The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Beach_Stache on June 28, 2015, 07:38:39 AM
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Hi,
I wanted to know what you all thought about home warranty's for appliances? When we moved and started renting out our condo we got an appliance warranty on both our new house that we live in and our rental condo. The costs are $560/year for the home and $504/year for the condo, with a $75 service fee each time a technician has to come to the house. The main reason we got it is that we live 3.5 hours from our condo and it makes if easier if they can just call in a ticket and have someone come. Every once in a while there are things that are "not covered" under the contract that we have to pay extra. We have done it for 2 years and only needed help 2 times on our house so we've lost money there, but all of our appliances area really old which worries us. So I would rather be out a bit than have to replace lots of stuff. For the condo the appliances are fairly new but our renters do not appear to be treating the house as their own so they have had a lot of service calls.
Everything has been okay so far but lately the contractors they have used are terrible. The AC unit has been giving problems for the last 2 months and they have delayed and delayed, used terrible contractors that don't fix the problems and it's been a nightmare. I don't know if we just go a-la-cart and call someone specific for each issue that maybe has a good reputation, as the last few contractors seem to only do enough to keep things running for a month or so and then the same problem. I just don't want to be out thousands of dollars for a new AC unit or some other issue b/c the tenants are not taking care of our place. I also worry that our old appliances in our new house will start to become a problem. We take pretty good care of the house and don't let the AC and heat run all the time.
Anyone have any suggestions as to whether we scrap the whole home warranty thing or if we re-sign a new contractor (we have about 20 days left on our current contracts).
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Generally those things result in you paying the insurer more than the insurer pays out. That's why they make money. I would only get one if I couldn't self-insure. But I can (and do). Your situation may be different than mine.
You're also seeing one of the downsides. They will do the cheapest repair possible (and not replace a unit if they can avoid it), and not maximize your utility over the long run.