Are home warranties worth the money? Here’s what Clark Howard says

ATLANTA — For most people buying a home is the biggest purchase they’ll ever make. Channel 2 consumer adviser Clark Howard said you might be tempted to insure it against things breaking, that may not be the best use of your money.

“I say keep the $500 or so in your pocket to pay for a repair when you need it,” Howard said.

Anita Burnes bought her home warranty from Choice Home Warranty in 2017. She told Channel 2 she paid just over $2,400 and thought she’d be covered.

“Total Home plan would mean my whole home was protected. You know,” she said.

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When her AC stopped working this summer, she was shocked to find out CHW denied her claim.

“They turned down my request for the repair because they said that there are acidic particles in the air that damaged my air conditioner,” she said.

Burnes paid $6,500 out of her own pocket for the replacement.

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In a letter denying her claim CHW told Burnes that the condensate pump on her unit was also broken and it too was not covered by her warranty.

CHW told Channel 2 in a statement, “”Choice Home Warranty is committed to providing excellent service and value to our customers. Since its founding, Choice Home Warranty has responded to more than 4 million service requests on behalf of our customers and covered more than 1 million homes across the country. While we regret to hear of Ms. Burnes’s frustration, the claim was handled in accordance with the terms and conditions of her home warranty service contract, which comprehensively sets forth the scope of coverage, and include a specific exclusion for rust and corrosion. Although the claim was handled properly, in the interests of goodwill, we contacted Ms. Burnes to discuss her claim and attempt to resolve her issue. Ms. Burnes declined CHW’s offer. Should Ms. Burnes change her mind and wish to accept, she can reach out to CHW.”

Rodney Smith owns A-Team Services in Marietta. He told Channel 2 condensate pumps are rarely covered. He said warranty companies only cover the features that help the unit run.

“Almost every customer I go to for a home warranty is frustrated with the Home Warranty,” Smith said much of that frustration stems from not reading the contract thoroughly, there’s lots of details in there that they’re not going to cover acts of God. They’re only going to cover all the mechanical components.”

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Smith said regular maintenance is key to keeping your warranty valid.

Howard said there’s only one instance when he recommends buying a home warranty.

“When you’re putting your home up for sale, it gives assurance to a buyer that they’re not gonna have to worry about things,” Howard said.