I know THAT is a loaded question...my mortgage lender( countrywide) just sent us an offer for a home warranty , $ 24 /month or 37/month to include heat/ac unit and it just got me thinking ...do any of these companies have a better reputation than others? Are there any I should just plain stay away from? ( we are considering another home for the in-laws wherein a warranty will be part of the deal). Thanks!
They all have equally bad reputations.
I've never heard of a home warranty that was worth the money. My opinion is that they're mostly useless.
Open a savings account and put $37 in every month. You'll come out ahead.
On Sat, 26 Jul 2008 11:57:58 +0000 (UTC), "SteveB" wrote Re Re: "best" home warranty company?:
Ditto on that.
I agree. The only one that might be a good thing is one that someone else paid for, like one paid for by a seller in an attempt to make the house more attractive to a buyer. But other than that, I've heard far too many complaints about all warranty programs of this type to ever consider one myself.
Another factor to consider, if you just effectively self insure it, when something goes, you have complete fexibility in what you do, how much you spend, etc. Say you're old conventional furnace has a major problem. By having the money you would have spent on a warranty program, you can use that towards either a repair or maybe switching to an entirely different system, like a heat pump, etc.
I once bought a home that came with a home warranty. The warranty included repair of plumbing in the house, but didn't pay to repair the wall if they had to open it up. Useless.
Bill
You also have to take into account the 'service call fee' which I think in my case was $50 per call. I can probably fix 99% of all problems for less than the service fee. I did have a sewer pump go out, but the pump was specifically excluded. Cost me about $200 in parts I did the labor. My real estate agent paid for a policy but of course I did not renew despite repeated letters about how my house was going to fall to pieces...
Also if you do have a breakdown of a major item and it needs to be replaced, then you will be stuck with what they want to install which will be
Consider this, about 50% of the money you pay goes directly to the insurance company and sales staff. None of that every goes back to paying the cost of repairs. So you can expect, on average, to pay at least twice as much with insurance than you would pay without insurance.
As others have mentioned , the warranty is almost useless. Also most of the real estate agents get a fee from the warranty companies for the ones they help sell. That is why the agent will push for a warranty.
The one I read over about 4 years ago when I bought a house seemed to be almost useless. The same with a a car warrenty, if they were not making money out of them , they would not be offered.
I would recommend a good home inspection. Then factor in the age of things in the house such as a well pump, roof, heating/cooling system.
I knew the house I bought was about 20 years old, needed a roof soon (it had been replaced a few years before) would probably need a new heat pump (which it did 2 years later) and a few other things. I made an offer based on that. I did have to put in a new heatpump after 2 years. It let me go with a much higher efficency one of my choosing. It would have been out of the warrenty time anyway.
In my line of work (heating and air) I deal with home warranty companies daily. I'd run from them as fast as I could. All of them are equally worthless as they will ALWAYS do what is in their best interests, not he consumers.
By now you should know that pretty much everyone here thinks these warranties are useless, and I concur totally. The one that came with our house had so many exclusions PLUS a nice little $90 service fee for each estimate that it was completely impossible to use. An utter waste of the seller's (and therefore our) money: do as others have said and set aside $$ every month to build up the emergency repair/replacement fund.
The manufacturer usually gives the warranty when the product is purchased. It is included with the product. I got a 1 year warranty on my house when I bought it from the builder. A few items like foundation had a 5-year warranty. The best insurance to help with unexpected repairs is to set aside $5K in a money market account which will pay you 4-5% interest. If you can't do that rent an apartment and save up.
I'd like to know which money market fund pays 4-5 percent?
Vanguard Prime Money Market, ticker VMMXX, min $3K investment. Very good low-risk fund, low expenses, trusted company. I havn't found a better one (yet).
Current yield for that fund is 2.2%
You could also look at GE Interest Plus.
Joe J
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