Home Warranty for a Rental?

[Brian Braunhuber]

Hi everyone, I have been trying to find ways to lower the CapEx on my rental. Is the Home Warranty a good idea for a rental? I have heard that the home warranty company do not pay out enough money to repair the issues when they arise. Has anyone had expericance with using one of these products and had to deal with a claim?

Thank you in advance for any help. 

[Jeff Bridges]

I tried to use warranty companies and trying to make a claim was painful and I never did get service and had to cancel and get refunded my premium (and doing a chargeback due to a lack of timely response). Those that do respond will try to find a loophole to decline your  claim like not doing adequate annual maintenance on your HVAC. They rely on third party contractors to fulfill the service call and established and reputable contractors never want to be part of the warranty company's network because the companies balk at paying for basic repairs for claim and don't pay the contractor promptly for work that they approve. Right now I have my HVAC on a service plan with my local energy company (BGE) for $252/year with no deductible for the service call and covers all parts/labor but will not cover the replacement of the entire unit like normal warranty. They have their own network of technicians and don't rely on third party workers so they can be prompt and fix the issue quickly. the whole house option is $588 to cover remaining appliances. it has no minimum maintenance requirements like regular warranties try to use to disallow a claim. I would check to see what service plan options exist with your electric/gas company and see if the cost is worth it. its worth 252/yr for my older HVAC units but 588 for the entire house gets a little pricey since you can replace an appliance per year with that money that would otherwise be spent on a service plan and it begins to favor the service plan company. I only cover equipment that is towards end of life and has greater chance to fail, otherwise if I buy brand new appliance, manufacturer provides a 1 year warranty and most credit cards doubles coverage for a 2nd year. I don't buy warranties for brand new HVAC.