Are Home Warranty's Worth the Money?

5/15/2014 (Permalink)

Many people believe the only good thing about owning a home warranty is that it might help sell your home, but if you're not moving, their protections are limited.

Typically, warranty companies are difficult to deal with. Most require you to use their contractor only; rendering the warranty company only as good as authorized contractors. If the company partners with unlicensed contractors, or contractors with poor Better Business Bureau histories, you could have a mess on your hands. That is, if they even show up.

Consider an alternative: set aside $50 a month in a repair fund. Tap into it instead of a $400 to $600 annual warranty when major things start to fall apart. 

Like anything else, you should shop several types of home warranties. Compare the costs, histories and reputations, especially the deductibles and rates-of-response.  But also compare them to the cost of starting your own repair fund -- and to the cost of a solid termite contract that includes a repair guarantee.