Home Warranty - Should I buy one? How do they work exactly?

[Schfifty Five]

I bought a home about 6 months ago. It was built in 2001 and several of the appliances while working, are becoming old. HVAC and downstairs water heater is also pretty old and I believe might need replacing within a few years.

Anyway, if I were to buy a home warranty, how much would it cover in the event I did need to replace something?

For example, my AC units are probably as old as the house, so almost 15 years old. If I buy a home warranty policy today, and the AC units go bad next week, would the warranty cover the cost of a brand new unit? Or would they just provide the cost of the fair market value of my units (which could only be a few hundred bucks or less).

I'm just wondering if I spend $500 on a warranty, and my AC unit goes bad or water heater goes bad, and the warranty provider only gives me like $100, I'd be losing out in the end. But again, I don't know much about home warranties.

Any advice would be appreciated!

 

[edro]

https://homewarranty.firstam.com/en-us/landing-pages/homeowner.aspx#whats-covered
Link to actual coverage and limitations: http://www.firstam.com/assets/title/wa/king/home-warranty-brochure.pdf

Ours only covers repairs and there is $60 service fee.
They will replace after they attempt repairs a few times.
The replacement is bottom of the barrel and may not match existing appliances.

Be careful, there are multiple levels of protection. You need to read the limitations closely.

For example:

PLUMBING STOPPAGES•Clearing of stoppages in sink, tub, shower drains and water closets (toilets). Clearing of sewer and mainline stoppages (including hydrojetting if stoppage is unable to be cleared with cable) to 125 feet of point of access where ground level cleanout is existing. Clearing of lateral drain lines to 125 feet from point of access including accessible cleanout, p-trap, drain or overflow access point, except;

Not Covered:Stoppages caused by foreign objects, roots, collapsed or broken lines outside the main foundation, access to drain or sewer lines from roof vent, costs to locate, access or install a ground level cleanout and removal of water closets (toilets)

Most of the big item maxes are $1500.

 

[gururu2]

They are junk in my opinion. They gladly send someone over to diagnose a problem which is an automatic 40-100 dollars out of your pocket, then they play hardball when you want to have something actually fixed or replaced.

 

[Blain]

If you're "selling" a home, buy the warranty...
It gives the buyers a warm feeling inside.

 

[zardthebuilder]

don't expect a home warranty company to replace the entire appliance or unit. they will repair and repair and repair. i am amazed at how they have an endless supply of ancient parts. i have a home warranty right now because my seller bought it for me. i have no plans to renew. with my last house, i had a home warranty that i bought myself. (that was when i had almost no home repair skills.) their plumber wouldn't change out a fill valve and insisted i needed a new Pressure Reducing Value, which was not covered by the warranty. my pressure was fine, so i learned how to change the fill valve myself. the warranty company wouldn't cancel the service fee, so i canceled the warranty.

 

[Schfifty Five]

Thanks for the replies everyone. It has made me think twice about getting one.

So does getting a home warranty only really make sense for newer items that are only a few years old?

If my major appliances are considered pretty old and would need replacement soon, seems like getting a home warranty would end up costing me more, right?

 

[JimKiler]

If you're "selling" a home, buy the warranty...
It gives the buyers a warm feeling inside.

My realtor did that on our 7 year old townhouse.

I also have one from 2-10 home buyers warranty (for free with buying the house) but so far my builder just takes care of it themselves. Apparently it costs them too much money to go through the warranty and I know if I go through the warranty there is a deductible of at least a couple hundred before they will reimburse me.

 

[zardthebuilder]

yes, i try to self-insure as much as i can. overtime, if you are disciplined, you will come out ahead if you save away the premiums and service charges. i don't buy extended warranties on anything. i drop auto collision and comprehensive when the car is about 3 years old. the only insurance that i don't skimp on is liability insurance.

home warranties might be okay for those who have no discipline. otherwise, these folks would spend their emergency fund on a vacation, and go to a payday lender when their HVAC breaks.

 

[DrPizza]

The warranty companies aren't doing so out of the kindness of their hearts - they're in the business to make money. For the vast majority of people, they pay more than they get. Unlike health insurance or homeowner's insurance, there really isn't a low risk of some catastrophic problem. E.g., cancer, or a fire that burns a house to the ground. Your real risk is the cost to replace those appliances. Thus, you're much more likely to pay $2000 over a couple years and get $1000 back in the form of some service, than you are to pay $2000 over a couple years and get $2500 back.

 

[mizzou]

all warranties, even the ones in best buy, are prettybmuch considered pure profit

 

[SparkyJJO]

Just pay for the replacement stuff when you need to instead of paying for them when you don't need to via a warranty. You can save up the money yourself by just putting some aside each month so when something does break, you have money for the purpose of that repair.

 

[Binky]

I bought a home about two years ago and it came with a warranty. Basically, you pay $400-$600 per year depending on the options, then any service call is billed at a given rate. Ours was $75 for a service call.

We called for service a few times for minor plumbing issues, and got billed the standard $75 service fee each time. I asked each service tech what the cost would have been for them to come out and do the repair without the warranty, and it was less than $75 every time. I would have been better off just not using the warranty, and I didn't even pay for the warranty contract itself.

Unless something really goes wrong, they are not money-saving options. How often does your AC unit need a major repair?

 

[jaha2000]

My AC unit took a dump and i had it replaced. They use aboslute bottom of the barrel cheapeset crap they can get thier hands on.
Its not worth it IMO

 

[Schfifty Five]

Thanks everyone for the replies. Sounds like a home warranty is kinda not worth it, unless it was already paid for by the seller, or given as a gift.

I will pass on any warranties for now then.

 

[SilthDraeth]

I know the OP has made his mind up, but I have had a different experience. I bought my first house back in 2004, and the warranty thing was added in, but it was a one time payment of like $300 I think. Anyways, a few months in our oven stopped working. It was a double oven, so it had an oven down below, a range on it, and a 2nd oven above the range. Anyways, my fee was $50, and they were going to replace it with another double unit, or I had the option of getting the cash value of the double unite, which turned out to be $1000. So I took the check, and bought a new basic $300 oven. And I was a happy camper. Then when the AC/Heater went out, bam, had that replaced for $50.

Fast forward years later, my mom got one on her house, and she is the type of person to not really save, but she also is on social security disability due to her chronic pain, and never has any left over money to save really. Her warranty has replaced her dishwasher, AC/heater, stove, and water heater, all at $50 a pop.

So for myself and my mom, it has worked well. Myself, just a case of luck I guess. For my mom, it definitely was invaluable.

 

[slightlyhuman]

Bought a house in June. Seller said it came with warranty. AC had issues. Paid $600 to get it fixed. After 2 months I started asking where the check was to reimburse me. They said it was sent over and over Eventually they even told me what day it was cashed. The fucking previous owner cashed it. I facebooked him asking about it and he played dumb saying he doesn't know anything about the check and that he would ask the wife.

Never got a reply asking a month later if he talked to his wife. I called the warranty company(2-10 is the company name) and asked why it was sent to them and not me. They said the checks could only be sent to the previous owner. It was a back and forth thing that ended up me getting fucked.

Not sure where I stand on the warranty. I guess I failed to ask about the proper information about what kind of warranty I had but the first time around left a sour taste in my mouth.

 

[adolfotx]

So far, my home warranty has been good to us. I pay a $75 fee for any callout. Recently, I had an issue with my 40 G natural gas tank water heater. My HW is paying $579 for the replacement. I am converting to tankless (to save space) and am being mailed a check for that amount to use toward the tankless.

 

[Blain]

Bought a house in June. Seller said it came with warranty. AC had issues. Paid $600 to get it fixed. After 2 months I started asking where the check was to reimburse me. They said it was sent over and over Eventually they even told me what day it was cashed. The fucking previous owner cashed it. I facebooked him asking about it and he played dumb saying he doesn't know anything about the check and that he would ask the wife.

Never got a reply asking a month later if he talked to his wife. I called the warranty company(2-10 is the company name) and asked why it was sent to them and not me. They said the checks could only be sent to the previous owner. It was a back and forth thing that ended up me getting fucked.

Not sure where I stand on the warranty. I guess I failed to ask about the proper information about what kind of warranty I had but the first time around left a sour taste in my mouth.

Sounds like you have a good shot at a small claim suit against the previous owner. He got reimbursed for $600 YOU PAID... That shouldn't fly.

 

[Red Squirrel]

Depends how handy you are and how much time you spend home I guess. If you have some crazy 80h/week job and you simply have zero time to deal with anything that goes wrong then maybe it's worth it, but generally I think it's best to just try to set aside some money for emergency. Figure how much such service would set you back each month, and just take that same amount of money and put it aside.

These companies will scare you with things like "a furnace is like $5,000 to replace!" but you have to ask yourself how often these break down to the point of needing to be replaced. Often it's a part that wont cost more than $100.

For other stuff like water damage, it's just the thing of being proactive. During heavy rainfall check everything like the basement walls for any signs of water, check windows, ceilings etc... if you spot even a tiny sign of water getting in then act on it asap. Go on your roof at least once a year and just walk around, checking for any shingle damage or what not as well.

 

[slightlyhuman]

Sounds like you have a good shot at a small claim suit against the previous owner. He got reimbursed for $600 YOU PAID... That shouldn't fly.

I'm going to dig into the warranty info that the title company gave me and check into a few things. I do know it wasn't a $600 check, like 60% of that was reimbursed. I honestly said fuck it a while back after he didn't reply because he seems to hurt for it way more than me if he's going to cash a random check that he knows nothing about.

He pretty much knows he's shit, that's really enough for me

 

[Zorba]

My last experience with a home warranty that I got when I bought my house. The bathtub needed some plumbing done. Called. The first company they assigned to us was from 40 miles away (I live in the largest metro in the state) who had an F on the BBB. We protested, so they assigned a different company. This time a company from out of state, what was NOT licensed in Oklahoma, who had a D on the BBB. When we protested, they told us we didn't get to choose and we had to use them (even though it would've been illegal for them to work in Oklahoma). Anyways, I just did the work myself.

My father in law had a warranty while selling his house. His heat pump died. Well after they tried fixing it a few times, they finally agreed to replace the entire system. Long story short, the it took them 2 months in the dead of winter over countless trips, before they declared it fixed (one problem is he had to get parts from the warranty company, not locally). Anyways, 1 week later it broke again. Finally, my father in law called his normal HVAC, who had to redo the entire install and replace the brand new furnace, but it was working the next day. BTW: Again the company the warranty company sent out to the replace the HVAC system was not licensed to do HVAC work and was actually an appliance repair company.

Any ways, I've had a few other experiences with them, absolutely none of them of been positive.