Consumer Reports advises not to buy home warranties. (Scroll past the horror stories to see the general advice why.) I agree. I’ve bought four home warranties and never got half my money’s worth. The last one I bought will be the last. Here’s why I avoid home warranties.
Coming out twice, fixing nothing each time in spite of claiming to fix it–I left physical evidence the second time so I would be able to see nothing was touched–leaving a bill the second time saying we owed nothing, then changing their mind and sending a bill along with a threat of legal action was what did it for me. My realtor pulled some strings with the local account rep to get them to call off the threat of legal action, but needless to say, that did it for me with home warranties.
I’m not in the habit of paying $500 for the opportunity to waste $100 at a time.
Here’s how my experience went with the other home warranty companies who actually did fix stuff. They sent someone out to make minor repairs to a leaky spigot. Then the guy said the water pressure from the water main is too high. He offered to fix that at a cost of $900. If I didn’t pay for this additional repair, he’d do this repair just once but the warranty company wouldn’t cover any future water issues.
I’ve had two different home warranty companies pull that on me. The first one did it 12 years ago. This high water pressure has never caused me any further issues. And when I’ve had plumbers out here on my own dime, none of them ever said anything about the water pressure being too high.
On average, I’ve ended up in the hole about $400 each time I’ve bought a home warranty. So I don’t buy them anymore.
Consumer Reports recommends instead saving up for replacement. I’ll add that it makes sense to spend some of it toward preventative maintenance on your furnace and air conditioner. That will help them last longer. At the very least, get religious about changing the furnace filter. Get a good home inspection prior to purchase to ensure the roof is in good shape and everything else works that’s supposed to. Buy simple (but quality) appliances when you need to. Do all that, and there’s little need whatsoever for home warranties.
The other thing that helps is knowing a good handyman. Many construction workers will do work on the side after hours or on rainy days. Asking around at church is a good way to find these people. They’ll fix the stuff a home warranty wouldn’t cover anyway, usually for much less than you’ll pay for a specialist. For what it’s worth, either of the two guys I usually use will fix a leaky spigot for about 50 bucks.