Should I extend my Home Warranty?

[ItsNotMuchofaTail]

I bought a house 2 years ago. It was previously owned by an elderly couple who weren't able to keep it up, then sat vacant for a year. Included in the purchase was a home warranty, which I thought was a great idea because of the vacant nature of the house and uncertainty about the systems.

I did get my hot water heater replaced under that warranty, and something else with plumbing, I forget what. I extended it for another year just in case. The time has come to renew again, and I find myself wanting to cancel it. Most of my appliances are new (dishwasher, stove, fridge), there is no furnace (baseboard electric heat which my dad can repair cheaper than a $60 service call). BUT...my central a/c is over 10 years old (possibly 15 years, we have no records). I have the central a/c rider on my warranty, but if it goes under the warranty, I can't pick what to replace it with if they can't fix it.

The warranty costs 46/month, money that is tight in my budget. I have lots of debt (divorce) and I am a single mom. Not much savings (I know what I need to do, and I am working on it), but low interest loans are available if the unit goes before I have the money to fix it. I would want a high efficiency model, and I would like to be able to choose it myself, KWIM? if it comes to that.

I keep reading how much of a ripoff they are, and I didn't love the contractors they have sent out to do the work, but I haven't had trouble on claims. I feel like I just threw $500 away because I didn't use it this year, but if I did use it, it would be $500 well spent, ya know? Would you renew the warranty again?

 

[holycow]

In our family we always get the ins. When we didn't have it we had problems!
(of course!)

Have you shopped around? We have American Home Shield.

Have you looked at the policy and maybe thought you could take things off of it to reduce cost?

 

[HM]

I bought a house 2 years ago. It was previously owned by an elderly couple who weren't able to keep it up, then sat vacant for a year. Included in the purchase was a home warranty, which I thought was a great idea because of the vacant nature of the house and uncertainty about the systems.

I did get my hot water heater replaced under that warranty, and something else with plumbing, I forget what. I extended it for another year just in case. The time has come to renew again, and I find myself wanting to cancel it. Most of my appliances are new (dishwasher, stove, fridge), there is no furnace (baseboard electric heat which my dad can repair cheaper than a $60 service call). BUT...my central a/c is over 10 years old (possibly 15 years, we have no records). I have the central a/c rider on my warranty, but if it goes under the warranty, I can't pick what to replace it with if they can't fix it.

The warranty costs 46/month, money that is tight in my budget. I have lots of debt (divorce) and I am a single mom. Not much savings (I know what I need to do, and I am working on it), but low interest loans are available if the unit goes before I have the money to fix it. I would want a high efficiency model, and I would like to be able to choose it myself, KWIM? if it comes to that.

I keep reading how much of a ripoff they are, and I didn't love the contractors they have sent out to do the work, but I haven't had trouble on claims. I feel like I just threw $500 away because I didn't use it this year, but if I did use it, it would be $500 well spent, ya know? Would you renew the warranty again?

We bought one of those warranties when were selling our last house to help it sell (for the new owners). We've never had one otherwise. To me it's similar to other warranties that we skip...car, computer, appliance. We'd have spent way more on the actual warranty that it was to replace the things we've had to replace or repair over time.

It might be worth spending $99 on a hvac inspection/summer tune-up, to ask whether how long they think the unit will last. If it's in good shape, skip the warranty, if they think it's likely to go in the near future, keep it?

 

[Carter'sMommy]

I am a Real Estate Broker in several states and this is what I have found true about 'MOST" Home Warranty companies:

A couple of things to consider:

Have you had ANNUAL checkups on your central A/C? If not, or you cannot provide proof as in every receipt for the years you have had coverage with them it is possible they will say that you did not properly maintain the equipment and not cover 1 cent if it breaks or malfunctions. PERIOD.

Any HVAC repair person can tell you the exact age of the unit. It is built into the serial number - this is the case with ALL appliances.

I do not know where you live but another thing to consider is do you actually NEED a central A/C if it breaks?

I have lived in the deep south and AC is a REQUIREMENT no questions. I have also lived in the Pacific Northwest and we used our A/C for say 15 days during the most hot period of the summer. Not saying that it would be comfortable without it but it was an item that we COULD have done without if we needed.

If you do elect not to renew the policy and it goes out do you have the means to replace it? It can cost thousands to do so.

There is something to say about peace of mind... but it does have a cost

With all that said.....

They will only provide the BASIC replacement - i.e. "Builders Grade" regardless of what they are replacing unless you have purchased a specific "rider" to cover a specific upgraded appliance. Say your refrigerator breaks and you have a Whirlpool with ice and water thru the door. What they will replace it with is a BASE model - might not even have a freezer that is self-defrosting!!! I have seen this no less than 10 times. No Joke. Now, you can pay the difference to get the one you want but remember it is their price you are paying ($2,500 vs. identical item say at Lowe's that sells for $1699).

So if you have a wiz bang A/C unit keep in mind they will provide you with the cheapest possible replacement that might even cost you more in utilities.

I tell ALL of my clients to get one the first year (usually at the seller's expense) to cover the bases of things that might have been missed in an inspection. But after that... it is a crap shoot as to if it is really pays off. If you know the A/C is already having problems.... make darn sure you get your annual checkup to CYA and DO the required maintenance if they recommend to show good faith... keep the receipts and hope that you got a GOOD warranty!

 

[amylevan]

Personally, we would not. I prefer to put the money in savings to "self-insure", if you will. Of course, we aren't big on any extended warranty for anything. They never seem to be worth the money or the time required to get a claim covered.

From what I've read, they are likely to keep trying to repair a broken a/c, rather than replace it. And if it eventually comes to replacement, they are not going to let you choose the model, and you would definitely be better off with a high efficiency model that is going to save you money in utilities over the years.

 

[CyndiLooWho]

Like the others, I would dump it. We had one year on this house b/c we knew who built it and my dh was travelling a lot that first year. I was not impressed with the service people who showed up for the few things I called about.

With appliances, I subscribe to buying the largest capacity / best I can afford when we replace, simply b/c I'll have to live with it for the next decade. I could never deal with builder grade appliances. And when we replaced the builder grade HVAC units on our house with good Carrier models, our electric bills went down by more than 30%, BEFORE taking the rising electric rate. I figure we'll get our money back in energy savings in about 4 yrs. There is no way I'd let them install the cheap models they choose.

So I would go ahead and go w/o it, unless there is absolutely no way to replace something if it goes bad. And I bet you would be able to find something that works better for you than the warranty costs.

 

[kiki02]

OP. do you pay monthly and then ALSO PAY WHEN they show up?

How much does that come to annually if you had , let's say, 2 to 5 calls out to them?

 

[ItsNotMuchofaTail]

OP. do you pay monthly and then ALSO PAY WHEN they show up?

How much does that come to annually if you had , let's say, 2 to 5 calls out to them?

Its $46/month (I wasn't going to renew last year, so I hadn't budgeted/saved for paying for it, they called me relentlessly and wore me down with a "discounted" rate of $45/month for this year), then $60/service call.

And, they tried 2 times to fix my water heater before they replaced it, so it cost me $180. It was replaced with a no name brand, but the same size/capacity. The reviews on this company online are not great - First American - but my experience has been ok with them.

I do not have them means to replace it on my own right now, but if I continute the warranty and it breaks, I would be in the same predicament because I would want to upgrade from the builders model they would give me.

Thanks internet strangers, for the good advice. I am going to try and cancel it today. I know they will give me a hard sell...blech.

 

[LJSquishy]

Dump it! Totally don't need it.

 

[rsschneck]

We had never had a home warranty until we bought this house.

First house was bought was older and we bought it in 1993. Our realtor told us about home warranty insurance so we were oblivious. I have to say we never had a problem with the house and it would have been money not very well spent.

2nd house and 3rd houses were new and came with a builders one year warranty.

This is our 4th house and was built in 2006. The house had an owner, then renters and then it was vacant for 9 months. We did our home inspection (pre-purchase) in January when there was snow on the ground. Many systems were not checked because of the weather (like a/c) and vacant.

We knew we had a list of fixes when we moved in so my gut instinct told me we needed a home warranty. Our realtor split the cost with us for the first year. We used the warranty 5 times in the year plus still had to pay out of pocket for 2 refrigerator repairs. We went ahead an renewed the policy for this year. If we don't use the warranty this year then we will probably let it go. We have serviced everything in this house A/C, furnace, central vac, etc. so I think we should be okay even though there are no guarantees.

If you used the warranty and it paid for itself then renew again otherwise just let it go.