Why home warranties are no guarantee

After faithfully renewing his HMS National home warranty service contract for 11 years, Angie's List member Robert Shelton reached his breaking point. "It's been hell dealing with HMS," he says. "I'm done with the whole idea of a home warranty."

Shelton received the warranty when he purchased his Sterling, Va., home and used it twice before for small repairs. But when his A/C broke last summer, he says HMS, which has an overall nationwide grade of D on Angie's List, only would cover a portion of the total fee: "The repair cost more than $1,000, but HMS only wanted to pay $250. On top of which, they sent a low-quality contractor."

For the past six years, home warranty service companies have been the No. 1 "worst graded" category by Angie's List members. In 2010, 54 percent of the reviews on these types of businesses received a D or F grade. Members misunderstanding or disagreeing with what their warranties cover and the quality of repair work are cited in the majority of complaints. 

Understand the fine print

In order to minimize misunderstandings, experts stress the importance of reviewing and understanding a service contract before purchasing a home warranty.

"Like anything else, make sure you shop around," says Tim Meenan, executive director of the Service Contract Industry Council, a national trade association that supports home warranties and advocates the regulation of the industry. "Read what's covered and the exclusions. If you read those two sections, you'll have a good idea if it's a policy you want to buy."

A home warranty service contract isn't an insurance policy that protects you from loss, but is meant instead to provide service, repair or replacement on a home's appliances and major systems, such as heating and electric. Typically, contracts are good for one year. "It gives people peace of mind," he says. "Lots of folks can finance a service contract but cannot finance a new $4,000 HVAC unit."

The average cost of a basic coverage plan ranges from $350 to $500 a year, with the cost of an enhanced plan adding $100 to $300. Prices reflect not only coverage, but also a company's loss history, which is determined by how often an item breaks down and the cost to repair it. Some home warranty companies offer additional coverage for certain items, such as a well pump or pool, for an extra fee. Regardless of the type of plan, homeowners typically pay an additional service fee ranging from $50 to $75 for each repair job.

Shelton says he feels like he understood the terms of his warranty contract and was frustrated at HMS for only paying for a specific component of the A/C, which wouldn't work unless he replaced the entire unit. "I've paid [HMS] $4,000 over the years, including $50 for every service call," Shelton says. "I would have been better off putting that money in a savings account."

HMS National president Doug Stein declined to speak to Angie's List Magazine. Nine other home warranty companies didn't respond to our interview requests and neither did the National Home Service Contract Association, a nonprofit trade organization comprised of some of the largest home warranty companies. A spokesperson for one of the home warranty companies told us NHSCA asked its members to refrain from participating in the story, but Arthur Chartrand, counsel for the NHSCA, repudiated that assertion, writing in an e-mail, "Our communique to all NHSCA members ... actually suggests that members reply, but stated, 'All members are free to make their own judgment call in regard to your inquiries.'"

Differing opinions

Twenty-four percent of Angie's List members responding to a recent online poll say they have a home warranty - and many echoed Shelton's sentiments, arguing they're a waste of money. Member Patrick McGranahan of Winters, Calif., says even though his new home purchase came with a warranty from American Home Shield, he found the policy to be underrated.

"I did the math, and I figure you're paying all this money for the warranty and then you pay $50 to $75 for every service call - it really doesn't add up," he says. "Plus, the people they sent to do the work were late and unprofessional. I got real put off."

On the other hand, member Michelle Morgan of San Clemente, Calif., had nothing but good things to say about the contractors American Home Shield sent out to repair her pool and spa, and plans to use them, if necessary, in the future. Gayle Wilson of Los Angeles says she's successfully utilized her AHS plan 10 times in the past five years for repairs to her washer, dryer, refrigerator, freezer, microwave and clogged drains. "I'm delighted to have someone to call when I have a problem," she says.

Nearly two-thirds of members who took our poll say their home warranty came with the purchase of a house. "It's something I recommend on every transaction," says highly rated real estate agent Beth Smith Shuey of Keller Williams Realty in Charlotte, N.C. "But I warn my clients that not everything is going to be covered." Nonetheless, Smith Shuey says 95 percent of her clients who buy a home close on the deal with a warranty included.

The real estate connection

Throughout the country, the real estate industry is closely tied with home warranty service contracts. "It's about liability control," says Mark Finchem, a highly rated associate broker for Long Realty Company in Tucson, Ariz. He requests sellers pay for a home warranty on every contract to reduce their chances of being sued if an appliance or system breaks down. "You're telling the buyer everything you know about the house in a disclosure statement, but what happens to those things that you've forgotten about?" he says.

While home warranty companies often market their services to realty companies, neither individual agents nor brokers are permitted to receive referral fees for promoting one warranty company over the other. "In the past, warranty companies would offer real estate agents a fee from $40 to $75 that was typically paid after closing for each contract written," says highly rated Realtor Jason Bowman of RE/MAX International Inc., in Mason, Ohio.

In June 2010, the U.S. Department of Housing and Urban Development issued a ruling that home warranty companies could not pay real estate professionals for referrals. "I actually feel this is a great thing for our industry and consumers alike because Realtors can offer their customers better advice on warranty program decisions when the financial motive is out of the picture," Bowman says.

Like many Realtors, he relies on his past experiences when suggesting a home warranty company. "If there's a customer service issue relating to a particular warranty company, I won't offer their service," Bowman says. "On the other hand, I'll report positive feedback from past clients to new buyers."

Even with the new rule in place, some agents don't endorse them. "I think home warranty contracts are a good concept, but mislead buyers into thinking that they offer a guarantee on the house," says highly rated Realtor Jen Geisinger of Maple Grove, Minn. "I also think the fine print can be prohibitive to the needs of many situations that buyers are likely to encounter."

Warranty companies speak out

Not every warranty company offers coverage to homeowners nationwide, but the industry is regulated in all 50 states under consumer protection laws. Also, they're required to be licensed or registered by the department of insurance in 32 states, according to the SCIC. North Carolina regulates service contracts under the Attorney General, while Texas regulates them through the state's Real Estate Commission.

Gwen Gallagher, president of Old Republic Home Protection, says her company strives to provide comprehensive coverage, but inevitably some claims will be turned down and could result in unhappy customers. The most common reasons they deny service is because the item, such as a broken window, wasn't covered under contract, or the service, such as replacing missing parts or components, was excluded.

Homeowners also are denied coverage if the item wasn't in good working order prior to purchasing the home. "We don't inspect properties; however, we ask that in good faith, plan holders do not place claims on pre-existing defects," says the 33-year industry veteran. "It's unfortunate when the services rendered do not meet expectations," she adds. "I can speak firsthand of the desire we have, from the top down, to make a positive difference."

To obtain the most value from a home warranty, Gallagher says it's important plan holders read and understand the coverage that's offered, and the limitations. "We've tried to make it as simple and easy-to-read as possible," she says. Old Republic offers coverage in 25 states plus the District of Columbia and plans range in price from $270 in California to $375 in Texas.

Contractor selection

In addition to thorough coverage, providing competent contractors for plan holders is a priority for most home warranty companies, according to industry leaders.

American Home Shield, has a network of 11,000 professionals to service their 1.4 million customers nationwide. Company spokeswoman Nicole Ritchie says contractors are screened during the application process, including a background check. "We believe our customers expect - and deserve - professional service at all times," she says. "However, in the unfortunate event that expectations aren't met, we encourage customers to make us aware of any issues, and we'll take corrective action as appropriate."

Contractors working for a home warranty company often have to meet set mandates before they can work on a customer's home, such as acting and dressing professionally and following specific guidelines for pricing jobs.

"They need to have the proper amount of insurance and any required certifications or licensing," says Eric Brody, customer service supervisor for highly rated Colonial Home Warranty, based in Wilmington, Del. and serving many parts of the country. "And we keep a rating system on our contractors based on feedback from customers. Their rating directly relates to how many jobs they get from Colonial." The company offers three levels of coverage for homeowners, ranging in price from $345 to $432.

Eric Lipp, owner of unrated Patriot Air in Tempe, Ariz., says he works with several home warranty companies, including Colonial, and appreciates the business, but also understands he needs to keep costs down. "When you're a startup company, it's a great way to get free leads," he says. "[Home warranty companies] know what things cost, and they reward contractors who have the cheapest ticket by giving them more work."

Colonial says pricing is one of many factors they use to rate their contractors. "Most contractors are willing to accept the negotiated rates in exchange for the higher volume of work," Brody says.

For the past 15 years, unrated Kings Appliance in Las Vegas has partnered with a number of home warranty companies. "We like that they send us business, and whatever the homeowner needs, we're here to help," says office manager Maria Reyes. Although Reyes advocates professionalism and experience among her technicians, she also says sometimes they have to compromise their service to keep costs down.

Avoiding cost restraints is just one reason some contractors choose not to partner with a home warranty company. "We've been approached by several of them, but it's really not advantageous for us," says Mike Fedor, residential service manager of highly rated WF Hann & Sons in Bedford Heights, Ohio. "They're very cookie cutter as far as repairs are concerned."

Dave Mejean, HVAC manager for highly rated B&W Plumbing & Heating in Speedway, Ind., doesn't plan on working with home warranty companies either. "Their pay scale is nothing we want to mess with," he says. "They're looking for people to work for little money and customers might not get good, quality work."


Comments

Much of what everyone has said here is the absolute truth. I am a service contractor that subs out to 2 different home warranty companies. We have to keep our ticket prices low or we don't get calls. When we do feel like our customer needs a new condenser, compressor, or a coil, we are penailzed because it drives our ticket prices up. Here is fair warning. Warranty companies want their service contractor to fix or replace a part to keep your AC or heating running. It doesn't matter if the system is 10, 15 or 20 years old. As long as a part will fix your issue, that is what you will get. To further complicate the matter, when a warranty is being sold to a consumer, the salesman is offering them the world. Your whole system can be replaced up to $15,000 value. What that warranty really means is $15,000 on replacement "parts" can be spent in a year to keep your existing unit working. This is a very touchy subject for home owners and service contractors. While the warranty business fills in our slow time, we are also hindered in what we can say and do for a customer. We always are mandated to fix what is there at a low cost for service, labor and parts that the homeowner does not see. The deductibe is paid and then we have to charge less than market value for all of the rest of the work when billing the warranty company.

At first glance one would thing a home warranty is the way to go. But what is the recourse for a young women who purchased a plan and every time the furnace or air conditioner breaks a tech comes out to 'replace' a part. Even though they have stated it is an old unit and needs replaced. However, the warranty company keeps sending a tech to replace each part. At this rate I will have paid for new unit because the visit fee is $75.00. What recourse do I have, I've told them the unit needs replaced they keep sending tech to replace parts. One part is replaced and another breaks. Frustrating and I feel as if I am stuck.

Let's face it, home warranty is no different than any other insurance, period. If you recognize that you are paying for something that may never be needed going in, then when you have a loss, you recognize the benefit. The 50-70 per loss/claim is your deductible, which you have to pay on any coverage, cell phone, auto, homeowners, etc. Each and every claim is a new loss. With that said, I will say, I had a home warranty on my "home from hell" in California, and Thank God we had it. They paid for a new furnace, new water heater, new well pump, just to mention a few things. Yes, I had to pay my deductible each time, but the $500-600 warranty paid for itself over and over in that home. I would rather have paid the $500-600 and never had to call on them. I would have probably been like everyone else out there complaining that they are a big waste, but when you have a claim that would have cost you hundreds to thousands of dollars, writing a check for the $50 deductible is relatively painless. I found this website while looking to purchase a home warranty on a home we are about to buy, and I will have no regrets, especially if I never need to use it. Take a moment to add up how much you have spent on auto insurance. If you have never used it, you might have been able to buy a car with the money, but it only takes one claim, one lawsuit, to make that 'expense' a worthy investment! Best wishes.

Sharalyn, You are talking about home warranty plans from years ago, things have changed in the last few years. They do not, I repeat DO NOT replace things anymore. They will part it and piece it together over and over again and at $60 a visit from a tech it adds up. I even upgraded to a premium plan. My furnace is over 20 years old, has been involved in a major lawsuit for leaking CO, and my warranty company refuses to replace it. When I asked them how much it would be to pay out if I just want to buy a new furnace myself, because hey, don't want the family and I to die from Carbon Monoxide poisoning in the middle of the night, they tell me the payout is $60. This for a part that I can't find for less than $250. We have small children, it is mid-winter and currently we have been without a furnace now for a week and counting, while the warranty company continues to order parts and repair when we have had 3 separate HVAC pros recommend replacement, not to mention one of their own techs refused to work on this unit. Home warranties are a complete waste of money, unless you don't mind being nickeled and dimed to death and living with appliances that are continually dying, and lets not forget dangerous! I have documented all of this and if my family and I dies from CO poisoning, I have made sure my surviving family will sue my home warranty company. We will not renew our warranty when it comes up, but will instead save the money toward a new furnace. The only time I would recommend a home warranty is when you buy a home and the seller pays for it, maybe you can have one expensive repair taken care of in that first year, but don't expect them to replace anything or be timely about it. And expect to be on hold for 20 to 60 minutes on the phone every time you talk to them.

I paid $500 for a warranty to cover several large appliances in my new home. The ice maker went out in the freezer. After paying a $50 service fee the technician told me that replacement parts were roughly $450. BUT the plan only covered up to $250 per appliance. So if you have any issue beyond a gasket or a filter tightening, the plan is worthless.

As a Realtor I have been in the habit of buying these policies for my buyer clients. I have mixed feelings about these. The companies are known to deny claims however I have almost always been able to intervene to make sure they fix the broken item. A call to their regional representative, and a threat to stop buying policies if they don't fix the appliance, gives me some leverage because of the thousands I spend on these every year. Of course there are some home buyers who expect the warranty companies to cover items that are not included in the contract. Can't help there. It is a fact that these companies are more likely to send substandard contractors. It is necessary to lean on the warranty company in some cases. It can take longer to get a satisfactory resolution as compared to the home owner who simply calls his own contractor and pays out of pocket. If a home buyer has the funds to fix any appliances or HVAC problems out of pocket, I would suggest they don't bother with home warranties. The warranties are good for the first time buyer whose funds are light after the closing. In order to overcome the "pre-existing condition" claim by the warranty companies, it is important to have some documentation that the items were working normally when the new owner occupies the house. A home inspection report and a Walk-through report on the day of closing are sufficient evidence in almost all cases. Consumers often like the fact that they have some warranty on the systems and appliances. I buy these policies for my clients because they are more likely to remember me positively when they save a few hundreds or thousands on repairs. That's one way to get referral business and repeat business. One should be aware that systems and appliances are always failing. A house may have no expenses for years then all of a sudden there are a series of repairs. Maintain an emergency fund of, say, $10,000 and you will be able to deal with almost all repairs when necessary. The cost of warranties over many years can be about the same as simply fixing or replacing the items when these break.

As an A/C contractor which has done work for home warranty companies, This is a complete waste of money for any homeowner. Denials for repairs are numerous and this is the first thing the technician is looking for when he walks into any house. Improper installation, code violations, lack of maintenance are the key top three. Guaranteed, hardly any installer or previous service guy will cover the little details that will get a denial in the future. That's what we're trained to spot. Then, if we do have a descent job, we're going to hit you for up-charges. By the time we're done, we have close to 75% of a regular full paying job. Plus what little the warranty company kicks in.

We are a Service repair Hvac company who will not work for home warranty companies. They twist all information and ask us to bill the customer for all items not covered by their terms. It is not worth the wasted time. most customers think the will pay nothing and are not prepared for this expense. They also do not pay the bill we send them. and fully hide behind email - no return calls and time. Advise other contractors for hvac to not work for them. you will consume phone call time and customer is usually not pleased with any results in which they have to pay (again) customer of these service should stop paying after the home purchase passes first year. many times the reality company will pay the difference this 1 year period to please customer (repair only) not replacement. CAUTION CAUTION TO ALL THAT USE OR GET INVOLVED WITH -- LOSS OF FUNDS WILL REAR ITS HEAD IN TIME.

I'm curious about the comments where A/C unit repairs were denied by AHS because of claims of improper maintenance. Their current contract terms read as follows. Is this not true? 2. Coverage under this contract includes normal wear and tear malfunctions during the contract term (as defined in Section B). Coverage under this contract also includes malfunctions of covered items which occur during the contract term resulting from the following situations prior to and during the contract term: a. Insufficient maintenance, rust, corrosion, or sediment; b. Improper installations, repairs, or modifications; c. Mismatched systems where the indoor and outdoor units were not properly matched to each other in capacity or efficiency for proper operation; and d. Undetectable pre-existing conditions which are defects or mechanical failures that could not have been detected by a visual inspection and/or simple mechanical test. A visual inspection of the covered item verifies that it appears structurally intact and without damage or missing parts that would indicate inoperability. A simple mechanical test is defined as turning the item on and off to ensure that it is operational. While turned on, the item should operate without causing damage, irregular sounds, smoke, or other abnormal outcomes.

You are referring to "ServicePlus" coverage - an add on package with AHS - if they client purchased the "core" product, then they would not have paid or received this additional coverage. Could explain the denial.

If you do your research and pick a reputable company from your area then the warranty is totally worth it. I have paid $1600 for the last 4 years of service. And I have gotten about $2800 worth of repair done. So I saved $1200 and the hassle of finding contractors every time something acted up. There was only one time they refused to repair an appliance and that was only because the breakdown was clearly from a part not covered. Keep in mind my appliances were only 4-6 years old at the time that I started getting the warranty so these were regular breakdowns and not breakdowns on old appliances. The only negative I have seen is the time it takes them to finish repairs. Sometimes I got the issue resolved within 1-3 days. Other times I would have to wait 1-1.5 weeks because of parts needed/no appointments available because they were too busy.

Hi: You say it's worth it if you know how to pick them, but you didn't say whom you picked. Please enlighten us. Thank you!

I can tell you this as many good contractor that are on Angies list I'll bet there are just as many bad and I had the worst ever. I have a home warranty and I could tell you they do a great jobwhen I call them so I don't know what there talkingh about.

I have had ahs for about 5yrs now overall the service has been good, I have had good and bad contractors, one i had for my a/c was terrible, the tech did not seem like he wanted to do the work and lied about access to my house, when i called the company re their tech they took up for him, the next time i had a/c problems i told ahs i did not want that company and was given a different company, this company was very helpful and professional. I have used ahs many times during this 5 yr period and they have always been very helpful. Today I had to call them re my washer, last month my garage door broke, i called for service and a company was dispatched the springs on my garage door broke as this was not covered under my warranty ahs did not pay for the repair, the company told me i didn't have to pay the service fee if they did the work which i let them do, i did not know whether i pay the fee or not the company bills ahs and they pay the company and ahs will charge you for the fee anyway,well today when i called about my washer i was told about the previous fee, i expressed to the agent i did not have money to pay the previous fee and the new fee for my washer, agent told me she could send me card to cover my fee for the washer but i would still have to pay the previous fee before i could go with my next request, so i told them to cancel request for my washer, at this time i was mad because the garage door tech lied about me not having to pay service fee to them they just billed ahs and knew ahs would get money from me i called garage door company and expressed my displeasure with them to no avail i called ahs back and spoke to a different agent who went ahead and processed the request for my washer and told me when i received the card for the previous fee just call back and they will apply the card then, so now all i have to pay is for the tech to come out for my washer. i have mixed feeling regarding home warranties, i don't know if the warranty companies are bad or if it is the contractors they use or a little of both, so far ahs has been ok for me as most times i needed them they have provided the service i needed

Permalink, why wasn't the spring covered? It's not excluded in the contract??

3. GARAGE DOOR OPENER COVERED: Wiring – Motor – Switches – Receiver unit – Rail/Trolley assembly. NOT COVERED: Doors - Hinges - Springs - Remote transmitters – Track assembly.

As an hvac contractor I refuse to work with these companies. They never have the homeowners interst in mind. They only want you to make the repairs as cheaply as possible. Will almost never authorize a unit replacement over a repair no matter how old the unit is.

As an hvac contractor I refuse to work with these companies. They never have the homeowners interst in mind. They only want you to make the repairs as cheaply as possible. Will almost never authorize a unit replacement over a repair no matter how old the unit is.

Purchased in January 2012 now its.July and.the.summer is here a/c unit its.not cooling.my.house 2-10 home warranty stated it was not properly.hooked up and they are not going.to fix.it

I'm looking at the comments people wrote about home warranty companies, and having worked in the media for years, including advertising, consumers should realizethat many of the compliments might have been written by employees or owners of the companies they compliment. As I recall, I spoke t one home warranty company about signing up with them, as they were listed on Angie'ss list, and the employee said it is expensive to be listed with them. I wonder if this was a disgruntled or honest employee.

we have a newly built home that is less than one year old. we ask your advice on getting a service cintract for heating/cooling/water heater, just majpr items, we live in las vegas nv,

I am an HVAC contractor and have worked for most of the home warranty companies over the years. The warranty company is nothing more than a middle man sucking money out of the customer, the contractor, and providing a terrible disservice to both for it. They bully the contractor to work for ½ what he would normally do the job. The contractor with the lowest average cost per call is put in the number one position. If the contractor has a large repair it skews the average and the contractor won’t get calls. If you consistently do what is right for the customer and push to replace equipment that is old and rusted out then you will suffer the consequences! After working with A------n ---e S----- for 10 years the customers loved my company! They would request me and **S didn’t like that. They (HWC’s) want to control the contractor sent out so they can put the contractor with the lowest avg. cost per invoice out first. I was told I replaced too much equipment! I suggest to other contractors not to get on this treadmill! They give the business to you, and they can take it away just as fast. Contractors’ end up treating the warranty company like the customer, I never agreed with that. When the warranty company dumps you as a business for the next cheap service guy, then all you have left is the bad reputation.

AHS came with my home, and the evaporative cooler stopped working within 30 days of buying my home. The contractor said it was the cooling pads, which was not covered. The AHS contractor failed to answer my questions in a knowledgeable way, and I hired another contractor who stated the problem was the motor. For a fair price, he replaced the motor and pads. Motor replacement was specifically covered in the AHS warranty, but AHS continued to deny the claim. I got some good advice for sellers of homes: put up a $1500 escrow fund for the buyer when you sell a home (the typical maximum amount for home warranty companied) with appropriate terms and conditions for use of the funds for 6 months to 1 year after sale. Of course, fully disclose any work or replacement that needs to be done when you sell the house. That's a better deal all the way around than a home warranty company.

As a contractor, we have discontinued service for American Home Shield and Sensible Home Warranty because they do not pay in a timely manner if at all. At present, Sensible Home Warranty owes for invoices dating back to the beginning of March of this year. We had to personally visit AHS to collect money which was due us. I am sure this is one of the reasons (along with many, many others) reputable contractors will not work with most home warranty companies. At present, the one company which we will work with is Plus One. Customers should look on the internet before signing any warranty contracts.

I had AHS and have been struggling with their contractors to repair the AC for the past 75 days...The contractors didn't want to give you enough time and attention, were not well qualified and completely inconsiderate of your situation. I spent all month without air in 100 degree Georgia weather.. If I had invested the monthly premium that I've paid, I could have actually saved money on the repair. My experience recommends staying away from these contracts..

I was given American Home Shield by my realtor when I bought my condo. I renewed it for two years, but found it a waste of money. I needed a new oven, and they paid very little toward it. It was not worth the annual fee. My advice is to keep a list of useful phone numbers for service providers so that you have people to call when something breaks, and skip the huge AHS fee.

...Note that PSE&G is a service contract, not a home warranty. I think that's a big difference consumers need to be aware of... maybe what you need is a service contract instead of a "warranty" which implies insurance.

I use PSE&G Worry Free Service... only for big ticket items... Furnace/Air, Fridge, and leave the rest uninsured. I've used their service several times for furnace/central air problems and they always show up the same day or next day and have always fixed the issue with no service charge. In my old house, they replaced the circuit board on the HVAC unit twice in a year for no charge. Of course it would only die on the coldest day of the year... and they'd still come out and fix it same day. In my new house, they gave us a freon charge on the A/C for no service call charge or additional cost (up to 1 lb free... which was all we neeeded).

Are there any more reports available on America's Preferred Warranty?

I think the problem is, is that consumers do not read their contracts. Most warranty companies have options that add other coverage to the basic plan. Also, consumers don't have fair and reasonable expectations. When he weather is 95 degrees outside, don't people think that EVERYONE is calling in? The contractors that home warranty companies use are RETAIL companies. They also have their own business to service. If you didn't have a warranty on those days, you wouldn't get any faster service by calling someone out of the yellow pages. I think most of the complaints that show up about warranties is because people just don't read their contract and don't understand it. The best advice is to know your local representative. They are the one's that can step in and help resolve issues. Try it....you will be surprised.

My realtor did recommend the home warranty, which was $575 the first year with an option to renew. Once the seller and I had negotiated the price, I called the realtor and ask him to take of the warranty, lowering the home price by that amount. So, I'm the only one who's transaction was $355,475 or something. All in all, 11 months have passed and nothing has broken. But if it did, I'm sure it'd be way easier to take care of it on my own than deal with a firm that is structure to make money off what you pay them.

I had an Old Republic warranty on my current home that was provided by the seller. I had a problem with my AC on a particularly hot weekend in coastal Louisiana. I called OR, the customer service rep was very polite and arranged for a repair person to come out that day. The repair person was actually here within an hour but only because he was in the area already. Anyway, he was polite and performed the replacement with no problem. Reading the entries here I probably should have made more claims, but I didn't. Nonetheless, I decided not to renew figuring that a savings account is a better plan that will actually pay me in the long run.

I was very pleased to see your review of home warranty companies and the way they operate. When a hot water recirculating pump burned out in my home, my own horrendous experience with one of the biggest home warranty companies was quite a learning experience. Here is what I learned: 1. Service companies that work with these warranty companies may be inclined to find reasons that your problem is not covered. In my case, they blamed faulty original installation of the pump. I needed to confirm with the pump’s manufacturer and the county building inspector who inspected and approved the home – that it was correctly installed. 2. After months of back-and-forth communication with the warranty company, I filed a lawsuit in small claims court – which is very easy to do. I never even had to go to court. As soon as the suit was filed, then and only then did the warranty company settle for the entire claim plus legal costs. Seems they didn’t want to risk a judgment against them. 3. Finally, they made me sign a non-disclosure agreement, which is why you don’t see their name mentioned anywhere in this letter. Their game is to be stubborn and wait you out. In retrospect, I would give them a reasonable amount of time to respond and then jump immediately to the small claim, which you can file yourself at a very nominal charge. Just go online and download the forms for your jurisdiction.

I thought the article on home warranties was fairly useless. Your article didn't express any point of view. In fact, I got the sense you pulled your punches, in the hopes that more warranty companies would pay to become Angie's List reviewed. Here is a simple test to determine if a home warranty makes sense to you. Call your state insurance department and ask them what the loss ratio is for warranty coverage in your state. As an example, the industry average for after market auto warranties is 8%. That means for every dollar the warranty company collects from their clients, they pay out 8 cents on the dollar for claims. You can actually get better odds in Vegas. PS - could you make the message box just a little smaller? I find it distracting to see more than four words in a line. Is there a shortage of electrons on your website?

I just purchased American Residential Warranty, for $55 service call, i have yet to use the service, but would like more info about the best rated Home service Plan.

I received a home warranty when I bought my home from the estate of the previous owner. It proved valuable, since the previous owner had not kept up maintenance for some years. The warranty paid for replacement of the frozen main water shutoff, fixing an unsteady toilet and fixing a leaky tub drain fixture. That said, the quality of some of the work was not great. The toilet was unsteady because the tile floor on which it sat was uneven. The "fix" made was replacement of the wax sealing ring, which made the toilet steady for a few months but was not really a permanent fix. I ultimately set the toilet in a bed of grout to get a lasting fix. The second issue I had with the quality was that the "fix" for the tub leak would have left me with a $7 plastic drain in place of the original Eljer chrome-plated, solid brass, triplever pop-up bath drain (which would cost about $400 were it still available). Fortunately, I watched the plumber closely and stopped him when he uncased a reciprocating saw. Rather than go to the store to buy a replacement washer, he intended to simply destroy the fixture and put in a cheap plastic one which he already had in his truck. The servicepeople which the home warranty companies send out are the low bidders and they have little incentive to do what's best for the homeowner. The warranty company is really the client, not the homeowner. I think the fact that neither the ten home warranty companies contacted nor the National Home Service Contract Association chose to respond to Angie's List's interview requests speaks volumes about the character of the industry.

AHS is just bad. We had a policy with them for one year. That was enough! We made two service calls and got no satisfaction either time. We never renewed and they call us constantly!

THANK YOU EVERYONE who wrote of their bad experiences with AHS. I too have had a policy for five years, which I used only three times for very minor repairs. Made me go look at the policy and inspiration to cancel it as the renewal date is next week ! I could have used the $2000 for other things .... now I need to set up a special savings account to put the monthly payment into to save for when I need to pay for the next repair.

When I purchased my current home in 2007, I came with a warranty from American Home Shield (AHS). The dishwasher and garage door opener were dead when I moved in. In both cases, I opted to take a lowball cash option offer (about $150 each, including installation) to buy and install quality replacements instead of going with a “builder grade” (read: junk) replacement item provided by AHS. My AC system was another story: Pure Hell. Over two years, I had seven service calls due to system failure or water leaking from the condenser/blower unit in the attic. In every case, AHS’ service providers treated me like a second-class citizen. Although paying customers were able to receive same-day service, I usually had to wait 2-3 days for a tech to show up. In every case, the tech jury-rigged the AC so it worked and told me that (although AHS would not pay for a new system), my condenser/blower unit was bad and gave me an unsolicited “estimate” of between $4000-$6000 to replace the unit out of my own pocket. The final straw was when a tech “fixed” the unit by pulling burned wires and hooking up a Rube Goldberg system of external wires tied to an automotive fuse! I called a friend who is a certified AC tech in another state; he told me type of “repair” was a fire hazard waiting to happen! Given the risk, I had the blower/condenser unit replaced at my own expense and got into a screaming match with AHS that lasted three weeks, ending up with me hiring an attorney. Although I am prohibited from stating the exact settlement I received from AHS after threatening to sue, it fell far short of my actual replacement cost. The final irony is I never had the chance to contact AHS and tell them what bodily orifice they could stick their policy up. Immediately after my out of court settlement, they beat me to the punch by sending a notice that my policy would not be eligible for renewal.

AHS has been worthless for us, too. The main issue is time: when you need a repair, you're at their mercy, and they're in no hurry. We had a leak in our water heater that we discovered the night before we had to catch a plane for a week's vacation. AHS couldn't have cared less, and I had no choice but to hire my own man to do the repair the next morning. After I cancelled my policy, AHS phoned me a couple of times a week for about a year trying to get me to renew. No chance! I regret being stupid enough to insure depreciating assets such as home appliances. (That's like insuring the tires on your car.) Put the $400/yr. in a stable mutual fund - you'll be money ahead, and in control. The very concept of home warrantee is bogus, and they know it.

I signed up with Total Protect just last month. I have received mail about them for several years from my mortgage holder, Bank of America. I am located in Charlotte, NC. Has anyone in this area had any experience with Total Protect. (I signed up for the Total Protect Gold program. $49 per month; $75 service calls)

I bought a home last year and at the suggestion of my real estate agent purchased a home warranty plan with Old Republic. My agent said he used to suggest AHS but had found there were a lot of complaints. I thoroughly read the details so I knew when I had to make calls for service what was and what was not covered. Every one of my service calls were handled smoothly by OR and the contractors were knowledgeable and prompt in resolving the issue. I had my dishwasher repaired, my refrigerator/freezer repaired, some plumbing and electrical issues. Thank goodness for the Home Warranty plan and that Old Republic customer service was so good and their networked contractors seem to be of a higher caliber than is reported here in this article. I paid $375 for the plan and $75 for each service call. I think it was money well spent and am very satisfied!

We've had a HW with First American for many years now. The first year we had the policy, our furnace had a gas leak in the middle of the coldest week in over 50 years. They fixed it in two days! We've used it numerous times since then, for repairs to our dishwasher, clothes drier, a ceiling fan, garbage disposal, and more. We don't use it every year, but some years we've had 2 - 3 calls; I figure that we've probably broken even over the years.

I had a 1-year policy with American Home Shield (AHS) that came with the sale when I bought my renovated 1908 Craftsman home. I used their service twice to fix valves that had been installed backwards in the bathroom water fixtures. Other than that their service was a complete waste of $500/year. Each time I called about a problem having to do with faulty plumbing, electric, or faulty workmanship, AHS always found an excuse with the problem that disqualified it from their coverage plan. Each time I paid $60 for a plumber or electrician to come out only to tell me the problems were never covered by AHS. I decided to cancel the policy after 2 years but AHS made me pay for a 3rd year. Their services and policies are complete crap. Avoid them and go through your home owner's insurance or sock money away in an account earmarked for home maintenance & repairs.

I am a property manager for residential investment properties. I agree that people rarely get their money's worth from a home/service warranty. The vendors that my company uses provide better service and lower prices. My clients agree and those that have the home warranty let it expire and don't renew it; those that were considering this option never purchase one after I provide my opinion.

AHS was the worst investment we have ever made. The service was terrible and the cost was worse. Filing a claim was a nightmare. Now we use Angie's List to get reputable, good service!

After miserable results with the companies mentioned in these posts, last year I changed & now have Complete Appliance Protection. I researched all the best companies & found them to be the best and different in that there are no service fees I've had no problems nor calls yet, but those of you looking for something different could check them out.

Our house came with AHS warranty. I have kept it for over 10 years. I have learned to look up the companies they want to send out on Angie's list and any other site that rates companies. If I don't like the company they are going to send, I request another one on their list. Most times they have sent out OK to good repairmen. We did have one bad summer with an air conditioning problem. I had my maintenance people come out and tell me what was wrong,after a long problem with their company. When they sent out the new company, I was armed with info. and they paid the $900 repair. Ask for a supervisor and keep after them if you are not happy. Also, do look at what is covered before calling. So far, a few major repairs have made it worthwhile to keep the warranty.

I've had AHS basic warranties in the last 3 houses I've owned. There have been no problems with my current house but in Virginia Beach, the air conditioning seemed to need freon about every 6 months. The problem was that each time AHS was called, a different contractor was sent out. They all fixed the symptom, low freon, but didn't have the historical data to determine that I had a leak in the cooling system. A call to AHS to explain the problem resulted in a new contractor who did a complete system check. The contractor found the leak but the cost to replace the leaking component was almost as great as the cost of a total new system so AHS paid for a total replacement. All-in-all, I've been satisfied, but I read the fine print and know what I'm paying for. Most consumers do not, methinks.

I am glad new laws prevent what were kick backs to real estate agents for referals. I have been a seller and buyer and did not want a warranty. As seller I offered the buyer the money, as buyer I offered to take half the money, but in both cases the real estate agent pushed a sale on the other party with scare tactics and promises of peace of mind and no worries. End result - two policies sold.

Pages

Add comment

Deals
Anonymous reviews are Internet graffiti.  Angie's List has real reviews from real people.

What is Angie's List?

Angie’s List is the trusted site where more than 2 million households go to get ratings and reviews on everything from home repair to health care. Stop guessing when it comes to hiring! Check Angie’s List to find out who does the best work in town.

Local Discounts

Daily deals up to 70% off popular home improvement projects from top-rated contractors on Angie’s List!