I’m closing on a home shortly and am considering whether a warranty is worth it or as I’ve heard mixed experiences. I understand that it’s one of those things where the people who have home issues vs. those with zero will have very different things to report. It’s an additional expense I’d initially consider avoiding, as inspection was nothing major and appliances are fairly recent, but I’d also like to hear your experiences or companies to avoid.
I understand it’s $500ish for a year in most cases, and has a service call fee.
I’ve never had a Home Warranty, but I’ve heard mostly bad things. I’d suggest figuring out how to fix things yourself. There may well be some things you’ll need to call a pro for, but much can be done yourself. There’s a YouTube video for virtually everything.
We had one that was included with a house we bought some eons ago. As I recall, there was a $100 deductible for anything and everything. And I seem to recall that whatever we called about wasn’t even covered, so we never bothered renewing it and we’ve never had one since.
The only service contract we’ve maintained has been for our HVAC - it gets us annual inspections and cut rates on parts and service calls - to us, that’s been worth it. But I’m pretty sure we’ve come out ahead by just replacing appliances when they failed - it’s not like it’s a monthly occurrence.
All the stuff I know about I’m comfortable fixing myself, except the minor chimney issues I’ll gladly pay someone to climb up there. I’m more thinking the unpredictable issues that might arise.
It might be worth it if you get the sellers to pay for it. I don’t think you should get it yourself. If something breaks, you want it done right. The warranty people don’t necessarily have the incentive to do a good job or spend a lot of money. I would expect they’d try to patch it up as cheaply as possible.
It sounds like you’re reasonably comfortable working on the house, so I would expect you could handle most issues that come up. For anything complicated, I wouldn’t trust the warranty people anyway.
It is occasionally worth it, but the repair you get is often not what you expect or hope it will be. They will often the least they can do to get it working again and use companies that don’t have the best reputation. There are a few cases where it may be worth it, though I forgot the condition, but perhaps lots of old but high end appliances which are covered. However it does state don’t expect anything but the most basic repairs.
My home warranty was a lifesaver right after I bought my house. It was a few months after I moved in when my HVAC shat the bed. It was like 99-degrees that day. I called the warranty company and they sent a guy over the next day. I ended up paying just $75 for a fix that would have normally cost $2000 (according to the guy). Since my emergency savings were super low at that time , I let out a sigh of relief.
But I didn’t renew my warranty and I have no regrets. I would be out of $1600 if I had kept paying for it since I haven’t had to make any fixes/repairs.
I had an excellent experience with mine years ago. I really don’t have any financial interest in them so I hope it’s okay to mention the name…First American Home Warranty. Real estate agent recommended them. But it ended weird. Read on.
IIRC the first thing that went was the furnace. Next came the water heater. Finally it was the AC about three times. On the first two they came out and replaced them. I was out $500 each time because they have to bring things up to code. Still not bad. The AC—they really didn’t want to replace. They actually bought me a couple window units. Ultimately though it died.
Their deal was that if you don’t contact them, you auto renew for the next year. I didn’t mind letting it auto renew, let them recoup some of what they must have lost on my acct. I was having an issue with something or other and called them. They said I didn’t have an account because I hadn’t renewed. Um, what?
Maybe that was their way of pushing me out. Funny thing is, they’d covered me…I didn’t pick up other coverages, like the garage door opener etc. Seemed like they were in the clear.
I also maintained contact with the real estate agent. She had so much clout with them because she always recommended them, sold lots of customers on policies…if not maybe I wouldn’t have gotten the good service I did.
My experience is that the 1 year Home Warranty was always paid for by the seller, and it was a condition of the sale. At a couple hundred dollars, the cost is relatively minor in a home sale.
However, in my experience, whenever I have had something requiring attention, I have called and they have sent the shadiest low end service people out. And, surprise, whatever it was wasn’t covered by the Home Warranty (well, yes the warranty does cover the furnace, but not THAT, etc.). So, I certainly don’t mind having the 1st year, because it’s paid by the seller, but I haven’t found it to be totally on the up-and-up and don’t renew on my own.
We requested a one year home warranty from the seller when we bought our house. Just peace of mind, though we never had to use it.
I purchased an appliance home warranty when our washing machine’s digital display went wonky. I called Sears, since that’s where I bought it, and she explained their home warranty program if I was interested. Well, it’s a month-to-month policy at about $40/mo and $75 deductible for each service call. I signed up and the electronic module on the washer was listed at $500, which immediately paid for the insurance for the first year (not to mention the labor). I also had them come fix the temperature problem on my oven. Included in the policy was two heating/cooling checks per year for free.
So I thought it was a good deal for the time I had it. I’ve since cancelled it, because it stopped being cost-effective to carry it with no foreseeable problems. I can always sign up again if something craps out.
I got one with a rental property I bought. It just came with it. Ok. So I called when the tenant had a toilet stoppage. They sent a guy with a hand snake basically. Never bothered with them again.
I would say the home warranty is marginally useful when the seller includes it in with the sale of an older house that has older stuff in it. It can tide you over if something blows up in that first year when you’ve spent all your savings on the house and furnishings. But I would never renew a HW. Instead I establish contracts with reputable service companies who give better warranties, discounts, and inspections.
I found that the warranty itself excludes a ton of things that you might not expect, and the service companies are off-brand companies that provide hourly labor for free, but charge shady shit like $75 “visit fees”. There are always multiple visits for the repair because they never have the right part on the truck, and “sorry we must make extra visit because Sergey misdiagnose problem and order wrong part, he no longer with us.”
I felt like I was getting ripped off, but it’s still better than replacing the entire whatever when I didn’t have cash on hand.
If you have a modern kitchen, forced air HVAC, and/or a pool it is worth it.
Yes, they are a PITA with long hold times, you have to use the vendors they send…but for $25-75 service charge they do a good job, that would cost usually at least $300.
The kicker is the long hold times.
ETA: within the last 12 months: dishwasher circuit board, pinhole leak in hot water pipe in walls, HVAC start capacitor.
Thanks for the input all, I have a few things to consider. House is older but electrical and everything like that has been updated, HVAC and such is just a few years old. I didn’t see anything about seller paying but I’ll inquire tomorrow. Unfortunately I live in a strong market so buyers are in heavy competition.
What a couple others have said: I had 1-year coverage tossed in when I’ve bought a new home, across several new homes. Twice I’ve gotten a free furnace out of it. So it’s worth it to have the policy for 1 year if you buy a place and aren’t sure if an appliance is going to go belly-up right away. I’ve never renewed after that first year and never regretted it.
I looked into home warranties at the time of our recent house purchase. Every single company had a slew of negative reviews and complaints by people who reported sluggish responses to claims, poor/defective repairs and firms using contract technicalities to dodge responsibility for doing work. Not one had even a modestly good online rating. Consumer Reports basically warns home buyers against contracting with these companies.
Just like any insurance company, the home warranty provider is a business entity that turns a profit. This means you are statistically likely to lose money by paying for a home warranty policy instead of paying out of pocket for repairs on an as-needed basis. If you’re DIY-proficient, then a home warranty has even less value for you: you can handle things like leaky sinks by yourself for free.
Insurance is useful in situations where you can easily afford the cost of something, e.g. your house burning down or your nice new car being destroyed. But if your finances can handle the cost of various piddling home repairs (or you can DIY them), then you’re likely to come out ahead if you skip paying for a home warranty.
This can certainly be true if you are not diligent. Insurance companies and other subscription services bet that you’ll either be too lazy or too complacent to cancel the policy/service, even after it is no longer of use to you. It’s how cable companies and others make money.
As far as my appliance warranty went, Sears covered any major appliance in the house, whether or not it was purchased from them. If they can’t fix it, they replace it. As I mentioned above, after two years it was no longer cost-effective, and they had decided to raise the monthly premium. When I called to cancel, they immediately offered to reduce the premium, but it was still not a smart choice. But between getting the washer and the stove fixed, and the twice-annual heating/cooling checkups, I came out ahead.
my 2¢ worth … if the house is a new build and you are the first occupants … most may be covered by warranties the builder or vendor proffers (check with builder to verify). if the house is 5+ years old … you should consider home-warranty … for at least the first year. i’d suggest purchase of the house should be contingent upon seller paying for the first 1-2 years … premium package instead of basic package. reason i say this … you don’t know what issues the house has … and, if you rely on home inspector to catch problems … you’ve been huffing too much from that can of spray-paint.