How to avoid worthless home warranties

Don't Waste Your Money

Every spring, thousands of Tri-State homeowners buy or renew home warranties to protect themselves against costly repairs.

But are all warranties worth the money?

Delhi Township residents Joe and Leslie Ruhe said they didn't want any surprises when they bought a 25-year-old house, so they purchased a $400 home warranty.

But when their furnace went out just months after they moved in, they faced problems paying for the repairs.

Leslie said she was told her gas valves were excluded by the warranty they purchased.

Later, when the home’s garage door opener went out, the warranty company told the couple it also wouldn't cover that.

"They denied it based on the fact it was a power surge," Leslie said.

After the couple said they provided evidence it wasn’t a power surge, they were told the repairs still wouldn’t be covered.

"The last straw was when we called about the garage door, and he told us it was going to be denied because it was a pre existing condition,” Leslie said.

The broken furnace, the faulty garage door opener and a busted kitchen disposal all ended up costing the couple $1,143.

Our partners at the Better Business Bureau (BBB) suggest consumers who are interested in purchasing a home warranty take the following cautionary steps before signing on the dotted line:

  • Verify the warranty company's track record. Find out whether it's a local or national firm and how long it's been in business. Contact the BBB to find trustworthy businesses.
  • Do some comparison shopping. Most policies cost between $300 and $395. But not all offer the same benefits. You may find some of the lower-priced policies charge extra for coverage of water wells and some appliances, such as washing machines and dryers.
  • Consider the deductible. The industry average is $50 to $100 per claim. But some companies charge as much as $150 per call.
  • Ask the company who will perform the repairs. Most warranty companies have their own network of service contractors. But some do allow you to hire a contractor of your choice. Be sure you understand the company policy before you buy the service.
  • Get a detailed, impartial inspection of the house. This should be done regardless of whether you receive a home warranty. The inspection will alert you to any pre-existing problems, which may not be covered by the warranty.
  • Call the warranty company before you buy a policy. Ask questions, clarify coverage and most importantly, see how the customer service representatives treat you. If they don't respond promptly and courteously before you buy a policy, odds are they won't be very helpful after the sale.
  • Read the contract thoroughly. Make sure you fully understand what is or isn't covered.

Do your research, so that way you don’t waste your money.


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