Home Warranty: Looking for Thoughts

[Farnsworth]

CF'ers have given decent advice (some have not) about other home/yard related topics in the past, so I'm wondering everyone's thoughts on Home Warranties.

We purchased our first home in Ankeny last summer and we included a Home Warranty policy at that time. The time has come around to either renew the policy for another year, look into other Home Warranty companies or policy options, or ditch it completely.

Our situation:
Home built in 2004 (South Ankeny, Suburbia area).
AC/Furnace/Water Heater original to house
Kitchen Appliances are only 3-4 years old
Washer and Dryer are under a year old.

Covered Items on current policy: Heating, Washer, Dryer, AC, Light Fixtures, Dishwasher, Ceiling Fans, Fridge, Electrical, Garbage Disposal, Plumbing stoppages, Doorbell, Humidifier, Range, Oven, Garage Door, Water Heater, Plumbing, Built-In-Exhaust.

Service Call Fees are $75. Not sure on deductible information is something big should fail.
They are wanting to charge $719 for the year.

Typically I am not one to like extended insurance coverage as I see it as a waste of money. We just refinanced a car loan and I had to convince the wife and lender that we didn't want to waste money on Gap insurance.

Just looking for general thoughts on this topic.

 

[Farnsworth]

And yes I realize I am poor and stupid for not spending straight cash money on a house and vehicle.

 

[1100011CS]

I don't have any advice, just want to say I wish I had one for this ******* piece of **** house.

 

[Clark]

It's probably not worth it. If I were you I'd just park some money somewhere for a home repair fund.

 

[Farnsworth]

It's probably not worth it. If I were you I'd just park some money somewhere for a home repair fund.

This has always been my thought in general when it comes to insurance, these types in particular. I feel like it's just hedging a bet on something going wrong.

 

[CtownCyclone]

A/C is 13 years old...have you had it regularly serviced since you've had the house? I guess that'd probably be just one service (maybe 2). Have they discovered any leaks or anything like that?

 

[DSMCy]

Farnsworth - I'm in nearly the exact same situation.
We purchased a house in WDM last April and sellers included a year home warranty. My home is a little older, built in 1998.

I decided to let the warranty contract lapse. I called before it expired and asked what would happen if I wanted to make a claim in the future. They told me I could restart the policy anytime, I would just have to backpay all past premiums.

If something like my HVAC goes out this summer/fall, it worth it to me to backpay $350 + $75 deducible, rather than $10K to replace it myself.

I'm stashing money and hoping I can squeeze another 3-5 years out of what I have.

 

[Clark]

This has always been my thought in general when it comes to insurance, these types in particular. I feel like it's just hedging a bet on something going wrong.

basically. It's not really a huge amount of money, so if someone is the nervous nelly type maybe it would be worth it for them to have the security, even though it would cost more in the long run.

 

[StratCY]

I ditched mine. I got burned by a home warranty company twice. Save the money and fix stuff yourself.

 

[SCyclone]

Warranties are sketchy and misleading. I'm in the business of selling building materials, and people think a warranty will protect them in almost every instance. A warranty is (most often) a promise to repair or replace something that is defective. Some folks think hail damage or hard water damage or rust are defects - they aren't. In my experience you will have a real fight on your hands trying to collect on most warranties, because they will invoke "acts of God" or "installation issue" or some such baloney.

You'd be better off banking that $719 for just such an occurrence.....and the deductibles may not make that warranty such a great deal, either.

Incidentally......when you buy a new home, or have one built, the builder's warranty is typically one year. This would cover damage or failure owing to construction techniques.

Hope this helps.

 

[CycloneErik]

i would either do it or not do it.

 

[SCNCY]

Farnsworth - I'm in nearly the exact same situation.
We purchased a house in WDM last April and sellers included a year home warranty. My home is a little older, built in 1998.

I decided to let the warranty contract lapse. I called before it expired and asked what would happen if I wanted to make a claim in the future. They told me I could restart the policy anytime, I would just have to backpay all past premiums.

If something like my HVAC goes out this summer/fall, it worth it to me to backpay $350 + $75 deducible, rather than $10K to replace it myself.

I'm stashing money and hoping I can squeeze another 3-5 years out of what I have.

I am pretty sure a warrant will not replace the HVAC. If something is wrong, they will come and fix it, but they won't replace it. My sister had something leaking from her AC in her house. All the warranty company would do is come and fill the AC until with some liquid, but they wouldn't actually fix the problem, which was the leaking.

I had my warranty company come out a couple times to do some things with my HVAC. All they did was replace the defective parts until the until began working again, but they won't replace the entire unit I don't think.

Also, the seller paid for my warranty and I did not renew it. But I also replaced the HVAC myself as it was old.

 

[Farnsworth]

A/C is 13 years old...have you had it regularly serviced since you've had the house? I guess that'd probably be just one service (maybe 2). Have they discovered any leaks or anything like that?

Everything in the house has been well taken care of. The previous owners did a massive remodel on the house just a couple years ago including redoing 3 bathrooms, new floorings, finishing the basement with an additional bathroom, and all new kitchen + appliances.

They also kept up well on the maintenance and had everything regularly serviced. The only reason they ended up moving is because they had an oopsie resulting in unexpected twins so their family grew for 3 children to 5 so they needed more space. The guy was actually over last night as we've become friends and he wanted to show me some stuff in the basement regarding switching over the seasons on some things.

 

[ArgentCy]

Nope warranties are overpriced pieces of crap that you will have a hard time collecting from anyway. But if you are one of the many Americans who have a hard time coming up with $400 then I can see why people would buy them.

 

[DSMCy]

I am pretty sure a warrant will not replace the HVAC. If something is wrong, they will come and fix it, but they won't replace it. My sister had something leaking from her AC in her house. All the warranty company would do is come and fill the AC until with some liquid, but they wouldn't actually fix the problem, which was the leaking.

I had my warranty company come out a couple times to do some things with my HVAC. All they did was replace the defective parts until the until began working again, but they won't replace the entire unit I don't think.

Also, the seller paid for my warranty and I did not renew it. But I also replaced the HVAC myself as it was old.

I'm sure all policies are different and I'd fully expect to be screwed over when/if something breaks, but I also called about repair/replace.
My policy has a $1500 aggregate repair maximum. Any repairs exceeding this are supposed to be a replacement.

 

[BillBrasky4Cy]

I've had terrible experiences with two different home warranty companies. The first was a hot water heater they didn't want to replace and the second was an overhead microwave that the company threw $600 worth of replacement parts into before having to actually replace it a few months later. The original microwave cost about $500 and they refused to replace it. I had to kick and scream so that they would finally install a new one vs throwing more parts into it.

My advice would be to take your premium and put it into a "home repair" account.

 

[Rabbuk]

And yes I realize I am poor and stupid for not spending straight cash money on a house and vehicle.

peasant

 

[NWICY]

And yes I realize I am poor and stupid for not spending straight cash money on a house and vehicle.

Well way to stop that thread derail.

On topic if you've got enough in savings, to replace the furnace your probably good. Normal water heaters aren't terribly expensive and can be a DIY replacement with a little time and patience usually.

 

[JY07]

I personally wouldn't, but if you do make sure you read the fine print on what the payout caps are.

It's probably not worth it to begin with, but it's definitely not if big ticket items are capped at relatively low reimbursement amounts, especially at $700/year.

 

[CYdTracked]

To me home warranties are only relevant if you are buying or selling a home to cover you in case of an unexpected issue within the first year. Considering most of the stuff that it covers, unless it is major repair or replacement you already are going to pay someone around $75 for a service trip to your house and unless it's HVAC or a high end and expensive appliance that $719 you are spending is going to cover most if not all of some of the appliance repair or replacement costs not to mention you may have to pay a deductible on top of that. Even then I wonder just how much one actually covers like if your furnace is shot just how much replacement costs they would cover based on the age and condition of it. I just looked at the HSA website trying find some of their terms and there is a pretty vague description on what is covered regarding HVAC systems: "If a system has not been maintained, HSA is not responsible for the repair. Improper installation and pre-existing conditions are also excluded."

Anymore if you can't fix something yourself like a dishwasher for instance that by the time you get someone out to come fix it you're already about 50% or more into a new dishwasher in repair costs if you have to pay for any parts or labor on top of the service trip call. We just have what I call a "rainy day fund" where we make sure we have a certain amount of money in our savings that would cover us if we had an unexpected major expense or emergency happen. I would guess that in the long run we'll save more money by just paying for repairs and replacement items outside of their warranty periods as they happen than to try and proactively have some kind of extended warranty coverage on certain things. For most new appliances you buy I won't do anything more than a 1 to 3 year warranty depending on what it is as if it was defective and something major was going to fail on it would likely happen sooner than later.