Home warranties, yay or nay?

[CharlesInCharge]

Likely buying a house very soon, and it will be an older house with all older appliances. I'm debating the added costs of a "home warranty" to cover major appliances, possibly the roof, and so forth. Pricing generally ranges in the $300-500 for very basic coverage, to somewhere around $1500 for the Cadillac policies.

I generally think "extended warranties" are scams with too many clauses and too much fine print. But on my last two houses that came with used appliances, I had to replace 2 furnaces, 1 refrigerator, 1 microwave, and maybe other stuff; so in both cases a "honest" warranty would have saved me a bundle...

Any feedback, advice, experiences, etc. are appreciated as I weigh this possible expenditure. Thanks.

 

[JustN89]

My folks have had an American Home Shield warranty in the past and didn't have any issues with claims. That said, that's the only company I've had experience with.

Edit: Out of curiosity, I looked up AHS on the googles and apparently they're pretty hit or miss. That was their experience years ago, but it could be that things have changed since then.

 

[Dave Sherman]

My seller sprung for one for my house. When the breaker box failed within the first year, the covered items included "electric service panel". Great! Oh no, that's not covered if it was because of corrosion and age. Um, what?

 

[atikovi]

You have to read the terms and conditions carefully. If it costs $20,000 to replace a roof and it's already 20 years old, they may only pay 10% of that if it only had 10% of it's life left or maybe only $500 to patch it. If the water heater blows, they may have a large deductible, pay pro-rated based on it's age and require you to use their contractors which will jack up the price so much they pretty much wont pay anything. They will also have pay-out caps so for example, after they have paid out $3,000 for repairs, the contract is done.

 

[CharlesInCharge]

These are my concerns; terms like "age exclusions" or "pro-rated" etc. make these almost useless scams. I'm thinking if it's $1000, I'd just be better off putting $1000 into the principle of the house and rolling the dice on the warranties...

 

[supton]

I won’t say insurance is a scam, but they are not in the biz of losing money. I’d rather run the risk and sit on the money.

 

[CharlesInCharge]

My smart friend has shared with me that he knows of a situation where the 1-year warranty was nearly expired when the furnace stopped working. The policy had a "fix or replace" clause. The insurer sent a repairman who put a temporary fix on it, knowing it would last thru the warranty expiration period but was not a permanent fix. So that's another worry.

I have had such poor luck with extended warranty scams I'm leaning on not buying one (home appliance warranty) and just taking the risks; "self insuring" so to speak.

 

[Wolf359]

Sold many homes, never really had a buyer that bought a home warranty. But maybe they did afterwards and didn't mention it to me. Sometimes the seller would include it. From what I've heard, they just patch the problem, like if your stove or water heater breaks, they just send someone out to fix it, not just automatically buy you a new one. The warranties are hit or miss too, some bad companies out there, some good. No idea which ones are good ones because like I said, very few people ever bought them. Last couple houses I bought, I didn't even bother with a home inspection, if there was something wrong, I was just going to fix it. Already knew the average costs of major systems and relative age so whether it went in 2-5 years, didn't really matter, when it failed, I'd just replace/fix it. Had the full range of lifetimes, sometimes I bought a stove/refrigerator/dishwasher and it'd last 10+ years and sometimes it'd die a year or two after I bought it.

 

[Wolf359]

My smart friend has shared with me that he knows of a situation where the 1-year warranty was nearly expired when the furnace stopped working. The policy had a "fix or replace" clause. The insurer sent a repairman who put a temporary fix on it, knowing it would last thru the warranty expiration period but was not a permanent fix. So that's another worry.

I have had such poor luck with extended warranty scams I'm leaning on not buying one (home appliance warranty) and just taking the risks; "self insuring" so to speak.

You basically buy the warranty if a 2-5k repair is going to break you. Otherwise you just self insure.

 

[skyactiv]

Since warranty is being discussed, be careful where you buy certain things at.

A Maytag washer as an example.
The same exact washer at Lowes which cost a bunch more money vs direct from Maytag, yes, Maytag sells direct to the consumer, will have a different model number. The Lowes unit has a more limited parts warranty, one year on parts, 10 year on motor and basket-no labor if you read the fine print.

The Maytag warranty is all parts and labor for 5 years, 10 on the motor and drum.


If you really want the extended warranty, Maytags optional warranty is better and cheaper.

 

[Donald]

Likely buying a house very soon, and it will be an older house with all older appliances. I'm debating the added costs of a "home warranty" to cover major appliances, possibly the roof, and so forth. Pricing generally ranges in the $300-500 for very basic coverage, to somewhere around $1500 for the Cadillac policies.

I generally think "extended warranties" are scams with too many clauses and too much fine print. But on my last two houses that came with used appliances, I had to replace 2 furnaces, 1 refrigerator, 1 microwave, and maybe other stuff; so in both cases a "honest" warranty would have saved me a bundle...

Any feedback, advice, experiences, etc. are appreciated as I weigh this possible expenditure. Thanks.

I had a home warranty with AHS when I bought my current home. They were OK.

Better to find an independent appliance repair guy. He can advise you when something happens whether to repair or replace.

 

[ATex7239]

Anytime I’ve cheaped out on insurance with large ticket items it has came back to bit me.

Toaster or blender, nah. New to you home or used car you don’t really know anything, I’d do it.

 

[The Critic]

Sold many homes, never really had a buyer that bought a home warranty. But maybe they did afterwards and didn't mention it to me. Sometimes the seller would include it. From what I've heard, they just patch the problem, like if your stove or water heater breaks, they just send someone out to fix it, not just automatically buy you a new one. The warranties are hit or miss too, some bad companies out there, some good. No idea which ones are good ones because like I said, very few people ever bought them. Last couple houses I bought, I didn't even bother with a home inspection, if there was something wrong, I was just going to fix it. Already knew the average costs of major systems and relative age so whether it went in 2-5 years, didn't really matter, when it failed, I'd just replace/fix it. Had the full range of lifetimes, sometimes I bought a stove/refrigerator/dishwasher and it'd last 10+ years and sometimes it'd die a year or two after I bought it.

Strange - it must be a market thing. Out here, it is common for the buyer to ask for the seller to pay for 1-yr of home warranty.

 

[GMBoy]

Strange - it must be a market thing. Out here, it is common for the buyer to ask for the seller to pay for 1-yr of home warranty.

It is here where I am too. The 1st home we bought the seller gave a 1yr warranty and when we sold it we have a 1 yr warranty.

 

[Wolf359]

Strange - it must be a market thing. Out here, it is common for the buyer to ask for the seller to pay for 1-yr of home warranty.

Well we do have a saying here, a real yankee to the end. Means people are cheap out here and it's not common. I've only run into one brokerage that gave the buyer a home warranty as part of the sale, maybe that was just part of their pitch to get the listing. Basically here if you want something extra, it affects the price. And many times those warranties are worthless so you mind as well buy your own instead of taking whatever is offered. It's why asking for repairs from the seller isn't commonly done, better to get a credit and find your own people to do it.

 

[billt460]

Likely buying a house very soon, and it will be an older house with all older appliances. I'm debating the added costs of a "home warranty" to cover major appliances, possibly the roof, and so forth. Pricing generally ranges in the $300-500 for very basic coverage, to somewhere around $1500 for the Cadillac policies.

I generally think "extended warranties" are scams with too many clauses and too much fine print. But on my last two houses that came with used appliances, I had to replace 2 furnaces, 1 refrigerator, 1 microwave, and maybe other stuff; so in both cases a "honest" warranty would have saved me a bundle...

Any feedback, advice, experiences, etc. are appreciated as I weigh this possible expenditure. Thanks.

While I have never had a bought and paid for home warranty, (with the exception of new home warranties from the builder), I have mixed emotions about these things. Personally, I've had to deal with 2 water main leaks within the last 3 years. The first came while we were in the process of selling and moving out of our old house, and into to the house we're in now. I bought that home new in 1997, and sold it in 2019.

The water main ruptured halfway between the street and my home. Yeah, it was Polybutylene. $7,400.00 later it was replaced. (I know the cost was excessive, but we were in the process of moving, and the house was already on the market, and being shown). So I really didn't have the time to screw around, and had to eat it. Thankfully, the house ended up selling for $7K over asking price, so that silenced most of my complaining about it.

Then last year the main here had a leak. $450.00 later it was repaired. So now I'm not ashamed to say I'm a bit paranoid about leaky water mains. I just got a card in the mail for, "Water Main Protection from Home Serve USA". The cost is $3.47 @ month. With no claims allowed for the first month, and up to $7K in a single year after that. Sounds good so far.

However they will only accept payment by automatic electronic monthly withdrawal from your bank. Which they tell you NEVER to do. Especially with all of the identity theft going on today. Secondly, they are very vague about what's covered, and what's not. Along with how to collect, and how much they'll pay maximum per running foot, how far, etc. Also repair or replace comes into play as well. (The house is 30 years old).

Last is the fact my present homeowners policy, (The Hartford), offers no such protection. As a rider on a present policy, or in any other way, shape, or form. So I can't help but wonder about the actual validity about all of it. Sorry for the long winded post.

 

[CharlesInCharge]

Strange - it must be a market thing. Out here, it is common for the buyer to ask for the seller to pay for 1-yr of home warranty.

In a BUYERs market, yes a seller might offer such a thing to be competitive. We observed this nationally from around 2008-2012.

In a SELLERs market, such as 2020 thru current, there is no need to offer such add-ons. In fact, in such a SELLERs market, buyers are often offering greater than asking prices, waiving inspections, and other such things. Sellers are rarely offering add-ons.

 

[billt460]

In a BUYERs market, yes a seller might offer such a thing to be competitive. We observed this nationally from around 2008-2012.

In a SELLERs market, such as 2020 thru current, there is no need to offer such add-ons. In fact, in such a SELLERs market, buyers are often offering greater than asking prices, waiving inspections, and other such things. Sellers are rarely offering add-ons.

Where I'm living now, there are simply not enough homes to supply the market. Builders are selling "spec houses" for above asking price before they get the slab poured. Bidding wars erupt on most ANY desirable home, within hours of being placed on the market. Many homes here have DOUBLED in value in just 24 months.

You cannot expect sellers to make ANY type of concessions, in this type of booming sellers market. It simply will not happen.

 

[doublebase]

I have always been against any paid warranty. Warranty companies/insurance companies are not in business to lose money. They win. Keep the money and hope for the best.

But I’ll tell yeah, I’d be very careful buying an old house nowadays. Buying an older house (20 years old) has been one of the biggest mistakes I’ve made in my lifetime (to date, lol). I usually buy newer, or new houses and have something I can keep for 10-15 years without having to do little to no repairs. My “new to me” 20 year old house, just in the last year alone, has cost me $24,000 for a roof, $3,400 in chimney repair, heating system is old and inefficient (needs replacement), the two central air units are on their last legs ($20,000). The downdraft cooktop just went out this weekend, $1,800 (luckily I’m handy and took it apart and fingers crossed, waiting for a part and I think I fixed it).

And there is no one to do any of this ^^^ right now. Good luck getting anyone to even return a call, never mind show up. I can’t even get someone to clean a gutter and seal it properly. You will become a property management specialist in no time! Calling contractors and carpenters. Masons, plumbers. You’ll know more about construction than ever before! It’s wonderful (sarcasm). You’ll have strangers in your driveway every weekend, and you’ll practically beg them to stay and fix it right. And they can, and will, charge you almost whatever they want right now. I talked to a plumber the other day, he told me he is so busy that he is quoting people thousands over what he’d normally charge in hopes that they’ll turn it down. And they don’t. He’s literally making $3-4 grand per job more than he usually would because there is no one else out there doing the work. It’s crazy. A friend if mine just had a can light replaced recently, not installed, but replaced. It was $700 bucks. And it was the lowest price he could get. Hey, I’m glad tradesmen are doing well. I am. I just wish they weren’t doing THAT well off me. Lol.

 

[ATex7239]

I have always been against any paid warranty. Warranty companies/insurance companies are not in business to lose money. They win. Keep the money and hope for the best.

But I’ll tell yeah, I’d be very careful buying an old house nowadays. Buying an older house (20 years old) has been one of the biggest mistakes I’ve made in my lifetime (to date, lol). I usually buy newer, or new houses and have something I can keep for 10-15 years without having to do little to no repairs. My “new to me” 20 year old house, just in the last year alone, has cost me $24,000 for a roof, $3,400 in chimney repair, heating system is old and inefficient (needs replacement), the two central air units are on their last legs ($20,000). The downdraft cooktop just went out this weekend, $1,800 (luckily I’m handy and took it apart and fingers crossed, waiting for a part and I think I fixed it).

And there is no one to do any of this ^^^ right now. Good luck getting anyone to even return a call, never mind show up. I can’t even get someone to clean a gutter and seal it properly. You will become a property management specialist in no time! Calling contractors and carpenters. Masons, plumbers. You’ll know more about construction than ever before! It’s wonderful (sarcasm). You’ll have strangers in your driveway every weekend, and you’ll practically beg them to stay and fix it right. And they can, and will, charge you almost whatever they want right now. I talked to a plumber the other day, he told me he is so busy that he is quoting people thousands over what he’d normally charge in hopes that they’ll turn it down. And they don’t. He’s literally making $3-4 grand per job more than he usually would because there is no one else out there doing the work. It’s crazy. A friend if mine just had a can light replaced recently, not installed, but replaced. It was $700 bucks. And it was the lowest price he could get. Hey, I’m glad tradesmen are doing well. I am. I just wish they weren’t doing THAT well off me. Lol.

Ah, the joys of home ownership; isn’t it just grand...

Nah, it’s a whole bunch of grands...