Today I am not in a financial position and have not owned my invest long enough to have a pool of cash to pull from if there is a large unplanned repair. I was wondering what others think of utilizing these warrantees to off set large repair costs. Right now I will pay a flat fee for a technician to come out and this covers the total cost of the repair (in most cases as long as not structure alterations are made to the home). For example, I needed to pay to have an vent outlet altered when I had a furnace replaced. Coverage depends but can include electrical systems, plumbing, appliances, garage door opener, and garbage disposal. Fee to come out is $100... so if you know your repair would be less with a handyman etc. you should just call a handyman.
Any experiences with these? Thoughts?
I recently did a lot of research on home warranty companies because I may have some leftover closing costs that might cover one. The consensus on BP and other forums online seemed to be that dealing with these companies is typically a headache. I found two common scenarios: (1) the home warranty company would find reasons to refuse repair or replacement (e.g., the system was improperly cared for and thus the warranty on that item was voided) or (2) it would take weeks or months to (a) schedule a visit and (b) subsequently receive a repair or replacement. In the instances when a replacement was given, owners seemed to have little say in the quality of the replacement.
These concerns seemed to exist across dozens of threads and comments. Even if your warranty company agreed to replace a critical mechanical system there's no way you could wait weeks or even months for that to happen. Setting aside the yearly premium into a reserve fund seems like a good alternative as this can add up to $600-$800 a year on top of your regular monthly reserves. Also, I've been surprised with how many home projects can be tackled with a couple of hours on YouTube watching some tutorials. I hope this helps!
Thanks for the reply. As a home owner (occupant) they worked well but this a very different situation. There is likely more urgency when the home owner is living in the space and there may be less concern for a business requesting service. On larger “replacement” situations they have always found a way to add costs but never attempted to void the warranty. This could be a major issue.
Personally, I never use them- nothing but bad experiences. Some of my property management clients insist on using warranty companies on their rentals and it's always a complete nightmare for us and the tenants- of course, it doesn't effect the owners when they use a PM. Service is bad, communication is worse and there is literally no motivation on their end to perform. We just fired a client who insisted on replacing a dead water heater through her warranty. We couldn't get the warranty company to return our calls or emails, owner refused to just buy a water heater and the tenant had no hot water for 8 days. Who suffers in that scenario? The tenant has a terrible experience, they blame the property manager and the owner goes about their day.
That's just one bad experience, I've had lots. We've actually added to our owner contracts that we do not work with home warranty companies- it completely eliminates our ability to give our tenants great service.
@Shanna Barnes . Yes. Sort of. I invest in duplexes. I always ask for the seller to purchase a 12 month home owners warranty. This has actually been successful most of the time. It allows for any large maintenance repairs to be covered for a year while the property becomes self sufficient. I have never renewed the warranty, or paid for one out of my own pocket. If the seller declines, like my last purchase, I work out a better price on the purchase. Yes, warranties can be a pain and time consuming, but they have saved me money in the long run since most purchases will have problems in the first several months.
Good way to utilize them. Unfortunately MN is a sellers market and adding this is a bit of an ask in many cases but worth it.
I’ve only heard bad experiences. If you look at their policy in detail, they tend to only cover “superficial” stuff. So basically the $50 to $100 repair is covered. But when you have a serious problem is not covered. I the term “warranty” is a misnomer given the limited coverage they provide
PLEASE click on the magnifying glass at the top right on your screen and type home warranty. There will be well over 2000 discussions. This question is literally asked every week or two.