoid it. If the AC is making wierd noises and the dishwasher is having issues I would probably renew it.

worrying about fridge is so minor....... otherwise don't be a homeowner.

Edited by musicman

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