If you want peace of mind in your home, a home warranty sounds like a smart move.
It protects you from the high cost of major repairs -- such as furnace or water heater failure -- for just a few dollars a month.
But for some homeowners, that peace of mind vanishes the first time they try to use it.
Spent $400, then tried to collect
Joe and Leslie Ruhe didn't want any surprises when they bought a 25-year-old house. So they spent $400 on a home warranty.
But when the furnace went out soon after they moved in, Joe Ruhe says "they wouldn't cover it. They didn't cover the valve, they excluded it."
Indeed, in the fine print, it turns out gas valves were excluded by their warranty.
Then when their garage door opener went out, the warranty company wouldn't cover that either.
"We tried to," Leslie Ruhe said. "But they denied it based on the fact it was caused by a power surge."
Once they showed there was no evidence of a power surge or power failure that day, she says, "that time it was denied because they said it was still under warranty. But it wasn't."
So they filed another claim. But she said,"the last straw was this week, when we called about the garage door again, and he told us it was going to be denied because it was a pre existing condition."
Between the furnace, the garage door opener, and a failed kitchen disposal that was also denied, the Ruhe's ended up paying and paying and paying.
"$335 for a garage door, $473 for the furnace, another $140 for the furnace they wouldn't cover, then the disposal...." Joe Ruhe said, as he added the numbers up on a calculator
Total they have paid in repairs, including several $100 service calls to look at the problems: $1,143.
Don't let this happen to you
The Better Business Bureau reminds home buyers to:
Check a company's rating at the BBB. Some warranty companies get an A, while others receive a C or F due to too many complaints.
Find out what's excluded. If it excludes plumbing leaks and stopped drains, for instance, you may want to take a pass.
Find out what qualifies as a pre-existing condition. Some companies will not repair a 20-year-old air conditioner or furnace when it goes out, claiming its useful life is over, and that its failure was a pre-existing condition when you bought the home. Do not assume a warranty will give you a new furnace, A/C, or water heater.
And find out if you can use your own contractor, or have to wait for theirs. In those cases, you may have to wait three or four days before their man can schedule you.
The bottom line
If you are going to have to pay for most repairs, buying a home warranty is not worth it.
If it comes free with your new home, any warranty is worth having. But if you're considering buying a home warranty out of pocket, search online for reviews and complaints before you buy it.
Some get good reviews, others, not so much. And even with the best of them, read the rules closely, so you don't waste your money.
Note: We are not naming the warranty company at this point, because we are giving them a week to respond to our calls and e-mails. If they fail to respond at that point, we will name them when we update our report.
Don't Waste Your Money is a registered trademark of the EW Scripps Co.