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Old 05-14-2011, 01:03 AM   #1
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Who owns a Home Warranty Service?


This seemed off topic so I posted it here and I was surprised I couldn't find a thread regarding home warranties on this site. Lets correct that and voice your opinion.

My friend's house came with a year warranty from Home Security of America HSA. She used it once to fix some flashing and was not blown away by the response or service (Took weeks to return call, roofer took three attempts to complete job and it's not clear if anything was actually accomplished since the leak just moved from one area to another.) Now it is time to renew the service for $610 (basic plan) a year plus $100 deductible for any service call. It is a smart buy?

My blood pressure goes up when I examine the details of these blanket warranties because something in my gut tells me Insurance companies are controlling too many things right now and it basically turn minimum wage call service operators into unseen contractors. It all seems very shady. Am I wrong?

I see a banner ad for American Home Shield warranty service on this site and wonder if anyone owns one of these services.

I figure it's all about cost benefit analysis and are the AC system and furnace worth $600 a year to insure and will they be covered if they break? The reviews of HSA border on criminal accusations so it looks like she'll pass on a renewal but I wonder if there are opinions of the benefits of these services from other home owners.


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Old 05-14-2011, 07:26 AM   #2
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Who owns a Home Warranty Service?


I'm going to respond in general terms since I group all extended warranties in the same bucket. I never buy the extended insurance on anything I buy. In my opinion, these policies are in force during the time nothing goes wrong, and get very expensive the older the object gets. Also the requirements you need to perform, the "hoops you need to jump through", and the hassle you go through insure very few people will ever get close to their investment back. Consumer Reports never recommends getting these expensive extended warranties. Even tires have them when you pay for Road Hazard" protection. Its just a insurance policy the installer has than pays if you have a flat.

Just my general run of the mill opinion. Everyone is different, and that is what makes this world such an amazing place in which to live. I guess it can be summarized this way. Will spending money on a extended warranty really make you sleep better at night? If the answer is yes, then go ahead and buy it.

Good luck and be safe

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Old 05-14-2011, 01:53 PM   #3
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Who owns a Home Warranty Service?


My wife's cousin is a real estate agent. She handles mostly high end homes. Her comment to us this weekend was that if she cannot negotiate a Home Warranty policy into one of her sales, she almost always goes ahead and buys the policy herself for one year. She feels they are that valuable.

Me, I dunno. Just repeating what she said.
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Old 05-15-2011, 09:15 AM   #4
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Who owns a Home Warranty Service?


We got a warranty from our real estate agent when we bought good for 1 year. We did not renew. The decision, like most things, is not a rule of thumb or blanket response - its based on your personal situation.

How we evaluated was this:
1) Age / condition of appliances in the home: a big attraction is the appliance replacement.. HVAC systems, wash/dryer, etc... if all is in good shape and relatively "healthy", that lessens your need for insurance (essentially, that's how to view the warranty). Something to note... the warranty doesn't buy you a "new" washer, for example. It will pay you what the washing machine is worth.. so if yours is 15 years old... not much.

2) Your personal financial situation.. do you have cash/lines of credit at reasonable rates to tap in an emergency, or when something unexpected pops up? The more you can "self insure" - the better... in your example of the roof... let's say the repairs cost $5,000. At $600/yr for the insurance... do the math. How often is that going to happen? Also, you mention the deductible... that factors into smaller things, like relatively small plumbing issues, smaller appliances, etc.

3) You also mentioned the workmanship/service... I called our warranty service in our complimentary first year about the HVAC system... they sent a hack out, I didn't trust a word he said.

I did a lot of research into this (probably too much hahah ), and I came to the decision that was right for us. Hope this helps a bit to allow you to further flush out your best options.
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Old 05-15-2011, 04:53 PM   #5
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Who owns a Home Warranty Service?


I don't see the point. If something bad happens, that's what home insurance is for. Instead of paying a company monthly, save money on the side monthly in case you need it for an emergency repair that is not worthy of involving insurance or not covered.
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Old 05-15-2011, 05:00 PM   #6
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save money on the side monthly
Like THAT's ever going to happen!!!

Not around HERE anyways!

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Old 05-15-2011, 05:04 PM   #7
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Who owns a Home Warranty Service?


True, I can't say that I've been doing it much. I have about 300 dollars in my savings account. LOL.
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Old 05-15-2011, 05:09 PM   #8
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Wanna loan me $300.00?

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Old 05-15-2011, 09:01 PM   #9
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Who owns a Home Warranty Service?


It's a gray area and I don't think gray areas should involve green bills so it's frustrating. I guess what makes me think it is super shady is that no representative from HSA or AHS is going to come to the house personally, inspect everything and tell you exactly what your $600 is going to insure. That would solve so much confusion and help these companies avoid the horrible reviews they get. I want to know exactly what part of this 20 year old AC unit they will replace. The furnace? Plumbing? I don't want a cookie cutter contract that can easily be ignored by the service tech. The call operator will repeatedly refer to the contract as though that is the final word but no one has ever inspected the house and appliances! Without a pre inspection (to identify pre existing conditions prior to an agreement) the agreement itself has no merit for either side. Who would blindly insure a property without inspecting it? A company that knows it will never lose money on the deal.
This house was empty when they insured it to sell. Now it is full but they pretend to insure the appliances? How? How can they insure this dryer without ever seeing it?
The insuring company has no clear idea what they are insuring and the home owner has to hope their property falls into the category that will be insured. There should never be this kind of breakdown in communication when $600 a year is concerned. no way. That alone makes me think HSA has stacked the deck in their favor to make money from first year sales. It seems the majority of contracts are from home sellers leaving their house and leaving behind a flimsy insurance policy for the fake benefit of the buyer. It's like paying $600 to pretend there is peace of mind but HSA is betting that in one year nothing will go seriously wrong. That's a great bet considering they can always point to age and pre existing conditions to avoid costly repairs.
This house is 80 years old and the replacement value of the appliances is very low. They might credit $200 toward a $2000 ac unit. But I might pay $1200 to get that $200. Terrible return since that means the $2000 unit really cost $3000.
This really is a consumer affairs failure in my opinion. It's predatory and probably hurts legitimate repair companies more than it helps them. My blood pressure is going up.
I don't think there is any substitute for knowing tradesmen and paying them directly for their service.
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Old 05-15-2011, 09:58 PM   #10
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Who owns a Home Warranty Service?


When we bought this house in '97, it came with a 1 year warranty. We paid for a second year when the first year was almost over.

In that time, they paid to replace the sump pump, water heater, refrigerator, stove and if I remember right, repairs on the furnace and central air.

I think they gave us something like $500 for the stove and the same for the fridge. We bought appliances that cost a little more and paid the balance out of our pocket.

With that being said, I don't think I would pay extra for a policy if I were to buy another house. Mostly because of what I hear everyone else say about those insurance companies.
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Old 05-15-2011, 10:00 PM   #11
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Who owns a Home Warranty Service?


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Originally Posted by Red Squirrel View Post
I don't see the point. If something bad happens, that's what home insurance is for. Instead of paying a company monthly, save money on the side monthly in case you need it for an emergency repair that is not worthy of involving insurance or not covered.
Here's an answer to that question from the site my wife's cousin thinks so highly of.

Old Republic Home Protection's one-year home warranty covers items not covered under your standard homeowner policy - filling a critical gap in the protection of your home. For example, if your dishwasher leaks and water damages the floor, your homeowner's insurance policy may cover the damage to the floor, but not the repair or replacement of the dishwasher. With an Old Republic Home Warranty, your dishwasher is covered!
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Old 05-16-2011, 05:32 PM   #12
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Who owns a Home Warranty Service?


I'll add that I've had a home warranty since I bought my house and have gotten my money's worth every year so far. But I'm in a really old house with really old equipment, so when I've had failures, I pay $60 for the service charge and then all the parts and labor are covered from there. Each service call has been more expensive than the warranty cost is for the year so far.

Of course once everything covered by the warranty is replaced in my house, I might rethink it, but like I said, everything is old right now!
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Old 05-16-2011, 07:51 PM   #13
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I do get a chuckle from reading of people who seem to get upset that the insurance companies hope (bet) to make money in the long run. Do you honestly think that they sat down and, after calculating a probable continuing loss factor, said, "Oh hell, let's do it anyway." "So what if we can't make any money doing this."

Many of us will gleefully go to Vegas with high hopes of being big winners, and the odds are stacked against us far higher than they are with insurance scenarios.

They're in business. They want and need to turn a profit. Why be mad at them if they are being pretty straightforward about what they cover and what they don't?
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Old 05-17-2011, 08:45 AM   #14
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I do get a chuckle from reading of people who seem to get upset that the insurance companies hope (bet) to make money in the long run. Do you honestly think that they sat down and, after calculating a probable continuing loss factor, said, "Oh hell, let's do it anyway." "So what if we can't make any money doing this."

Many of us will gleefully go to Vegas with high hopes of being big winners, and the odds are stacked against us far higher than they are with insurance scenarios.

They're in business. They want and need to turn a profit. Why be mad at them if they are being pretty straightforward about what they cover and what they don't?
Yep - so the decision comes down to personal risk tolerance... I once heard someone say they wasted all their money on their term life insurance premiums after 20 years, it went away and all that money down the drain....
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Old 05-18-2011, 02:24 AM   #15
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Many of us will gleefully go to Vegas with high hopes of being big winners, and the odds are stacked against us far higher than they are with insurance scenarios.
I disagree with this comparison. Vegas offers entertainment in exchange for your losses. Insurance companies act as dealers in high stakes poker games where you don't get to see your cards or your opponents and only the dealer gets to tell you if you win. But it will cost you money either way. I guess we're so used to getting robbed it has become accepted practice.

They seem predatory to me and have proven predatory to many unhappy customers. I can see some people have benefited from the service so they've proven they have some function but if they managed their affairs so there was zero confusion then they'd probably go out of business. Secrecy is built into their game and they make money not through good business but by cutting corners. I'm sure their board of directors has conversations like, "For every person we help we have to screw over two dozen. Agreed?" The HSA web page is so thin on facts it's a joke.

You get what you pay for but their contract is so flimsy I couldn't start a fire with it.

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