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We Love Our Home Warranty!

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Recession Mama Michele Ashamalla: When you buy a house, you often get a free year on a home-warranty plan. We got our free year almost fifteen years ago -- and have been renewing it ever since!

American Home Shield
With a home-warranty plan, you pay a few hundred dollars per year (depending on the size of your house and its amenities). When something needs to be repaired, you contact the home-warranty people and they send out a representative from one of their contracted repair companies. You pay that person a service fee. (When we began our warranty, it was $25 per call; now it's $65.) For that service fee, they fix whatever's broken -- provided, of course, that it's covered.

Since you negotiate your own contract, you generally decide what is covered. For example, brand-new appliances may have their own warranties, so you can save a little by removing them from your home-warranty plan for a year or so. I find that the home warranty is good for two things. I might get a small problem fixed for $65 that I would have let go if I was going to have to pay a lot more for repair. Now that small issue doesn't turn into a big problem. Also, if you have several problems for the same repairperson (two leaky faucets, for example), one service fee will cover them both.

Second, the home warranty is like insurance. I live in an old house and I am betting that something big and expensive to fix is going to come up every so often. A few years ago, we needed a new water heater. Our old one was 75 gallons and we received the same size installed. That took care of our contract fee for that year. Two years ago, after many years of faithful service, our air conditioner blew and the company replaced it with a model that would have cost us $3,000 -- not to mention the cost of the crane rental that was necessary to install it on our hillside home.

Last year, some plumbing issue required a couple of guys to be here messing with our pipes for the better part of a day. I was pretty happy to not be paying an hourly rate for that. Since I'm looking at a refrigerator and garage door motor on their last legs, I'm thinking that this year it will be worth it, too...

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4 comments so far | Post a comment now
Ashley September 26, 2010, 7:59 AM

I have a warranty with the same company and have had it for 2 years. It is great and has paid for itself both years!!!

Rebecca September 26, 2010, 1:17 PM

I guess your experience must depend on the company. We had a warranty for three years, and just let it expire a few months back. They were next to useless.

We had recurring problems with the AC. Specifically, the unit was over 10 years old, and was a piece of junk even when it was new. So parts would fail on a regular basis, and we would be trapped without AC until we could contact the company, then they would contact the repair guys, who would then contact us for an appointment. They would come, figure out the problem, and then have to wait until the company approved the buying of the new part before they could even order it.

All told, we probably spent 10 or so months sans a working AC, during the summer months of course (we live in Florida). Had to leave all of the animals in the bedroom with a window unit so they wouldn’t get overheated during the day. Even then we had to put ice in the water bowls (for the cats and dogs), and leave rocks that had been cooled in the freezer in cages (for the rodents). It was totally miserable.

The various repair guys all requested that they be able to install a new unit for us, because it would cost more to keep replacing the failing parts. The company ignored them. After our third year, and our third AC failure, we decided we needed to just replace the unit. Our new repair guy condemned the old unit, so the company chipped in a whole third of the price (price of the unit, that is, they wouldn’t cover the labor at all). Thankfully, my dad was able to get us a decent discount, because he worked on AC units to put himself through college, so he knew people in the business.

We let the warranty expire. It just wasn’t worth the hassle when they wouldn’t even cover what HAD to be done.

Jennifer September 26, 2010, 6:02 PM

I agree that it must depend on your warranty company. I had a pretty serious plumbing issue a few months back and calls the warranty company who informed me that because the source of the issue was outside the actual foundation of the home that it wasn’t covered. This is not the first time I had called about an issues that conviently wasn’t covered. This warrenty was included in the purchase of our home a few months ago and I have no intentions on continuing business with them but maybe I’ll shop around.

Ten Tees January 8, 2011, 5:58 PM

Great information. Good to read. There is a thing to give about tee shirts.

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