Home Warranty

[nobody really]

Any body have any experience with home warranties? I got an email from one, American Home Sheild Corporation. Seems like a good idea, covers heat pumps/electrical/appliances. Anything I should look for or avoid? I need something like this....

 

[pixiegirl]

I got one for free each time I bought a house. The one time I needed it it was more of a PITA than it was worth. Our washer keeled and it was one of the things covered in my warranty. The company needed to come out and see/try to service it, something. They rescheduled like 3 or 4 times on the day of, which is a HUGE PITA when you've taken off work to accomodate their schedule. It was enough of a PITA that I ended up just getting a new washer.

 

[ProfMoneyWise]

A warranty is basically an insurance policy. They are not offering this in hopes of having to pay off and like Pixie indicates they will do everything they can to make the claims process difficult.

Not sure how much they want or the coverage details but the deck is stacked in their favor which is understandable.

I recommend a Fully Funded Emergency Fund of 3 to 6 months of living expenses for one. Two, you seem to think you are going to need to replace some items. If you know it will be an expense in the future start planning for it now by saving up and using cash to take care of these things if they break, fail, or otherwise wear out.

The difficulty comes in having to cut from one part of your budget to pay for these things but it is worth it when the times comes and you have the money to take care of the problem.

Also, instead of needing something to cover things you know could break (and will wear out) how about putting the money you would pay for a warranty aside in a separate account and fund it monthly? You will end up being self-insured this way and not depending upon a warranty and their schedule instead of yours when the time comes.

Insurance and warranties are there to transfer risk of the big items. Funny thing is the big items (home, car, health) we pay on but hope to never have to use it. It is also the biggest risk we should need to cover. Transferring the risk of the refrigerator and paying for that service is something that can be negated by having the cash and self insuring as discussed.

 

[belvak]

When we bought our house, it came with a home warranty. The house was in really good condition, but had some years on it. Within the first week, the home warranty paid for a new hot water heater (died on the 2nd day we were in the house). And, within the first two years, it paid for a new AC/compressor/outdoor unit, and a new oil furnace. They really didn't want to replace the furnace, but Besche condemned it when it died and they came out. Also, it was too old to get replacement parts. It worked for us! Doesn't cost that much, so we are keeping it up, but may drop it once everything is new again!!

 

[CalvertNewbie]

When we bought our house, it came with a home warranty. The house was in really good condition, but had some years on it. Within the first week, the home warranty paid for a new hot water heater (died on the 2nd day we were in the house). And, within the first two years, it paid for a new AC/compressor/outdoor unit, and a new oil furnace. They really didn't want to replace the furnace, but Besche condemned it when it died and they came out. Also, it was too old to get replacement parts. It worked for us! Doesn't cost that much, so we are keeping it up, but may drop it once everything is new again!!

We've had HMS for 2 yrs. The previous owners paid the first year and we've renewed it the policy. We've certainly gotten our money's worth. Our house is very well built, 13 years old, but our appliances started going one after the other which would have been quite an out of pocket expense. Even the stinkin ceiling fan bit the dust right after we moved here, lol. Then there were our water heater and hvac unit issues. Most of our claims were handled through an automated system, never even had to talk to anyone there - easy! Is HMS always easy to deal with? No, but financially it is worth the hassle for me.

It would be great if we had that 3-6 month emergency fund in the bank but we just don't at this time. The economy has hit us hard so having the insurance in order to avoid unexpected expenses is the better option for us right now. Of course like any other insurance policy, you may pay for something that you never need. For me, piece of mind is important.

 

[dustin]

If you can get a home warranty for free when you buy a house. Then great! If not, then put aside an appropriate amount of money. Remember businesses exist to make money, so if it sounds too good to be true it probably is.

 

[ProfMoneyWise]

There is present and there is future. In the present a case is made for having this policy for peace of mind and also acknowledging that one may be paying for something that is never used. I can see that point of view.

The point of view I promote is the one where you self-insure. Instead of paying to someone else for something you hope you never need you become your own insurance company. You pay yourself (i.e. put the money away) for something you hope you never need. If you need it, you have the money to do it and you don't have to ask anyone. If you don't need it the money is still yours not someone elses.

It may take sacrificing some things today to get to this point tomorrow but talk about peace of mind, this is definitely a nice part of it.

 

[ProfMoneyWise]

I have a free widget out in the world and today's entry is topical to this post. It is as follows:


"Be financially prepared to lose your job tomorrow. You hope it never happens, but if it does you must be ready.

You will be accused of being a worrier. However, if always being prepared for a job loss, a furnace failure, a transmission breakdown, an unexpected trip due to a family emergency, (insert your emergency here), then I guess we are just that, worriers.

At least we're prepared worriers."

 

[hooknline]

save your money. they are a well concealed white collar rip off scam. I purchased one when I bought my house and washer and well pump went bad several months later, I called them and requested service. I was told I had to use there service company. The service company had a 3 week wait list. I then requested they just pay for water pump as my father is a long time appliance tech. was told no. I ended up eating repair cost myself and fixing myself. Lucky Dad got those parts wholesale.

story number 2: I was on a service call years ago working on a long time customers 1970s heatpump which died of natural causes (and one final shock from the defibulator) The Customer had a home warranty and called them for replacement. They were told I had to call them on a seperate number which I did. It took several attempts to get a pulse from the service number and when they answered, I was placed on hold for more then 20 minutes. I usually would never waited that long although I like the Customer and his wife so i waited. They finally picked up line and I explained the heatpump compressor bad burnout along with other fried crispy smelly cool gadgets and stuff. I laid out repair pricing in detail for the company and was instructed their company could do it much cheaper (per itomized repair) so being the awnry service tech I pretty much told them to get their company out here and place the smelly parts in a warm smelly place (trying to be civil here). I handed phone to customer who took over conversation with them and they were told their company could not get out there for a month (summer). The customer and his wife were both FBI agents and they had a check in my hand for replacement down payment a few days later. Its amazing how a nice shining badge can change a conversation when you know your being scammed.