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Home Warranty Policy - Recommend or NOT?

Sandy VDH

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Do you recommend these kind of policies?

What has been your experience or recommendation? What company are you using?

My house is coming on 10 years and I am wondering if it might be a good idea to think about one of these policies.
 

CalGalTraveler

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I only bought such policies when selling a home to avoid liability if the furnace dies 6 months later.

Depends on whether it is more cost effective to save the premiums in a savings account to self insure or whether the premiums are less expensive than you project if the furnace fails etc. I would anticipate that the premiums on a 10 YO home are quite high. YMMV.
 

Talent312

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Let me rephrase: "Do I pay thru the nose for insurance I may never need, or
do I gamble that there'll be no major breakdowns in the next few years?"

DW had one these when I met her. It came in handy as all her appliances were
quite OLD. They kept the old stuff going, until parts were no longer available.
"Sorry, but they don't make transmissions for that washing machine anymore."

When I took over our finances 15 years ago, we ditched it. I'm glad we did.
We since replaced all the worn-out appliances with new ones - - water heater,
both AC systems, fridge, stove, dishwasher (+ roof).... no need for any service
in that time, 'cept for a pressure valve on the water heater.

So I say to self-insure for way more options.
 
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bogey21

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One advantage having one of these policies is when you need a repairman you just call the Home Warranty Company and they send one out. No need to search for a repairman. Are the policies worth the cost? Probably not unless most of your stuff is 10 years or so old....
 

Karen G

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We never had a good experience with a home warranty. Going in they make you think they'll replace appliances that fail if they're unable to fix them. But in reality it doesn't work that way. After several attempts at fixing our refrigerator (with us paying I think a $35 charge each time they came out), they determined they couldn't fix it. They offered us a few hundred dollars to go toward a new refrigerator but no where near the cost of a refrigerator. We took their offer and didn't renew the policy after it ran out.
 

Sandy VDH

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CalGalTraveler

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Can you self-insure? i.e. can you pull from an equity line or savings account to replace a major appliance or heater if it broke?

Bottom line: I don't trust insurance companies. Read the exclusions and fine print. Many policies only give you a depreciated value of the item being replaced so you still need to cough up money to replace. Consumer Reports usually advises against warranty contracts, but you should google and double-check this.

At 10 years your water heater will likely go soon. And appliances don't last as long either. Furnaces and refrigerators 20 - 25 years. You are betting against the insurance company. They have priced this risk into the premium plus their overhead and profit.
 

bnoble

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In general, it should be less expensive overall to avoid such policies, but that only works if you have a cushion on hand that can get you through short-term emergency replacement expenses.
 

b2bailey

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It sounds like I am one of the few who have had mostly success stories with this type of coverage. Over the years, water heater, appliances, plumbing, furnace -- 3 different homes/20 years.
 

chellej

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I purchased one when we bought this home....they replaced a $300 control on the jenn air stove and then couldn't repair the fridge and gave me $1100to purchase a new one ( or select one from their list of options). After the first year when I was more comfortable with the systems and appliances, I dropped it.

My dad had one the sellers bought when he bought a home and the only thing that went wrong was the water heater and they didn't cover the element going out so it was worthless.
 

Patri

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For selling homes, it gives the buyer confidence. On the house we sold, the new owners made three claims and it paid off. We were shocked since everything worked for us. But the house was 11 years old.
For a rental house I bought, the fridge conked out. The seller had flipped the house, but we could tell he likely put his own fridge in and bought a new one for himself. The warranty company came out and saw the fridge was 9 years old so the compressor was not covered. The manufacturers would have covered the unit but not the labor (which was a lot!), and that warranty would only last the rest of the 10th year. So it was wiser to buy a new fridge. That service call was $45.
On another rental house I bought, any service call would have been $100. It was a poorer plan too, since not as many appliances were covered.
I have researched companies since, and they do not seem to be a good value. Policies are worth it to sell houses, but not so much for longtime owners. The premium and service call exceed the return unless you make a claim every year.
 

AnnaS

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My sister has had one of these policies for her appliances. She has no complaints and I know she has used them a few times.
 

turkel

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I had a similar experience to Karen G.

When I was single I had the policy for years. My microwave went out several times. They came out and fixed it multiple times , when I no longer had the policy I replaced it for $300. My dishwasher couldn’t be repaired they offered $200. My oven was difficult to replace due to an odd size I believe they paid me out $1100. I also had my air conditioner replaced by the Insurance. So I feel like I got my money’s worth but they definitely only replace as a last resort and then with low cost items.

I used First American I believe.

If I was still single I would probably still have the policy despite its limitations. My DH is beyond handy so the need for a repairmen is now limited.

We did have our water heater go out this year and weren’t home to replace it ourselves. I paid $2200 which seems absurd when the cost for a high end one was around $800 At Home Depot.

If you can afford to self insure you will spend more but probably replace with better . I believe there is a place for this insurance as long as you go in knowing it’s limitations.
 

bogey21

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We did have our water heater go out this year and weren’t home to replace it ourselves. I paid $2200 which seems absurd when the cost for a high end one was around $800 At Home Depot.

Years ago I had a water heater replaced by a HOW company. They paid about half. The other half was to make sure the replacement met the new city code...

George
 

rapmarks

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I had it several years. They got worse and worse. A few day wait every time. I called for 18 month old dishwasher and they took it! They returned it two months later and it didn’t work. They said they couldn’t fix my refrigerator and told me to buy a new one. They said they would replace my disposal but the new disposal would cost $185 they replaced my water heater but the new one cost a thousand dollars. The charge went up to $430 a year. And I don’t believe they covered microwaves
 
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