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Question DetailsAsked on 5/12/2011

JZB
Should I buy home warranty insurance?

Almost all the Epinion reviews are extremely negative, at least regarding American Home Shield. Does anyone have experience with home warranty insurance and, if so, are there any good companies out there. The houses that would be covered are in Boston, MA area and Knoxville, TN area. Thanks!

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9 Answers

0
Votes

As with everything of this nature, I would recommend reading the warranty terms. In my experience they are a scam. The ones I've been offered - which are the only ones I've researched - have not offered much if any peace of mind. Instead they cover very specific things which are not likely to go wrong, and when and if they do go wrong the homeowner is obligated to use the contractor they provide. Then the cost of the repair is only discounted, not covered in full. I attempted to exercise my rights under a home warranty policy twice, and in each case I felt I could have had the problem fixed better, quicker and cheaper on my own.

We're looking for a new place to live now, and I am planning to turn down any home warranty that is offered to sweeten the sale. Instead I'll ask the sellers to pay closing costs. That will be something that will really help me, not some fraudulent "home warranty."

Answered 7 years ago by Commonsense

0
Votes

Personaly, I'd want home warranty insurance for a home that was beyond the contractors warranty or not transferrable. 2 yrs ago a friend purchased a 10 yr old home (nice house) = the firstt winter the heater failed; the insurance paid for repairs/replacement.

Answered 7 years ago by tessa89

0
Votes

In my opinion, most people don't need to buy home warranty except in few special situations such as when living in a really old house, or selling a house. I have explained more about this with this blog -->

Do I need home warranty

And more reviews here -->

Home warranty

-Shim

Answered 7 years ago by shortanswer

0
Votes

There was a very in-depth and well-researched article about the pros and cons of home warranties in the Angie's List newsletter a few months ago. There are a lot of misunderstandings about what these warranties cover, which in most cases is not much. As with all things, it's essential to read the coverage document and decide for yourself. When we bought our house a month ago we declined the home warranty, and we are not offering one on the house we are selling. That's because we feel they are a waste of time and money.

Answered 7 years ago by Commonsense

0
Votes

"In my experience they are a scam. "


agreed!


car and electronics warranty insurance also falls into a similar category!! the devil is in the detail - namely small print! they have so many escape clauses you may just as well not bother! better to plow the money into something else and if you are so unlucky to have something go wrong you can use it towards the replacement.

also if you buy any item and the manufacturer offers one year - they have designed the item to last or be obsolete in a year! anything more is a bonus! note how close the cost of insurance is to the new price of that same article, especially the longer the term is for cover of that item!

but then again I suppose someone out there will have stories on how much they saved by being insured. as stated 3 people 4 stories - lol


Answered 7 years ago by whirlpool

0
Votes

It may be a good deal if you aren't a do-it-yourselfer. I signed up for American Home Shield because I knew the a/c was 30 years old, and had never been replaced. In the meantime, the water heater went out. If not for the facts the it's on the 3rd floor, and I'm not a spring chicken any more, I would have done it myself. I ended up spending about the same. It was good practice for the a/c. I did a lot of homework, interviewed a lot of a/c contractors, and ended up replacing the entire system. AHS only is responsible for the worn-out compressor, not the entire system. That's the downside to this type of insurance; we think the insurance will replace everything in the system, but it may not. That may work for ceiling fans, diswashers, garbage disposers, etc., but not for big-ticket items. Because of the age, I ended up replacing the compressor, coil and heater, and didn't use the company AHS sent out for intial repair/assessment. AHS will "cash out" (refund to me) for the estimated cost of the worn-out compressor, about $1,000, so my net cost will be about $6,000.

Answered 7 years ago by Erik

0
Votes

What I've learned is that most people that buy the home warranty don't read the actual contract. They take it for granted that "everything is covered" kind of like a bumper to bumper warranty. Have you looked at the price of a new car warranty lately? Let's be realistic. The warranty cost is somewhere between $300 and $500 for the base coverage. They are in the business to fix things and only replace if it can't be fixed - which makes good business sense. If they replaced everything and only charged $300-$500 - how long do you think they would stay in business. I think these companies get a bum-wrap simple because people don't read/understand the contract.

To answer your question - make sure the company you choose has been around awhile. I had coverage with a company that had only been in business a few years ( my mistake ) and went out of business - which left me with NOTHING... Now I'm with a company that has a strong financial background and a long history in the industry and I have to say I get more back then I pay in each year. Money well spent for my family budget.



Answered 7 years ago by JWC

0
Votes

Welcome JZB !

This is the sort of question that you could pose to three different people and expect four different answers. (There's always someone like me who will answer twice and change his or her mind).

Life insurance is the sort of thing you feel like you should have but you know you'll never be the one to collect on it. Whether it is any good or not depends on:

    the reputation of the company that underwrites it;exclusions or conditions that have to be met;the paying reputation of the company involved; andwhether there are stipulations that you have to use their agents.

I know, I said life insurance and you said home warranty. My point is that they only differ in what you are trying to insure and, maybe, why.

I've used it once when I wanted to sell a house with no special attraction. A good, but not great neighborhood. An average home and no special feature(s) that scream BUY ME. The home was old enough for a buyer to be hesitant about things going kaput but not so old that things were sure to go kaput in the first two years.

A warranty became a sales feature that gave the buyer something to shield themselves against loss too soon after the purchase and let me move the house sooner than it might have gone alone.

I took a company with a good reputation. I took a company on the high side of average cost. I took a company that required the use of the fewest of its own contractors. And, I took a company with a clean record with the state's insurance commissioner.

If you are thinking of a policy to protect yourself, I'd go with an investment of the premium and bet I wouldn't need it unless there are specific areas of the house(s) you are concerned about. If you are using it as a "feature" to help sell the house(s), ask the realtors involved what they suggest and which companies to be wary of. You are looking at two pretty different communities - - could be that there is value in one but not the other.

Have you looked through Angie's List for insurance companies that provide that sort of policy? Have you looked for the specific company you mentioned to see their AL performance?

If you are having trouble finding that specific sort of insurance via the list, call the Angie's List staff and see if they can give you a hand finding a company and searching for reputation-like characteristics.

So, what the heck was my answer? I might buy it depending on the circumstances. I wouldn't shop on price alone and I would certainly run any company past the state agency that regulates insurance sales for the state and my realtor.

Good luck!

Answered 7 years ago by Old Grouch

0
Votes

We've bought only pre-owned houses and something always goes out within a couple of days--usually something you can replace like the disposal. Finding a good repair company with an experience repair person willing to work with you has always worked for us.

Answered 7 years ago by keikosmom




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