Are home warranties really worth the investment?
The fine print in most policies exclude lots of things like appliances that are old or manufactured before a certain date. The realtors get some kind of selling bonus for cramming as many of these policies down the throats of buyers and sellers from these companies.
Then, if you do have a problem, the company contracts out the work to a local provider that you don’t get to pick. If you are in a fairly populated areas, they are trucking in from a few towns away and are basically there to remedy your problem using the cheapest parts and replacements as possible, AND to find a handful of other things that must be fixed in order to “comply with code or union rules” but are not covered by the policy.
So you typically pay a deductable of $100, don’t get to pick your provider, cannot opt to remedy the problem yourself and get reimbursed for parts, and get soaked for a few hundred dollars of not-covered extras.
In our first home (in Michigan) the policy’s fine print excluded virtually everything in the house. It was built in 1970. Both seller and our realtors recommended the policy.
In our new home in Illinois, a policy we didn’t want was shoved down our throats by the seller’s realtor. From HOA. Our hot water tank failed on a Wednesday. I checked the fine print and it was covered! Yeah! Called HOA, and the troubles really began. By the time I kicked their scam artists out of my house, it was Friday afternoon. They were trying to sell me new plumbing for all of the neighborning pipes that had green residue on them saying they were leaking. (That green residue is from the original plumber who didn’t fully clean up the flux, and is NOT a problem.)
On older homes I would recommend it. Especially policies that cover appliances. My husband and I bought a 20 yr old house and within the first yr we replaced the garbage disposal and the thermostat on our A/C. We didn’t have to pay for those repairs or parts. I would roll up the cost of the policy into the mortgage price if you are buying a house.
I woudl also recommend the policy if you are not handy at fixign things or don’t have the time…spend the money to alleviate the stress factor when something goes wrong.