Home Warranties- Are they worth the “savings”?

Often we have homeowners who ask us if a home warranty is worth it.  It sure sounds good- you’ve got a problem, we call the home warranty company and they send out one of their preferred contractors and the problem is fixed.  The home owner only  has to pay the deductible which is somewhere between $75-100 per visit – that’s it.  And, if they find a problem or have to replace an appliance, it’s covered and you are only out the amount of the deductible.  Sounds good, right?  Well, as they say, if it sounds too good to be true, it probably is!

Home warranties can be great but they can also make a problem worse.  Recently we had a situation where a tenant’s heat went out.  Luckily, it wasn’t terribly cold and this homeowner had a home warranty so we called and asked for a contractor.  The contractor was supposed to arrange with the tenant to come out but never did.  Finally, we got the service call arranged and they went out and basically did nothing.  They said there was a problem and would have to order some parts.  They never did that either.   Over a week went by (almost two) before anyone knew the contractor had not followed up with the parts (again, we were lucky it wasn’t freezing out!).  By this time the tenant, understandably so, is getting frustrated and we are hunting down the “preferred” contractor.  If we had sent one of our normal guys, it would have been done in a day and everyone would have been happy.

In a case like this if it had been 20 degrees outside, we would have had to put the tenant up in a hotel at the owner’s expense which could have cost them way more than having one of our reliable contractors come out in a timely manner.  So if you’ve got a problem that is not urgent, a home warranty can be good but it’s the luck of the draw which contractor you get.  If it’s an emergency or something complicated, I suggest going with someone you know and trust.  In the long run, that will likely save you money.



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