What Are the Pros and Cons of a Home Warranty Program?

Seems that with most home warranties and air conditioners, they won't replace anything until the unit actually goes out. They don't care if it is going out. And once it does go out they will only cover the actual parts that went out, and will not cover a new ac unit. I do not recommend them.

Hey D.,

Our house is 40 something and I keep one on it. Remember they are only going to fix "Normal wear and tear". Check out the company. Some are know for not fixing items for Pre-Existing conditions and some will do quick fixes.
My husband is not a handy man, so it is great for me to be able to call someone and know for $55.00 service fee, it will be fixed or replaced quickly. I will not have to wait for my hubby to try to do it when he has time. Last year we had 5 plumbing claims. Some of them could have been fixed for a few dollors, but some of them were bigger bucks. They also replaced the pump and motor on our pool for $55.00. I have Allied Home Warranty at this time. They have not denied a claim yet. 866-791-1200

D., I am a professional Real Estate Consultant with years of good experience using Home Warranty companies. The best ones out there, in my opinion, are Home Warranty of America and American Home Shield. Signing up for a 1 yr coverage plan would make sense should you have to use the policy. All should be in working order though because they will deny claims on services that occur immediately after the coverage takes effect. Getting your HVAC serviced with a clean bill of health would be worth the money should 4 months from now the unit stop working. This does not mean efficient, just in working condition. The coverage has lots of benefits and will pay for itself should appliances, plumbing, etc be repaired. Remember all policies have their levels of coverage and deductible trip fees for the service calls. If you would like additional information, please let me know as I can offer the contact information for your additional detailed questions. Good Luck! W.

I would not waste my money. Most of them only deal with "normal wear and tear" and end up covering a portion of the repair by "their" repair people. Also the wait time can be ridiculous. Can you really wait 2 weeks to get your AC fixed in Texas in July/August when it is 106 degrees so they can "approve" the claim? Not me - I have two small children and we ended up calling someone else out to fix it which didn't cost much more than it would have if we used them. Put $55.00 a month in a special savings account for these issues and use that money to pay for repairs. I don't have the time or the patience required for these warranties!

Whatever you do, be sure to read the fine print. We had a home warranty with our home for the first year (the seller paid for it as part of our closing contract) and when it came time to renew, we chose not to because it wouldn't cover any of the problems we foresaw happening. We've had friends who have had terrible experiences with home warranty companies doing bad repair jobs, causing more damage and then refusing to fix the new problems. It would have been cheaper (both financially and in terms of time spent getting the problem fixed) to have just paid out of pocket to a reputable repair company. Personally, I'd rather direct deposit $50 a month to a savings account so I can pay for a repair when it happens rather than pay a warranty company.

We had it when we first bought our house. The hot water heater and a pipe burst in the wall/ceiling on the second floor under a toilet. We were forced to go with the brand repalcement the warranty company supported which was substandard. Before you sign up, I would find out what brands they support.

We have a home warranty through American Home Sheild. We pay a $55.00 service call fee when someone comes out to fix something. We have found it a godsend. Now one thing you will have to understand that when you have a home warranty, you use their contractors. Now they will fix things, but when it comes to replacing parts on something you have to go through a process, that can take a little long than if you were a "regular" customer. We had to have a part replaced on our air conditioner right before summer started, and it took about 2 1/2 weeks from the first service call to the final repair. There had to be approval through the warranty company, BUT they did cover a portion of the repair, so we did not have to pay the full price. So it was worth the wait!! I would highly recommend it, AHS has been very dependable. You can do service request through their website, so easy!! We renew ours every year, when you budget it out ours comes out to be about 60 bucks a month. Also remember you can choose what you cover and what not to cover, obviously the more you cover the more it cost :)

We have a home warranty and it is great. It covers pretty much everything. We used it once in our old home (it was 30+ years old) and the a/c went out. The people came out that very day, it was just the circuit that blew (stupid us). We still had to pay the $55 fee but the a/c guy said he was going to go ahead and service it for free since he was already out and we had to pay. It would have cost us at least $55 to have someone come out without the warranty. Our new house is only 3 years old and we have it on that one as well but mainly for our appliances. We bought an extended warranty on our fridge for $75 and they had to come out so many times that it was cheaper to just get the home warranty and cover ALL of the appliances.

I think that a home warranty is a must!

We have American Home Shield and have used it numerous times. You do pay a monthly fee and if you request service there is a copay. Ours is $55 per service call. I do think it is beneficial to have. If something messes up you call it in and they send someone to fix it. You are out your monthly fee and copay. If they can't fix it then they will replace it. There are two options in this case, either you pick from what they offer or you take $$$ for the allowed amount and pick out your own. The only problem we have run into with the heating and cooling is that the AHS will sometimes only want to replace one part so we have run into paying an extra $700 to fix the unit inside. Even still, we came out paying less than if we didn't have AHS. It's a chance you take, but we feel like we have benefited more from having it than not.
Good luck!
J.
J..yoursmh.com
IC - Steel My Heart

Our home is 30 years old and we have always had the home warranty. It has saved us thousands of dollars in the 6 years that we have lived here.

Just last week, my fridge went out and it only cost me $55.00 which the parts and labor would have probably cost me well over $300.00 had, I not had the warranty.

I would definitely consider it.

As always, there are restrictions. You need to ask questions concerning pre-existing conditions, do you need to have an inspection done, will there be a pro-ration for older mechanicals in the house, what is the name of the company...some have a much better reputation for actually paying for services and willingness to use local, known repair services. Our preference, as a real estate company involved with these on a regular basis, is Old Republic. Is it a good idea? Certainly, if you end up with a good company.

I have friends that swear by these warranties. I persoanlly have not purchased a home warranty but if I buy my next home I will check into it. My friends bought pre-owned homes that the homeowners had these warranties on and several have used the warranty for items such as appliances in their kitchen and air conditioning. Might be worth investigating especially with the way economy is now.

I htink it is a good idea if you know you are at a 'ripe' time. My parents have used theirs twice since they moved into their house almost a year ago. Once for the microwave and the other for hot water heater. The only draw is she had to wait for the insurance company to process it their way. Anyway, it is good if you know it is about your time.

When we bought our house it came with a warranty for 1 year and in that year they fixed a slab leak which was 3k and replaced our oven and stove which was 800 so after that 1st year we purchased the warranty for about 500$ for a year. We will never ever go without it. At the beginning of summer our AC went out and we had to replace the unit outside and they covered that it was 2k. They rock I highly suggest a home warranty. We use Old Republic you can find them at www.orhp.com good luck!

We LOVE having a home warranty. We have them on our rental properties as well. Our houses are all fairly old and the warranties have come in handy several times. We have gotten a new washing machine and dishwasher, and lots of plumbing work, etc. I am sure that overall, unless something major goes out, the warranty company is obviously the ones who will come out on top. We still love the convenience of just making a phone call and knowing that the issue will be taken care of for $55.

Well, where do I start!! My hubby and I are not fans of either of the home warranty plans we have had that were included as part of the purchase of our homes. We did not renew either one of them. Both were with American Homeshield. For one, they never really fixed anyting, all they would do was patch it to keep it running. At my former house, a 50 year old house with a 20 year old AC, they kept patching the AC together every time it broke. So when it broke, we would have to pay the $50 service charage every time they would come out and all they would do was replace one or two parts. 3-6 months later the same thing would happen. I think we called them out at least 4-5 times on the issue. When the warranty was finally up, we called out someone of our choice to do the work, they came out once, did a $100 fix and it worked for the rest of the 4 years we were in the house with no problems. Another biggie is that you don't get to pick who comes to do the work. They have people they contract with. There were several times that the people who came out to work on the issues we had were not people that I was comfortable around and I never really felt like they were giving us the whole story about what was wrong with things - the AC thing is a prime example. At our new house, we had a plumbing issue that the way the warrenty read, should have been covered. Well, they decided they didn't cover it because it was outside the footprint of the foundation of our house, even though it was directly attached to the foundation and front of the house. We had to spend $1500 of our own money to fix it. We also had a couple of electical issues that we delt with and really didn't like the company they sent out to do the work. I would say don't do it. Set money aside every month in your savings account to do home fixes and earn interest on it. That way you can get the people you want in your home to do things the right way!

There are usually so many "loopholes" in those contracts that they don't end up covering much. I lived in a 40 year old house and I got a new dishwasher out of it that was worth about as much as the home warranty cost. Plus, I did not get to pick out my dishwasher, just had to take whatever they offerred. The A/C also broke and they would only cover parts, whereas I decided that it was really time to get a new furnace/AC (so as not to have to periodically live in a house without heat or AC each time it broke), so I ended up paying for that myself. After that, I decided to drop the home warranty.

We have built 2 homes and not bought an existing home so I have not dealt with home warranties. I've only dealt with builder warranties.

I am skeptical of home warranties due to our experience with 2 builders and how they work.

I do know with builder warranty (our builders) that if something breaks, you have to take what they give you to replace, etc. They don't do anything that would upgrade. Example: we built this house in 2000. By 2004, the AC systems were not working properly. Instead of upgrading the shoddy AC's they installed when we built, they wanted to install the exact same system which was broken because it was not large enough for our home. SO..we kicked the builder out and everytime we need something done, we upgrade and replace anything the builder installed.

We have spent a lot of money that way but we have upgraded with quality products that will last longer. We've replaced the entire AC system, furnace, garage doors, openers, hot water heaters, plumbing fixtures, gas leak, 2 fires, I can go on and on.....

Read the fine print carefully.....

Hi D.,
A few years ago, I used American Home Shield and was very satisfied. (We're in a new home now, and I don't have the service but will consider it in a few years.)
When we had the service, our dishwasher went out and they replaced the whole thing. A year or two later, our A/C went out. First, they came out and fixed it. Then, a week later, it went out again. That time, they replaced the whole outside unit for a bigger one that was more efficient. We were very thankful.
Each time, it was a co-pay of $55.00. I don't remember what we paid each month, but I think it was around $36.00. This was back in the late 90s and early 2000.
I would still recommend it.
Leanne

D., I have had a home warranty for many years. I was widowed at a young age (48) and knew I wouldn't be able to afford the large replacement bills on big ticket items around the house. There is a $45 fee you have to pay for each call, but that's it. I have had disposals replaced, air conditioner, hot water heater work, garage door opener work, bathroom commode replaced and haven't paid a dime other than my service call fee. However, you HAVE to use the repair companies THEY contract with. Not always the brightest crayon in the box, but usually do a good job. Only once have I had to say....DO NOT SEND THAT COMPANY BACK HERE AGAIN. All-in-all my experience has been good. Do make sure you read over everything carefully though as not all home warranty companies are created equal. Hope that helps.

I have American Homeshield and it is good to keep around if you really feel like you cannot afford to replace certain things in your house if they were to go out.

I have mine for the A/C mainly. Our AC goes out about once a summer. We call AHS every time. They come, we pay the copay of $55, they do about 10 minutes of work and its fixed...until the next summer. Ive BEGGED them to replace my AC but they said only if the compressor goes out can they fix it. Hmm? Know of any ways to break a compressor for good? Hah.

D. ...

We received a home warranty on the home we purchased a couple of years ago. Within the first month of the purchase, the heater needed repair on two different occasions. The service call is about $65 but then the rest is paid by the insurance company. I was told it would have been a costly repair so we felt we were blessed to have the insurance. All the repairs were taken care and the cost was minimal to us. The only catch is that you have to wait for their approved service provider and that can take a few days.

The cost to renew this warranty program was about $550 for us, so if you can get it for $30 a month, that seems like a good buy. I'd make sure it covers your major built-in appliances, major areas of concern ie air conditioner, heating ... and sewer if you have one.

My daughter recently purchased a home and her air went out the first month. The home warranty ins that they received as part of their purchase, as well, would have paid for the repair of a very old a.c. or they offered to replace it completely for $400. Big savings over the $3500 it would have cost them for a new unit.

If your house is that old, a warranty program may very well be a money saving investment for you. I think I'd be inclined to do it unless you have a nice savings to cover a major repair need that may arise.