Home Warranties Are they worth it?

Question

I have seen ads for home warranties and of course the company tells me how great they are for rental property.  Here is what I have been offered:

Do they really give what they promise? Are they really worth it or are they too good to be true?   It would be this price for each of our 12 units.....so the cost would be about $6000 per year.  However, our units are old and there are lots of issues that come up every now and then the various systems.

What are you opinions on home warranty systems??  For or against?  Worth it or not?  Thanks.

Discounted Rate As Per My Supervisor!= $495.00 for 1 year (Normally the price is $660.00) + 1 Free Month! = For Total Plan

(The Discount Expires 09/22/22 @ 7:00 PM EST)

Total Plan Includes:

• Air Conditioning System
• Heating System
• Plumbing System
• Plumbing Stoppage
• Electrical System
• Water Heater
• Ductwork
• Clothes Washer
• Clothes Dryer
• Refrigerator
• Oven / Range / Stove
• Cooktop
• Built-In Microwave
• Dishwasher
• Garbage Disposal
• Ceiling & Exhaust Fans
• Garage Door Openers
• Whirlpool Bathtub.

Great Reputable Review Sites to check Out:

Reviews

https://top10besthomewarrantyplans.com/?gclid=EAIaIQobChMIiuT8x62s8QIVFODICh2XvQV1EAAYAiAAEgKM2PD_BwE

https://www.usnews.com/360-reviews/home-warranty/choice

https://www.choicehomewarranty.com/home-warranty-reviews/

https://www.consumeraffairs.com/homeowners/choice_home_warranty.html

https://www.trustpilot.com/review/www.choicehomewarranty.com

Ben Zimmerman · Answer

A truism:  Businesses exist to make money.

This warranty company is making money, which by default means that the owners of these policies are paying in more money than they are getting out in repairs.  Don't think even for a second that they will just replace your HVAC unit just because its old and stopped working and they are going to suddenly buy you a 6k new HVAC unit just because you bought an insurance policy for $495.  They will nickel and dime you to death putting a bandaid over a gunshot wound, anything to avoid buying a new unit, and each time they send a repairman to put on a fresh bandaid you must pay another deposit fee.

They are also super slow to respond to anything, when an appliance breaks you don't have time to wait a week for them to send a technician to the home to verify that it's broke, then the technician goes home and 3 days later he submits his bid to the warranty company, then 3 days later the warranty company tells the technician the bid is no good and he needs to find a cheaper way to fix it.  Another 3 days pass and the technician submits another bid which gets approved.  Unfortunately by this time the technician is on vacation and can't do any work for a week.  Then it takes 2 weeks for parts to be ordered and the next thing you know it's been a month or two with the tenant not having an HVAC unit and the tenant is threatening lawsuits for uninhabitable housing.  Then when the repair man does come to fix the HVAC unit he tells you Freon isn't covered by your warranty company and therefor bills you directly for $400, along with your $99 deductible just for having a repair man come to your house.

Nathan Gesner · Answer

It's just like insurance: the house always wins.

They will be slow to respond, they charge a trip fee, and they use low-quality vendors to handle the work.

You'll hear some success stories, but you are far more likely to hear people disappointed by the service.

Ned J. · Answer

Rip off in majority of cases. The insurance company drags their feet, hired crap contractors that do crap work and often band aid the issue so its continues to be an issue over and over.

Yes every now and then you might hit a home run and it paying out well, but most of the time you are better off paying for the repair yourself.

Malkia Ra · Answer

This.

Short answer, no, home warranties are not worth it.

Julie Hartman · Answer

We had too many negative experiences and won't go anywhere near them now. Not only do they cover a limited amount on major reapirs, but as a landlord (depending on your state habitability laws) you may be required to do the fastest repair, not the cheapest. Judges don't care that you are saving money by having a warranty; they want the repair to be made quickly for the sake of the tenant. And warranty companies often contract with the bottom tier of repair companies. Not worth the aggravation.

Mike Smith · Answer

NO they are a terrible deal.  Any insurance company can quote you a percentage of revenue that is paid out in claims.  In the medical insurance in the US, a minimum of 80% of revenue must be paid out in claims by law.

Home warranties typically pay out less than 20% of total revenue in claims.  The remaining 80% goes to marketing, salesperson commissions, company profit and overhead.  I even had a salesperson tell me "It's actually not really insurance, it's a sales tool to sell more homes".

If you expect to get more than 0.20 for every dollar paid into the insurance, you are a fool.

Charles Carillo · Answer

@Sandy Keller

Each time I speak to an investor that has purchased a home warranty; they complain about it. If a tenant's air conditioning goes out in July, are you going to wait to file a claim, get it approved and then fix it? I doubt your tenants will be willing to wait more than 24-48 hours. Maybe you need to repair it and then submit receipts and wait months to get paid. Choice charges a $85 service fee that you need to pay to the tech when they arrive (not matter how large or small the repair is). Most plumbing stoppages can be cleared by a handyman for less than $85. I would also read the fine print and see what is actually covered, what is not and what requires an additional service fee. Many of the items are limited to $500.

https://www.choicehomewarranty...

Bruce Woodruff · Answer

Never heard of one that actually paid off. Never. Just my .02. Same with car warranties.....

Carlos Ptriawan · Answer

never again, same like car warranty,etc....it's creating stress when talking to them.

Drew Sygit · Answer

@Sandy Keller they are better suited for owner-occupant housing where the owner experiences the CHALLENGE of dealing with them.

Too much work for a PMC to deal with, yet owner not understanding.

Home Warranties Are they worth it?

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