By S. Alease Ferguson

Depending on who you talk to, home warranty packages are a mixed bag. Annually, millions of consumers enroll with these companies hoping that they will save thousands of dollars.

According to Best Home Warranty Companies 2021 Warranty Guide, U.S. News: A home warranty works by providing you with “a simple route for having an appliance or system in your home repaired or replaced. www.usnews.com/360-reviews/home-warranty.

Like an insurance policy, home warranty policies charge you a regular fee (usually an annual cost broken down into monthly payments) for coverage. Some people view these packages as outstanding, and others will tell you it is a bad bet.

Six months ago, Southeast side resident Rhonda subscribed to a home warranty service and now she is displeased. “I thought I was making a smart move to save money and get the jump on any major appliance or systems problems that could crop up unexpectedly,” said Rhonda. “It made sense because you are solely responsible for maintenance concerning your home as a property owner, and it is all on you! Sadly, these repairs always come at a time where other crises are going on or when there is no money on hand.”

Sandy Barnes recalled “feeling deceived by her home warranty company.” She reported, “I called my home warranty company for service and had to have them come out to repair my refrigerator five times before replacing the item. I get why they did all they could to remedy the problem, but it took the inconveniences of being off work seven times as they missed two visits. Also, they did everything not to give me the satisfaction of replacing a well-maintained fridge and replacement was a last resort.”

The Ohio Attorney General’s Office indicates that Sandy and Rhonda are not alone. What You Should Know About Warranties and Service Contracts – Ohio Attorney General Dave Yost

The Run Around

Initially, Rhonda and Sandy’s subscriptions to these services made sense. Home appliances or systems do go on the blink periodically, and why not save a few pennies? These problems can run the gamut from parts replacement to total system breakdowns requiring the replacement of a stove, refrigerator, furnace, air conditioning unit, or total roof replacement. A series of hard-learned lessons came from Rhonda’s experience. Here is more of her tale of woe:

  • On October 26, Rhonda went home and had no heat. She needed help immediately and called her home warranty company to report the problem. The company’s dispatcher indicated that someone would be out the next day to see about the issue.
  • October 27, Rhonda called her regular HVAC man, and he diagnosed the problem as a defective ignitor. He said the cost of service would be around $700. He also indicated that he could get the replacement part the next morning and replace the part.
  • On October 27, she called the Home Warranty company, and they promised to send an HVAC specialist the following day.
  • October 28, the home warranty company’s HVAC person made a service call costing $75, diagnosed the problem, was paid in cash, and submitted the claim to the home warranty company. The diagnostician noted that she would be responsible for scheduling the repair visit. On her follow-up call, the worker told her that someone would be out to make the diagnosis and file the claim. Rhonda explained that the claim had already been filed and that all she needed was a scheduled repair. In turn the woman replied, “I am not seeing that on our system.”
  • October 29 to November 3, the company met her repeated SOS calls with responses such as “we have you down for a service,” and “the first step is to get the diagnosis and claim. That cannot happen until November 15 at 1 p.m.”
  • November 4, the company finally reported that a technician would arrive the following day between 1-4 p.m.
  • November 5, the repair person was a no- show. From 4:30 p.m. to 5 p.m., no one answered the phone at the company, and no one ever picked up the phone.
  • November 6, she was forced to pay her HVAC person to make the repairs.

In the end, she filed a complaint with the State of Ohio Attorney General’s Office, the Better Business Bureau in Ohio, and in the company’s home state of New Jersey. She also contacted the company to dissolve the contract and ask for a refund. By mid-month she had all the paperwork filed.

Practical Advice

Home warranties do offer security, but you have to read the fine print. These contracts can be both complicated and limited.

In the article Are Home Warranties Worth It? Here is a List of Pros and Cons! Better Homes & Gardens advises:

  • When your appliances are new and already have warranties, do not invest in additional contracts.
  • If your home is newly built, it may also have a one-year warranty for appliances and systems. If your home already has warranties in place, do not invest in additional home warranties.
  • Make sure that you secure a home warranty that best compliments your homeowner’s insurance. The two policies should never overlap or cover similar components.
  • Home Warranties only cover appliances and systems that are not well maintained.
  • Know what is covered, and read the fine print before signing.

Home Warranties are good when first buying a home because you don’t know what you’re getting. Try it out for a year or two, and see how the appliances work, and cancel it later.  Finally, thoroughly research the field to choose a highly rated company and a plan with the right coverage for your needs. Avoid plans requiring paying for repairs out-of-pocket and a warranty that does not serve your specific needs.

Are Home Warranties Worth It? Here Is a List of the Pros and Cons | Better Homes & Gardens (bhg.com)