Reddit is a gold mine of information about home warranties and customer experiences, and something you can always find in subreddits is others' opinions and experiences.
Take a scroll through any subreddit about homeownership and you’ll find posts about home warranties. A few talk about how they save homeowners money, but most complain about denied claims and overpriced coverage.
I scanned Reddit threads to find unclear and debatable comments about home warranties. Here’s what Reddit comments don’t always clarify and the realities behind seven home warranty comments.
What Reddit says: Home warranties protect your home
Reality: They’re for repairs, not protection.
Home warranties don’t protect your home despite what they say in their advertisements. They don’t shield your appliances or guard your systems.
Home warranties help pay for specific repairs after things start to malfunction. In some cases, they also pay to replace items they can’t repair. And because there are a lot of reasons a home warranty company can deny your claim, coverage is never guaranteed. If a sales person tells you otherwise, move on to a different company.
If you want to protect your home, you’ll need to maintain your appliances and systems, and get ahead of issues before they happen.
What Reddit says: Home warranties are a scam
Reality: They’re service contracts with strict rules.
Home warranties are not scams. They do have a lot of exclusions that keep them from paying every repair claim, but these policies are usually written in their contracts.
The way most home warranties work can make some customers feel like a company isn’t holding up its end of the bargain. For example, most plans require you to pay a service fee before you know if your claim is approved. And you usually don’t get the money back if your claim is denied.
It might feel unfair to pay $100 just to have a claim denied, but customers agree to these terms when they sign up for a plan.
There are some actual scams where companies pretend to offer home warranties, but they don’t involve real home warranties.
What Reddit says: Home warranties save homeowners a lot of money
Reality: How much money you save depends on your situation.
Some homeowners have saved money with their home warranties. Your situation decides if you save or lose money with a home warranty.
For example, filing claims for only issues that you know your home warranty plan covers will keep you from paying service fees for claims that never had a chance of being approved.
The plan you choose can also affect how much you save or lose with a home warranty. Purchasing a plan that covers systems or appliances that are newer and unlikely to have issues soon means you’re paying for coverage that you probably won’t use.
If you’re on the fence, I can help you decide if it’s worth getting a home warranty.
What Reddit says: They don’t cover anything
Reality: They have a lot of exclusions but do cover some repairs.
Yes, home warranties do refuse to repair items for a lot of reasons. Home warranties are designed to cover only everyday wear and tear. So it’s unlikely they’ll cover many issues outside of that.
That said, I’ve read customer reviews that say some home warranties deny claims by saying damage is from an uncovered cause. This lets companies avoid paying for repairs that the contract says are otherwise covered.
What Reddit says: You can pay a service fee and still not get a repair
Reality: Yes, a home warranty can deny your claim even if you paid a service fee.
Think of a service fee like a callout fee when you hire a repair company on your own. You usually have to pay a fee for the repair company to come to your home and inspect your appliance or system.
The difference is that a repair company’s callout fee can often be used toward the total cost if you hire that company to make a repair. A home warranty usually doesn’t apply your service fee to other costs; it’s a fee you pay for each claim on top of your monthly fee.
What Reddit says: Read the contract instead of the marketing material
Reality: You should definitely read the contract beforehand.
Home warranty providers use marketing language in their advertisements, social media posts and websites, like most companies. And customer reviews say their sales representatives aren’t always honest about coverage.
Don’t rely on someone who might make extra money by selling you a home warranty to tell you everything you need to know about your plan.
The best way to ensure you know what you’re paying for is to read the entire contract in advance.
What Reddit says: Set up a savings account instead
Reality: Yep, this is an option you should consider.
Home warranties don’t cover everything. So there’s a chance that you’ll pay a monthly fee and service fee and still have to pay the full repair cost. An alternative to a home warranty is opening a high-yield savings account, which usually has a higher interest rate than other types of savings accounts.
To get the most out of this option, you’ll need to deposit money into the account each month, just like you would pay for a home warranty monthly fee. This will help your account balance grow along with the interest you’ll earn. You’ll also benefit more by dedicating the account solely to appliance and system repairs to ensure the money is there when you need it.
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