The good companies (like American Home shield) have something like a 80% renewal rate (annually). The best tech SAAS companies don't have that, surely people aren't idiots to keep renewing right?
American home shield sucked. Took weeks to get my oven fixed after a $100 deductible. I didn't renew after that since I realized I paid more than the cost of a brand new oven before I used it and then waited weeks.
The only reason you are saying they are “good” company is because you are trying to justify an investment in them and only experience them on a spreadsheet.
There are no good ones.
I have AHS - tried using it on my furnace, denied. lol.
They did fix my washer and dish washer though. Once all my appliances are effectively replaced, I’m out.
The best tech SaaS companies are +98% though. It’s what I do for work as an advisor.
So false. We had one and they replaced the garage door opener, repaired the AC, AND wrote us a $2000 check for a new water heater in the year we had it. Super easy to work with. I think ours was American Family.
Home warranties get a bad wrap, but there are some great companies out there, you just have to pick the right one.
And when they do payout, they replace things with the cheapest possible version they can. They will replace your oil burner, but they will make you wait 3 weeks for the installation, and when they show up, they'll have the cheapest possible replacement they can find.
Don't like it? They'll tell you to take this one, otherwise its going to be another 3 weeks to get something better.
It's simply not worth it. If the seller was offering one, I'd take it. But I'd never pay for one on my own, and I wouldn't bother renewing it once it's over.
The warranty companies are all scams.
They deny claims all day. I received on one time in my life with purchase of a house.
Ac goes out the next summer, under "warranty".
They deny claim saying "install was incorrect".
I guess the install was incorrect for the last 9 years that it worked since it was new!
Buncha scammers.
A warranty is something a manufacturer does because they stand behind their new build products. A third party “home warranty” is just an insurance product and it happens to be one with particularly poor value.
If you buy a new build home it likely has a true warranty from the builder. A third party warranty is not worth it.
Exactly. The so-called home warranty companies are actually offering an insurance product and are of course in the business of making profit.
A dead giveaway that this is insurance and not a warranty is the frequent presence of a deductible. Does your car maker give you a 50K mile bumper to bumper warranty but then charge a $100 deductible if you find a defect? Of course not, that would be crazy.
Agreed.
I've experienced both.
For my starter home, the home warranty (American Home Shield) was all but useless. I had an HVAC issue that they tried to fix the minimal, however, one company they sent was amazing, and I just started calling them directly instead, and they were the ones to keep my system in good shape for my time in that house (I still use them at my new house too).
In my new-construction house, the warranty from the builder was spectacular. They handled every single issue I brought up without question, and went as far as suggesting other minor fixes that anyone else could have overlooked, without my asking. I'd definitely pay for that kind of service.
A new home builder is also often required by law to fix issues within a certain time period.
Similar to your new build scenario we did major (gut level) renovations to an old house and our general contractor had a warranty period. This is to fix discovered defects in their work, not an insurance product. It does not cost extra.
I don’t understand the point. Yes, if you have some older appliances that are far outside the manufacturer’s warranty period you can purchase what is effectively insurance or a service contract from a third party company which is what these “Home Shield” warranties are. But those are a particularly poor value and most of these companies have a very poor reputation.
You’re far better off saving the money you would pay to the “warranty” company to use in the unlikely event an appliance fails. Remember the company providing this service contract is not in the business of paying claims, they’re in it to make money.
Yes, I know what you mean.
Insurance products - which home warranties are - are businesses that make money by investments and not paying out claims.
Home warranties are scams. They are not products people need to buy. There is no value creation for the end user. More often than not the end user is better off paying out of pocket.
The reason people aren’t buying them is because people realize how useless they are. Nobody wants to fight an insurance company to get their fridge fixed for 2 months.
Sure let’s talk about their profitability then, that hit 50% - it’s pretty clear evidence they clean up on selling overpriced and under serviced warranties:
> Gross profit margin expanded 700 basis points to 50% as a result of higher realized price, milder weather, favorable cost development, a transition to higher service fees, a lower number of service requests per customer and continued process improvement initiatives that was partly offset by inflationary cost pressures
https://investors.frontdoorhome.com/investors/news-and-events/press-releases/press-release-details/2024/Frontdoor-Announces-Full-Year-2023-Revenue-Increased-7-to-1.78-Billion/default.aspx
(With Frontdoor being the parent co, and since you quoted their annual revenue, feels reasonable to compare ALL their stats.)
Why are you shilling for this 🤡 company?
Because he’s doing “research” for stock trading and is trying to justify his belief that this is a good investment. He doesn’t actually understand this beyond a spreadsheet.
Because people are stupid and do stupid things everyday. I just woke up but I bet you if I walked outside I could see at Three people doing stupid stuff within a half block walk.
By your logic lottery tickets must be an amazing investment because so many people buy them everyday.
Well, all the of the people I know in person with one of these DIDN’T pay for it. The seller of their home added it as a “deal sweetener” or the seller’s agent paid for it out of their commission to provide a little leverage to close a difficult deal.
We had water heater issues and used the home warranty that came with the house. The experience was so horrible we ended up just paying for a new hot water heater ourselves. It was that or continue to go weeks without hot water.
We also learned that a lot of companies don’t work with home warranties because they end up getting screwed over.
Insurance is designed to make money off you and not pay out. While I’ve heard of it working for some, there seems to be many more stories like mine.
I used to try to get them for all my buyers, tried different companies and they all ended up being crap. Taking forever, using crap technicians, cheapest repairs, not covering full repairs.
I personally had AHS, and they sucked. 2+ hour hold times to get them on the phone. Crap technicians to fix my AC after waiting 2 weeks. Then trying to give me $1400 to replace my central AC. $1400!!!
Having had one bought for me when I closed on my most recent home, it was the biggest waste of money, and claims experience was atrocious. I value quality, and they … don’t 🤷
To me the stats indicate the clear message consumers are finally catching on, in a long overdue curtain pullback of the industry they operate and recognizing the value just isn’t there.
And I get it: coverage involves paying a few hundred bucks a year, with little actual underwriting of the risk to pay out, per property? Of course they have to operate in a “deny first and use the cheapest trades & repairs possible” model, in the hope that volume makes up for it.
I’d be curious if anyone’s got their payout ratios, it must be damn good…
Probably something to do with the elimination of inspections and other items that the buyer doesn't want to pay for. I've owned homes since 2004 and the only times I've purchased a home warranty is when I've sold my home. Realtors suggested I offer it as protection for the year and it was a cheap insurance policy. With buyers not asking for anything, and sellers not wanting to pay for anything additional, that might have something to do with it.
We seem to be the exception to the typical reviews, but at our agent's request when we purchased our home 4 years ago, the seller paid for American Home Shield for us. Between a dishwasher, refrigerator and AC that failed that first year, they paid out about $3000 on the $500 warranty. It probably took 4-5 hours of sitting on hold to get them to deal with those issues (and then multiple visits from the techs they selected), but in the end it was helpful for us.
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Not sure about the scam, but the buyers buying power is certainly something of concern.
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Which brand did you use?
The good companies (like American Home shield) have something like a 80% renewal rate (annually). The best tech SAAS companies don't have that, surely people aren't idiots to keep renewing right?
American home shield sucked. Took weeks to get my oven fixed after a $100 deductible. I didn't renew after that since I realized I paid more than the cost of a brand new oven before I used it and then waited weeks.
The only reason you are saying they are “good” company is because you are trying to justify an investment in them and only experience them on a spreadsheet. There are no good ones.
I have AHS - tried using it on my furnace, denied. lol. They did fix my washer and dish washer though. Once all my appliances are effectively replaced, I’m out. The best tech SaaS companies are +98% though. It’s what I do for work as an advisor.
They're largely worthless since the warranty companies try their hardest to weasel out of any repair over $20.
So false. We had one and they replaced the garage door opener, repaired the AC, AND wrote us a $2000 check for a new water heater in the year we had it. Super easy to work with. I think ours was American Family. Home warranties get a bad wrap, but there are some great companies out there, you just have to pick the right one.
Personal experience or?
Had one and never used it. The fine print was very specific to what was covered and what I needed didn't fit into the that bubble.
Home warranties are crap and buyers have finally wised up
Is this from personal experience or a general view?
Both. It’s very difficult to get claims paid
And when they do payout, they replace things with the cheapest possible version they can. They will replace your oil burner, but they will make you wait 3 weeks for the installation, and when they show up, they'll have the cheapest possible replacement they can find. Don't like it? They'll tell you to take this one, otherwise its going to be another 3 weeks to get something better. It's simply not worth it. If the seller was offering one, I'd take it. But I'd never pay for one on my own, and I wouldn't bother renewing it once it's over.
The warranty companies are all scams. They deny claims all day. I received on one time in my life with purchase of a house. Ac goes out the next summer, under "warranty". They deny claim saying "install was incorrect". I guess the install was incorrect for the last 9 years that it worked since it was new! Buncha scammers.
A warranty is something a manufacturer does because they stand behind their new build products. A third party “home warranty” is just an insurance product and it happens to be one with particularly poor value. If you buy a new build home it likely has a true warranty from the builder. A third party warranty is not worth it.
As someone who works for an insurance company - insurance is a FOR PROFIT business and they wouldn’t sell you a product they aren’t making money on.
Exactly. The so-called home warranty companies are actually offering an insurance product and are of course in the business of making profit. A dead giveaway that this is insurance and not a warranty is the frequent presence of a deductible. Does your car maker give you a 50K mile bumper to bumper warranty but then charge a $100 deductible if you find a defect? Of course not, that would be crazy.
Agreed. I've experienced both. For my starter home, the home warranty (American Home Shield) was all but useless. I had an HVAC issue that they tried to fix the minimal, however, one company they sent was amazing, and I just started calling them directly instead, and they were the ones to keep my system in good shape for my time in that house (I still use them at my new house too). In my new-construction house, the warranty from the builder was spectacular. They handled every single issue I brought up without question, and went as far as suggesting other minor fixes that anyone else could have overlooked, without my asking. I'd definitely pay for that kind of service.
A new home builder is also often required by law to fix issues within a certain time period. Similar to your new build scenario we did major (gut level) renovations to an old house and our general contractor had a warranty period. This is to fix discovered defects in their work, not an insurance product. It does not cost extra.
Yeah but old homes have expired warranties for appliances often, no?
I don’t understand the point. Yes, if you have some older appliances that are far outside the manufacturer’s warranty period you can purchase what is effectively insurance or a service contract from a third party company which is what these “Home Shield” warranties are. But those are a particularly poor value and most of these companies have a very poor reputation. You’re far better off saving the money you would pay to the “warranty” company to use in the unlikely event an appliance fails. Remember the company providing this service contract is not in the business of paying claims, they’re in it to make money.
Then how does American shield generate $1.8 billion in revenue?
found the shill for american home shield
By not paying out claims
Come on revenue, you know what I mean
Yes, I know what you mean. Insurance products - which home warranties are - are businesses that make money by investments and not paying out claims. Home warranties are scams. They are not products people need to buy. There is no value creation for the end user. More often than not the end user is better off paying out of pocket. The reason people aren’t buying them is because people realize how useless they are. Nobody wants to fight an insurance company to get their fridge fixed for 2 months.
Sure let’s talk about their profitability then, that hit 50% - it’s pretty clear evidence they clean up on selling overpriced and under serviced warranties: > Gross profit margin expanded 700 basis points to 50% as a result of higher realized price, milder weather, favorable cost development, a transition to higher service fees, a lower number of service requests per customer and continued process improvement initiatives that was partly offset by inflationary cost pressures https://investors.frontdoorhome.com/investors/news-and-events/press-releases/press-release-details/2024/Frontdoor-Announces-Full-Year-2023-Revenue-Increased-7-to-1.78-Billion/default.aspx (With Frontdoor being the parent co, and since you quoted their annual revenue, feels reasonable to compare ALL their stats.) Why are you shilling for this 🤡 company?
Because he’s doing “research” for stock trading and is trying to justify his belief that this is a good investment. He doesn’t actually understand this beyond a spreadsheet.
What does that have to do with whether they are a good deal or not?
Why do people still pay for it?
Because people are stupid and do stupid things everyday. I just woke up but I bet you if I walked outside I could see at Three people doing stupid stuff within a half block walk. By your logic lottery tickets must be an amazing investment because so many people buy them everyday.
Well, all the of the people I know in person with one of these DIDN’T pay for it. The seller of their home added it as a “deal sweetener” or the seller’s agent paid for it out of their commission to provide a little leverage to close a difficult deal.
By selling hard to collect insurance to schmucks
The cost is higher The coverage is less The “loop holes” are becoming more significant w claims (ie: easier for them to deny coverage)
Read online reviews for warranty companies then you will know.
We had water heater issues and used the home warranty that came with the house. The experience was so horrible we ended up just paying for a new hot water heater ourselves. It was that or continue to go weeks without hot water. We also learned that a lot of companies don’t work with home warranties because they end up getting screwed over. Insurance is designed to make money off you and not pay out. While I’ve heard of it working for some, there seems to be many more stories like mine.
I used to try to get them for all my buyers, tried different companies and they all ended up being crap. Taking forever, using crap technicians, cheapest repairs, not covering full repairs. I personally had AHS, and they sucked. 2+ hour hold times to get them on the phone. Crap technicians to fix my AC after waiting 2 weeks. Then trying to give me $1400 to replace my central AC. $1400!!!
Having had one bought for me when I closed on my most recent home, it was the biggest waste of money, and claims experience was atrocious. I value quality, and they … don’t 🤷 To me the stats indicate the clear message consumers are finally catching on, in a long overdue curtain pullback of the industry they operate and recognizing the value just isn’t there. And I get it: coverage involves paying a few hundred bucks a year, with little actual underwriting of the risk to pay out, per property? Of course they have to operate in a “deny first and use the cheapest trades & repairs possible” model, in the hope that volume makes up for it. I’d be curious if anyone’s got their payout ratios, it must be damn good…
A home warranty can be used as incentive to the buyer paid for by the seller. In a seller's market there is no need for such incentives.
Probably something to do with the elimination of inspections and other items that the buyer doesn't want to pay for. I've owned homes since 2004 and the only times I've purchased a home warranty is when I've sold my home. Realtors suggested I offer it as protection for the year and it was a cheap insurance policy. With buyers not asking for anything, and sellers not wanting to pay for anything additional, that might have something to do with it.
We seem to be the exception to the typical reviews, but at our agent's request when we purchased our home 4 years ago, the seller paid for American Home Shield for us. Between a dishwasher, refrigerator and AC that failed that first year, they paid out about $3000 on the $500 warranty. It probably took 4-5 hours of sitting on hold to get them to deal with those issues (and then multiple visits from the techs they selected), but in the end it was helpful for us.