Home Warranty Insurance? Tell me the good, bad and the ugly

[hereyago]

Hi.

I am interested in buying home warranty insurance. I received the "offer" via my mortgage company. It covers, heat/ac, water heater, stove/oven, electrical and plumbing systems washer/dryer,etc.

85.00 deductible. 45.00 a month. up to 50,000

What have been your experiences? TIA

 

[LJSquishy]

That sounds like a huge waste of money to me. Save the $45/mo yourself for a rainy day.

 

[Gigi22]

Check your existing homeowner's insurance policy to find out what it covers. You may already have better coverage than what your mortgage company is offering. If that is what you find out, I suggest you inform them.

 

[dhardawa]

I agree with the earlier poster. Sounds like a waste of money to me. You'll be paying $540 a year. Most of the items you have listed could be replaced for that amount. Save the money in a rainy day fund and don't throw it away on unnecessary insurance.

 

[TJHutch]

I have to disagree...we have home warranty insurance and used it on two occasions in 2011. If we wouldn't have had that insurance it would have cost us over a thousand dollars out of pocket. Yes, the home warranty is worth it.

 

[summermac]

I normally would say to decline it but my BIL/SIL just had their heater go out on a house they bought not even a year ago, as in it went dead their first winter (this year) and thanks to their home warranty it only cost the premium for the year + the deductible.

I don't think I'd buy it for my home that I own now because it's new & we literally built it ourselves. But if I were buying a home that someone else owned and that was older I'd consider it, at least for the first couple of years and depending on my own personal savings.

 

[Sadie22]

Home warranties are often offered by sellers or agents when a house changes hands, so that if something goes out in the first year of new ownership, the home warranty covers that. Otherwise, appliances have their own warranties which are often automatically extended when purchase is made with certain credit cards. Homeowners insurance should cover larger losses and savings the smaller ones.

My washing machine went out last year but it was about nine years old. My big microwave just went up. DH first tried repairing both of those, and then when he could not then we made the decisions to replace them. A set payment of $540 a year just in case something breaks is a lot of money. We save our money to cover replacement parts and replacement appliances. Extended warranties are a money maker for those who sell them, and not often are they a bargain for those who buy them.

 

[midwestdee]

The losers we bought this house from had the "home warranty" through caldwell bankers - well, the trick is you pay for them to come out and if the repair needed doesn't fall into the covered category, you foot the entire bill. The dishwasher leaked - when we called the warranty place they basically told us it was a crap shoot for them to come out (our idiot inspector dropped the ball on that and several other things). We just replaced it and I swear I will never purchase one of those stupid policies when we sell this house, it is a scam that makes the realty companies a fortune. I think the previous poster that suggested you just sock away that amount of money each month for repairs was on target - great idea.

 

[Golf4food]

Better to save that $45/mo and keep it in a savings account you can access easily. Most warranties are a rip-off and just make money for the company without providing any real help for most purchasers.

 

[auralia]

One came with our house one month later the ad went out they refused to cover it and said it had not been maintained but we had a receipt from when it had been inspected before purchase and they claimed we made the receipt on the computer and invited us to sue them over it so worthless!

 

[DopeyDame]

that's a ton of money for what will most likely be a completely worthless piece of paper. I realize there are a few instances here or there when something major breaks and they do cover it, but $500+ for that rare occurance doesn't seem worth it to me.
We got one for free for a year when we bought our last house. When the dishwasher stopped actually cleaning the dishes and started making this loud hideous grinding sound we called them. They said since it was still operating (as in water was flowing and a motor was turning) it wasn't broken and they wouldn't do anything.
We were just glad we hadn't paid for it.

 

[terzy]

That sounds like a waste of money and time

 

[riley2008]

We had a home warranty with our home when we purchased 2 years ago. The a/c went out both upstairs and down. The warranty was great in that we only paid the $40 co-pay for each visit. Bad part was they never fixed anything and just rigged it. If the "repair" lasted more than 30 days, we paid another $40. Got fed up and we paid ourselves to replace one unit inside/out.

When our kitchen faucet began dripping and they couldn't locate a plumber in our area that would accept their contract after two weeks. They left it up to us to locate the plumber, have them call with an estimate prior to repair and then they would consider the approval. The leak went from a drip to needing the water turned off, we finally found someone. Couldn't get through to the home warranty company as it was after 5:00. Plumber recommending replacing whole faucet due to several issues. We went out purchased faucet and he came back about 7:00 to replace. We paid him and only asked home warranty for reimbursement for labor. Home Warranty declined as it was not preapproved. (Basically home warrranty didn't save us anything and gave us a headache for about a month. Hindsight, we should have just gone out and replaced the faucet ourselves the night we noticed the leak.) Also, the home warranty didn't cover faucets on the outside of the home - waterhose faucets that drip.

When our old dryer went out and we called; they didn't have any providers in our area again, we dropped them at renewal. Save the money and especially the headache.

Home warranties - when they work, they work great; however there are usually more headaches in the long run.

Stepping down off of my soapbox now.

 

[hereyago]

Thanks to everyone who posted. I wasn't sure if I should get it as appliances aren't on the newish side, either are heat and a/c.

 

[Gina]

I guess I'll be the dissenting opinion, lol. For me it's totally worth it. I'm a single parent and have no knowledge/experience/desire to be a DIY-er when things break, and most everything in my house is at least 10+ years old. I have used the home warranty for burst pipes, broken microwaves, dead defroster elements in freezers, dead ceiling fans, and most notably, a dead air conditioner. The condensing unit alone would have cost me nearly 3 grand, and none of the other repairs would have been cheap either. The $45 a month I spend is peace of mind -- I would have to save that for years, without having a single repair, in order to have enough saved for a repair such as the A/C.

The warranty plans are not created equal, though -- I found big differences in what they will cover and the amount of hassle you have to go through. The one I switched to several years ago is much better and covers a lot more than the company I was with previously.

Bottom line is that for me, it has definitely not been a rip-off at all. Instead it has really been there for me when I needed it.

 

[disneycruising]

When we purchased our home 7 years ago; it was only 2 years old and it come with the home owner warranty. In the first year the air conditioner for the upstairs when out and it was covered. Plus, our sons shower had be worked on.

We have ended up renewing every year & every year it has paid for itself. In seven years we have had: the heater has go out, the dishwasher leaked, washer-- gone out (3 times), dryer --worked on (3 times), water heater went out, fan in bathroom died, lights in kitchen stopped working, stove top, one toilet has been replaced, the water system worked on. Plus our refrigerator has been worked on every year.

For me it has been really nice... to just call someone and let them deal with it.

 

[hereyago]

I guess I'll be the dissenting opinion, lol. For me it's totally worth it. I'm a single parent and have no knowledge/experience/desire to be a DIY-er when things break, and most everything in my house is at least 10+ years old. I have used the home warranty for burst pipes, broken microwaves, dead defroster elements in freezers, dead ceiling fans, and most notably, a dead air conditioner. The condensing unit alone would have cost me nearly 3 grand, and none of the other repairs would have been cheap either. The $45 a month I spend is peace of mind -- I would have to save that for years, without having a single repair, in order to have enough saved for a repair such as the A/C.

The warranty plans are not created equal, though -- I found big differences in what they will cover and the amount of hassle you have to go through. The one I switched to several years ago is much better and covers a lot more than the company I was with previously.

Bottom line is that for me, it has definitely not been a rip-off at all. Instead it has really been there for me when I needed it.

Thank you for your post. I am same as you: single parent and my mom 78 lives with us. Before it was my DF who would take care of things: before his passing he had worked as a maintenance man and also mechanic.
Then my exdh would help until recently. I wish I knew how to fix stuff, I so should have paid attention to my DF.

Appliances/ heating and ac are older(and I"m not sure what the life expectancy on these things are).

I did send my paper in for the 30 day review, and that is what I will do as well as look around at others, compare and see if this is something that will give me some piece of mind.