Ask Andy: Home warranties - WMC Action News 5 - Memphis, Tennessee

Reported by Andy Wise

Ask Andy: Home warranties

Home warranties are a waste of money.

There.  I said it, and I mean it.

It's almost time for "Gloria" of Germantown, TN, to renew her home warranty:

"It's not cheap (about $500.00 a year) and I have only had to use it twice. Each time the work that was done would have been equal to the entire annual premium so it would seem that this would be a "good deal" but something tells me that it's a scam."

A home warranty is not a scam, but it is certainly not a "good deal," either.

First, home warranties are ONLY AS GOOD AS THEIR CONTRACTORS. I have investigated cases where consumers have tried to use their home warranties for repairs that were clearly covered under their warranties, but the warranty company couldn't get a single one of its sub-contractors to do the job. The contractors simply refused to do it -- too hard, too hot, too busy, whatever the excuse.

There are usually TOO MANY LIMITATIONS AND EXCLUSIONS. I covered a case once where the warranty company refused to fix an air conditioning problem -- again, covered under the warranty -- because the unit was "out in the elements."

Hello?!  Every home's condensing unit is outside!  Totally bogus.

You have to pay SERVICE CALL FEES each time they show up on top of the $300 to $500 you blow on the warranty itself.

Consumer advocate Clark Howard ( says the only time you should ever consider buying a home warranty is as an INCENTIVE TO SELL THE HOUSE.

If you're selling the house, a home warranty might entice a buyer who's looking for the assurance that most repairs will be covered at no cost, at least for the first year.

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