Home Warranty - To renew, or not to renew?
I've been nibbling on this question for the past 3 weeks, and it seems that I still don't have a 100% sure answer on it ;) Mrs. Budgetsaresexy and I had already agreed that we should NOT renew it, thus letting the expiration date come and go, but they JUST sent us another friendly reminder - sneaky marketers!
It's hard because I usually go w/ my original instinct, which in this case says to renew it and have the peace of mind that comes along w/ warranties. But then the practical side kicks in and asks, "Will you actually recoup the costs?" I mean, it's a valid question and one to definitely consider for things like this.
Last year it costs us $360, and we used it once for our leaky ceiling ordeal. While we tried to use it another time when our dryer went bonkers, we didn't, and all in all we ended up spending a total of $460 (warranty itself + $100 deductible) for this one plumbing issue. Now, i'm not sure how much the actual costs would have been w/out the warranty, but i seriously doubt it would have come close. All they really put in was some new rubbery stopper thingie and told us what to watch for.
This year the warranty renews at $465! Same deductibles, and same coverage (quoted from their site):
With the wedding coming up, and w/ sites out there like Craigslist & ebay to pick up new appliances, we have decided to pass (again) and keep this money in our Emergency Fund.
What would you guys do, though? Does anyone else use a home warranty of any sort? I'd be interested to see how others handle this little ditty...and unless we change our minds at the last second, fingers crossed that it all works out!
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It's hard because I usually go w/ my original instinct, which in this case says to renew it and have the peace of mind that comes along w/ warranties. But then the practical side kicks in and asks, "Will you actually recoup the costs?" I mean, it's a valid question and one to definitely consider for things like this.
Last year it costs us $360, and we used it once for our leaky ceiling ordeal. While we tried to use it another time when our dryer went bonkers, we didn't, and all in all we ended up spending a total of $460 (warranty itself + $100 deductible) for this one plumbing issue. Now, i'm not sure how much the actual costs would have been w/out the warranty, but i seriously doubt it would have come close. All they really put in was some new rubbery stopper thingie and told us what to watch for.
This year the warranty renews at $465! Same deductibles, and same coverage (quoted from their site):
"breakdowns in major systems like plumbing, electrical, heating and airSo what's a brother to do, right? If 3 things happen (or 1 major thing), we're pretty much covered. But realistically we'd be spending money "in hopes" something happens, and then shelling out another $100 each time it DOES. I dunno, it really just gives me a headache thinking of it all ;)
conditioning as well as washer, dryer, oven, refrigerator and other items."
With the wedding coming up, and w/ sites out there like Craigslist & ebay to pick up new appliances, we have decided to pass (again) and keep this money in our Emergency Fund.
What would you guys do, though? Does anyone else use a home warranty of any sort? I'd be interested to see how others handle this little ditty...and unless we change our minds at the last second, fingers crossed that it all works out!
Labels: home ownership, warranties
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posted by J. Money at
1:20 PM
3 Comments:
Personally, I wouldn't. But I also keep a sizeable emergency fund just in case. My thinking on warranties is that they're great when something is new. First year, first three years, whatever the standard offer is. But after that, the price is just going to go up. Why? Because things wear out. Things break. And the warranty providers know this, so they're going to jack up their prices so that they cover themselves overall.
(Of course, this depends on the degree of the warranty - for example, I will always pay for Dell's 3 year extended warranty because when I drop my laptop, they come to my house and fix it, no questions asked - not that this is something I've done of course.)
Yes, there's a chance that something disasterous could happen. But I think it's a better bet that you'll be fine.
good points - esp. since you're on the side we chose ;) i think you're right though, pumping up the emergency fund for this sorta stuff may be the way to go.
I have been thinking about the same thing. I had a problem a few months ago with my rental property and the warranty company said that it was a prior issue and denied the claim. I ended up paying over $2k out of pocket. I don't think I will be renewing it because they really haven't done anything.
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