Profile picture for mlbuddejr

Do we really need a home warranty?

We just closed on our first house last week.  What an experience, to say the least...

We are now getting it ready to move in and finishing up the left over paperwork and getting utilities set up etc. 

We tried to have the seller cover the home warranty but, no luck.  Now after reading a little about what a home warranty covers, we are not sure if it is worth the money.  What is typical for home owners...buy the warranty or not?  Any major drawbacks either way...?

Thanks in advance for your help.
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March 14 2012 - Countryside
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Answers (19)

A home warranty should cover more than a small handful of items in the home.  It should cover all major components of the home including the electrical system, and plumbing as well as appliances and pool or spa pumps. [Hotlink and promotion removed by Zillow moderator. Please see our Good Neighbor Policy for information.]

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July 01 2013
A home warranty is not essential, but it can be nice to have. However, you may want to check what the pricing will be for you since you already closed on your home. You may longer be eligible for the reduced rate for your first year since you didn't purchase the coverage prior to close. 

if you have brand new appliances, you also may want to pass on the home warranty, because the home warranty coverage will defer to your manufacturers' warranties.

Check out BPG. They have coverage in 30 states and they are the only company that I'm aware of that has a refund policy on their service call fee if they can't fix the problem.

All in all, home warranties can come in handy. If you have a serious problem, it can give you some decent savings. And it may be worth it just for the first year while you're getting to know your home, and then you can decide if you want to renew it especially with the rate increase in subsequent years. Just take into consideration the age of your home and the inspection report and the cost of the home warranty.

Good Luck!
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June 26 2013
Profile picture for DougWancura6
Check with your home insurance company.  Several companies now offer home warranties as an add on endorsement to your existing policy.  I know some carriers charge as little as $2.00 monthly for this coverage.
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June 26 2013
No.  But it helps for the first year till you get to know the home.
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October 29 2012
Profile picture for SteadyState
Imagine if you had purchased a home smack in the middle of Sandy's path - the insurance is there to protect you when things don't go your way,
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October 29 2012
This depends on whether you think an item that is covered by the home warranty will require repair or replacement and you prefer paying only $60 service fee to have someone come out the following day and fix or replace  the item.

The alternative can be much more costly!

Without a home warranty coverage in place you may have a difficult time locating a contractor to come out right away.  Repairman charge a lot more just for the service call plus additional fees for the cost of their labor and parts without preset $60 fixed price set by the insurer.

When the repair is costly the insurer tends to deny the claim initially until evidence (home inspection report) discloses the item in question was working at the time the home warranty coverage was put in place.

After all, insurers profit by collecting premiums not paying out claims.
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October 29 2012
Profile picture for chadb1080690
I would like to add that you should pay very close attention to their contract terms.  They say they will replace system in your house to make you feel good about the warranty, but when it comes down to it, they only cover a particular amount.  We found out the hard way with Allied Home Warranty when we had a complete AC failure and needed a system replacement.  Turns out they only covered $1500 and I was left with the 6k bill.  That was the last big thing in the house that needed replacing and they didn't help much.  We are thinking about canceling them when the contract is up.
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October 29 2012
@Debbie Cox

I know that's a typo or misinterpreted statement but I still had to giggle when I read your post.  It was a great way to end a long day.   "My own son is covered by a home warranty..."

Gosh...I wish my son's were covered by a home warranty! THAT IS SOMETHING I would have shelled out some bucks for on all three of them!!!

:)   Have a great evening! 
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March 15 2012
Home warranty is an essential thing if you are buying an old house, unless you can become a handyman of your own (which is not too hard by the way, as you can learn the skills yourself if you like fixing things around)
Make sure you get a policy with lower deductibles from reputable company. Check out this[hotlink removed by Zillow moderator] site that I used a while ago. You can compare different companies and their offers, all at one place

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March 15 2012
I love home warranties.  Our office uses home warranties from the Coldwell Banker Home Protection Plan.  I have seen homes that had old heating and air units be serviced very well, and when they could no longer be serviced, the client received a brand new unit.

My own son is covered by a home warranty, and they have kept his old unit going.  They don't just fill it up with freon, they fix it. 

I have been impressed.
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March 15 2012

Many of my Buyers and Sellers have found that providing a home warranty is extremely worthwhile. Who pays for it is usually part of the initial contract negotiations.

For the Seller's part, providing a Buyer with a home warranty is not only an act of "good will" it is good after-sale liability insurance for any systems/appliance problems, that the Buyer may have during his first year of ownership.For the new homeowner, if there are any repairs/replacements needed of items that are covered under the home warranty, a $65 service charge is all the new owner is obligated to pay. I've had new home buyers that have replaced HVAC systems, dishwashers, water heaters, refrigerators and pool equipment, just for that $65 service call charge.

I particularly like the program with Old Repulic Home Warranty, but always check and compare the coverage offered among the different companies.

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March 15 2012
My personal opinion is they aren't worth it.
when you have an issue, you must contact the warranty company who contacts the vendor who gets to you in a day or so, so you do without the thing that is broken until that occurs.   Then when they come out they fix only the immediate problem.   If they notice something that would be a good preventive action, they do not tackle it- so when that next thing breaks in 3 weeks it will be a new call for you.

If you fix it yourself, quickly and cheaply, they do not reimbruse you.
I never advise clients TO get them or NOT to get them.  I typicaly keep my opinion to myself so that I have no influence whatsoever and I simply offer the brochures.  but you're asking and my opinion is if you have the skills at al to do most repairs they are a total waste of money.

if you are one that like to repair things well and wants to take preventive steps they are a waste of money.

If you are buying an older home with an older HVAC unit or other big expensive thing that is near end of life and the warranty will cover it and not prorate it based on it's age...It might be worth it.

I bought a home that essentially sat vacant for 4 years minus summer trips to it (foreign seller) and the seller provided a "warranty" which we attempted to negotiate to remove it and just dicount the house another $500 but they wanted it there. We've had a handful of repairs, all of which were simpler to just fix and cheaper than the cost of the copay to call their vendor.  plus when the heating element of the hot water tank went out, they said they would be out Monday (this was Friday) so we did it ourselves. element cost $35. to pay them would have been $50
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March 15 2012
If you go back to your agent and ask them to order it for you (and you pay for it) at their wholesale cost, you can get them for as low as $304---- Globe Home Warranty. Money perhaps well spent, like any insurance......
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March 15 2012
It also depends on the actual Home Warranty company... some are better than others.  The one that we are familiar with is very good - but you do have to pay for additional coverage like "pre-existing conditions" - which could be applied to almost any component failure!   But overall, we think they are a good investment - especially if the components/appliances are getting up in age.
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March 14 2012
Profile picture for sunnyview
I think it depends on the age and condition of the house. They are expensive for the coverage you get, but if you have a major system fail in the first year, they can be totally worth it.

Even with an honest/complete seller disclosure and inspections, there is a lot that you may not know about the house. Considering a home warranty for the first year while you settle in can give buyers a little piece of mind. There are arguments both ways, but first time buyer in the first year I would probably buy one with a good company.
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March 14 2012

You are better off putting that money towards paying down a creidt card.  Then your $400 is actually worth something.  While sometimes warranties pay for themselves most often parts are covered but the most expensive portion of a repair bill labor, is not.

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March 14 2012
I believe in getting a home warranty and if the seller will not cover the cost, I usually purchase it for my clients. The last thing you want to do is move into a home and have to shell out more money for a new air conditioner, pool pump or appliance. The other important factor is getting your home warranty from a reliable company, one who will pay the claim instead of trying to figure out ways not to pay it. Home warranites are basically an insurace policy for your home. Before you purchase it, read what it will cover and what it will not.
The drawback would be if you spent $300-$400 for the home warranty and did not use it. As with all insurance, it is a gamble, which is why I purchase them. I would rather have 10 clients never use it then get a phone call from the one client who needs it and does not have it.
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March 14 2012
I have had MANY buyers and sellers pay for the home warranty and MOST times the buyer is NOT pleased with the limited coverage they get when they call to get service. It is a personal choice but if you already closed, I would not worry about it at this point.
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March 14 2012
They're expensive for the coverage they provide, which makes sense, because they're costly for the company to sell and maintain.

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March 14 2012
 
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