When big things in your home break — like your dishwasher or air conditioning system — they can cost lots of money to fix. Some people buy “home warranties (which are really service contracts) to help cover these costs. But what exactly is a so-called home warranty?
There are different types and options depending on the company and amount you pay, but home warranties typically cover replacements and repairs for things like appliances or air conditioning systems. They last for a set amount of time and — unlike builder warranties for new homes, or warranties included with some products — they cost extra.
And after looking at the details, you may find that a home warranty duplicates coverage you already have. Or covers only part of a product. Or makes it nearly impossible to get repairs done when you need them.
So here are some things to think about before committing to a home warranty:
- Is it likely to save you money? Consider both the upfront cost and costs that may be hidden, like deductibles or fees you need to pay each time products are serviced.
- What are the limitations? Are there limits on the amounts you can be reimbursed? Is accidental damage covered? Are certain appliances or systems not included? Are there restrictions or fees for cancellation?
- Does the claims process seem difficult or slow? Waiting a long time to get paid back can reduce the value of having coverage.
- Does the company have a good reputation? A home warranty is only as good as the company responsible for coverage. Search for the name of the company and words like “review” or “complaint” to see if people have had issues in the past.
Learn more: Extended Warranties and Service Contracts.
Getting unwanted calls about service contracts? Those might be telemarketers looking for your money or personal information.
If you’ve had a bad experience with your home warranty, tell the FTC: ReportFraud.ftc.gov.
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I have not been reimbursed for a new hot water heater and an air-condition repair on two occasions. I was informed by Select Home warranty they do not cover leaks in hot water heaters.
That is hilarious if not stupid. When water heaters go, they leak. It is a good thing that Urologists fix urinary leaks. Perhaps Select Warranty could send me a box of pads for my water heater; $4000,00 worth. and $2500.00 for my air conditioner because I did not get prior approval while they could not provide me with a tradesperson in my area as contracted.
In reply to I have not been reimbursed… by Frank P. Bern…
The comments you write here do not go into the secure database that law enforcement uses for investigations. Go to www.ReportFraud.ftc.gov to report your experience and add your report to the law enforcement database.
The home warranty companies make money by not paying claims. That is really all you have to know about them. I tried three of them when I first moved to Nevada. They use poor quality contractors, pay them as little as possible (which tells you why they don't have good contractors) and deny as many claims as they can. You can take them to court or let it go. I left them before a really large claim was presented by I know they would deny it.
Thanks for providing this information on a monthly basis.
A set *period* of time, rather than a set "amount" of time reads better, if you ask me.
I had a bad experience with Home Warranty. It took 3 weeks for someone to contact me regarding a problem with my microwave. That person told me, by email to call a number to make an appointment for her/him to call me back. I gave up. They did not refund the money I paid for their service
I had a terrible experience with American Home Shield. The shower in my bathroom was leaking so it required for the plumbing to be repaired, and the wall behind the shower in my living room was cut for access. AHS contractor abandoned the repair. I filed a complaint with the local CSLB in Los Angeles County and when the plumber owner received the call from the CSLB he flew over to my home to finish the job because his license would be suspended if he had left the repair open. It took 3-months and a big inconvenience. NEVER BUY A HOME WARRANTY THEY ARE BOGUS spare yourself the problems.
I tried to use First American Home warranty when I purchased my home a few years back. When I had my hot water heater go out the contractor that was sent out told me I needed a “backwash system” to the tune of $1200, installed before he could install a new water heater Told me it was required by the city of Huntington Beach. I had sold RE for 40 years and had never heard of this. I went to HB Building a Safety and was told this was NOT TRUE!. The next issue was my garbage disposal went out on Thanksgiving Eve. My son was able to replace it that night and when I asked the home warranty for reimbursement (showing pictures of the condition of the old disposal) for just the cost of the new disposal I was denied. Told I should have waited till the next business day—which I would not have had use of my kitchen sink for Thanksgiving dinner! I only asked for the cost of the new disposal —No Contractors cost.
And the last issue was the ice maker on my frig went out. I was told because it was wiring inside of the refrigerator door— they could not repair. I then read the contract which stated if the appliances could not be repaired they would replace. When I pointed that paragraph out to the rep I was ghosted!
I called my own contractor and it was a simple repair which he was able to fix in less than 5 min. I forwarded the bill to American Home Warranty stating I waned reimbursement for the service call of they’re contractor charged, as well as what I had to pay my contractor and if I did not receive this I was going to small claims court. Not a good experience with the Home Warranty company! Would never refer or encourage anyone to use them. They are typical insurance companies. Happy to take the premium but not great at fixing needed repairs unless you stand your ground, do your homework and fight for it!
In reply to I tried to use First… by Donna Pizer
The comments you write here don't go into the secure database that law enforcement uses for investigations. Go to www.ReportFraud.ftc.gov to report your experience and add your report to the law enforcement database.
to me, all ins companies have become like the banks always were. They want your money but do not want to give your money back to you. Yet they benefit from the use and interest. You have to read the fine print and almost be a lawyer. With today's fragile electronic technology products break down sooner than they used to. Just had my refrig go. The extended warranty just expired except for the manufactures compressor is covered as a part. Now to repair or replace is the question.
Never trusted them. When you need them they will disappear or they find excuses not to provide the service.
My problem is with the constant communications regarding my service agreement or whatever language is about to expire, blah, blah. This is auto, home, appliance, whatever---all of which I do not have, so they cannot be expiring. It's so aggrevating.
Hello ftc.gov administrator, Thanks for sharing your thoughts!
Thank you for this information.
We were gifted a home warranty by our realtor when we bought a second home. So far, I have had an electrical wiring issue repaired quickly. I had a repair person out to fix my oven heat issue. He replaced a part, but said he didn't fix it, that "it's common for this kind of oven to run 20°-25° hotter or cooler. I called the warranty company. She put me on hold while she called the appliance repair company. When she came back on the line she had a new appointment with a senior repair person to determine if my oven can be repaired or needs to be replaced. So far so good. I'm due to renew in a couple months. This outcome of this repair will decide what I do. Hopefully, this warranty company is a good one.
I'll start off by saying this use to be decent company. Had them since about 2014 with a handfull of claims made that were handled well. Apparently, they were sold to a group that also runs Home Choice a little over a year ago. DO NOT USE EITHER ONE OF THESE COMPANIES. THEY ARE A RIP OFF. I had a built in double wall oven that took 2 companies and over a month to figure out it was "not repairable-parts unavailable". I understand that with the way thing are now. I said OK, replace it. Their response was "Oh, we don't do that anymore, but we will send a Lowes Gift card for the replacement value "for my convenience". Well, that's not very convenient. I don't like it, but I guess I can deal with it. (This way they get out of expense of paying a tech to install it.) Then they said the amount of the gift card would be $667.00. because that's how much they pay their vendors to replace a unit like what I have. (These units cannot be purchased for less than $2500.00 and that doesn't include installation.) So i requested the name of one of these vendors they use that can replace my oven so cheaply. The lady's (Lydia?) indignant response was "I already told you we don't replace appliances anymore". So their settlement amounts are based on an imaginary vendors quote. Wow. Just. Wow. I told her this was an unacceptable amount to which she responded that was their final (and only) offer. I still have not received any money (or gift cards for that matter), but they sure didn't miss charging my credit card for the monthly payment. This company is the definition of a scam that uses deceptive trade practices.