Home Warranty Companies

3 Replies

I got a Home Warranty on 11 out of 12 of my rental properties. When fixing appliances or doing electrical work the contractors for the Home Warranty company do an excellent job. They charge me $65 for the service call and all is good. When it comes to Plumbing it's a different story. About 3 months ago I had a bathtub start to drip. I put in for a service call with the Home Warranty Company and the Plumber wanted $1,000 from me to replace the value and to put in an access panel for the valve for the future. Problem is they could not put in an access panel in if they wanted to, since the master bathtub was backed up to the guest bath separated by a wall! I called out another plumber that I use for my Maintenance work. He charged me $120 and replaced the Moen Cartridge he got from HD for around $40, plus $80 labor! Fast forward. I had a 40 Gallon hot water heater go out last week. The same plumbing company came out and wanted to charge me out of pocket $1,100 to bring the Water Heater up to Code! This did not include the water heater! He was going to charge the Home Warranty company $768 to replace the water heater! I told him to go take a hike and he was furious. The Home Warranty wants to do a $361 settlement which won't even cover the cost of the water heater! The next day my contractor purchased a Water Heater, Kit, and Drip Pan for $500 and charged me $150 Labor and a $50 Delivery charge for a total of $700! I looked up the Plumbing company and their a member of the BBB and have a A+ Rating with only 2 complaints! How can they charge so much for so little work? Where can I find a reasonable plumber, HVAC, and Electrician in the Houston area? I had looked at other posts and see I should have consulted with Bigger Pockets before spending $6,000 for Home Warranties on 11 house's. It was a bad idea in the history of bad idea's!

I don't have any referrals for you, but I had a similar experience with a Warranty company on six units and didn't renew. Thankfully it was a seller concession negotiated by my agent so it didn't cost me too much. I paid for two HVAC replacements out of pocket due to the same shenanigans. What they wanted to fix it (denied claim because filter "improperly" installed) was more than replacement cost from my AC man. Lesson learned.

I've had good luck with the appliance and HVAC coverage.  Haven't had an issue with the plumbing or water heater yet. 

They'll give you that $361 buy-out (settlement) with receipt of work/purchase, right?  That's how it works for appliance buy-outs anyway.  Wouldn't that put you at a total of $339 spent on the repair, that in all actuality, your tenants should have paid for through repair savings in addition to the premiums for a majority of capex (86 the roof)?

Home warranty satisfaction is hit or miss and you'll always end up paying more in premiums, service call fees and non covered service (Freon comes to mind) than you will receive in 'cost-free' service.

If you're able to put away ~7200/year by canceling the warranties, I would just save the cash.  That money plus the repair reserve should be enough.

Good quality plumbers are certified, skilled labor and are quite worth the price tag.  Their labor is one of the biggest line items in a new construction as well.  Seems like you've had good experiences with the one you've used, I'd stick with them.

Justin,

I had the new contractor out the next day. Not sure how the first plumber could replace the water heater for $361.00 when the water heater costs $400 at Home Depot. When I worked in IT there was only a 10% margin on PCs. So if the retail price on a water heater is $400 the wholesale cost would be $360, the contractor had to make his money somewhere so stick it to the homeowner by claiming the water heater was out of code! It was, it needed a $20 pan and $30 in Flex hoses for the water and gas. It took the contractor 2 hours at $75 per hour. Retail Plumbers charge $110 per hour since their are two of them a Journeyman and an Apprentice, that's $220 per hour. The way they get a higher wage then that is claim a project cost which can run hundreds if not thousands of dollars!

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