Question about home warranty?
Question:We've got a home warranty that came with the house, and I'm questioning if I should extend it. Here's why:
I can do most of the home repair stuff myself, that's not a problem. The problem is that the A/C condenser we have is over 20 years old, and runs heavy over the summer (in s. Texas). Keeping the warrantly would mean that I could cheaply get this replaced upon it's demise.
The A/C currently runs fine, with no apparent defects (knock on wood) and upon examination of the unit it appears free of defect, other than some minor rust/wear. But all the same, it is over 20 years old (not sure how long these things are supposed to last for)
Similar situation with the water heater, which is also fairly old: granted, the water heater is easy to replace, but all the same, it would be cheaper to have this replaced under the warranty as opposed to buying a new one.
What do you think? Drop the warranty and risk it? Or keep the warranty as "insurance" for the condenser?
Thanks
Answers:
Below is an answer I gave to another asker...most of this will apply to you.
Before you consider a home warranty, consider this. I'm a licensed plumber and I used to work for a company that did warranty work for these companies. American HomeShield, Old Repulic, American Home warranty, and a few others. Here's the deal. Say you have a leaky kitchen faucet and you call your warranty company. They send me out to your house and I collect a copay of 50 bucks. The warranty company gives me, for example, 90 bucks per call minus your 50 which means they owe me 40 bucks. Here's what you dont know. The contractors go to your home and try to find reasons to get your claim turned down by the warranty company and warranty companies have a lot of reasons they will turn down claims for. When your claim is denied youre out the 50 dollar copay plus the repair of your problem. The contractors do this because they make more money. My boss actually told me to try and get claims turned down and my incentive was that he would give me half of whatever money I brought in. I did this for only about 2 months and had to quit because it is morally wrong. No matter what your problem is whether it be plumbing, HVAC, electrical.all contractors use this tactic and the customer, YOU, gets screwed and pissed. I wouldn't recommend spending the initial 400 or 500 bucks to get the policy and then the 50 or so bucks a month for a warranty that is basically useless. You may call one of them and ask them about this and they will say that it's not how it works but trust me! I've seen it first hand, both as a plumber and as a friend of a warranty policy holder of American HomeShield. I told this friend that their claim was gonna get denied and exactly what the plumber was goin to say. Guess what.I was right and the claim was denied. Sorry to be so long winded but I truly despise warranty companies and strongly suggest against them.good luck!!
Break the costs out. Is it cheaper for you to extend the warranty for a few years and replace these things or is it cheaper to just drop the warranty and buy them outright?
Personally, I say there will always be something to fix in a house and more bills equals less money to do it with.
You might be better off just putting the money you spend on your warranty in a money market account and save it for these emergencies.
You can`t do the ac unit yourself, as for the water heater it`s cheaper in the long run to rent it. If something goes wrong they fix it. If the roof needs replacing that could cost a lot. You have to look at the cost of insurance verses the cost of a major repair. Add up your monthly cost and see if it makes sense. Make sure your warranty covers big repairs like that. If it does not find out what it covers and go from there. 20 years is a long time for an ac unit. The compressor itself could cost more than a years insurance, not including labour.
I have a warranty through Sears, no copay, and it has been worth it's weight in gold. I keep it and everytime I buy a new appliance, I add it. I have had so many items in my home repaired for free that would have required expensive parts and service calls or even replacement. I get better and faster service through Sears, than the manufacturer's give. The AC repair you are facing alone on a 20 year old unit should be enough to convince you that the warranty is worth extending. In our state, if it is an old freon system, they cannot repair it, it has to be replaced and you have to pay for the hazardous material disposal. Depending on the size unit you have, you could be looking at $3,000-5,000 to replace it. According to Consumer Reports Repair or Replace chart, you are pushing the limit of how long an AC unit should last as it is.
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