Leslie

What do you guys think about these when purchasing a not new home?

Any experience or inside information is welcome. Even from Pulaski, if he's not still pouting that is.

EDIT: This is the one recommended to me. I'm not convinced.

https://www.orhp.com/

chawkins99

We got one when we bought our home but it was paid for by the seller as part of the contract. We never used it.

Our daughter recently bought her first (65-year-old) home and the seller refused to pay for it so we bought it for her. The cost was under $500 but I believe it was worth it for the peace of mind. She has called on it when the A/C quit.

I believe it is something of a loss-leader for the insurance company. At the end of our 12 months, they offered to renew it but for about 3 times the original cost.

I would probably not have bought one personally for our house (built in 2002) but think it was money well spent for a 1950's era house.

Leslie

Yeah, I keep circling back around. The house I'm (probably) going to buy is an older home but has had pretty much everything upgraded. I think it's kind of crazy to buy an insurance policy on appliances that could probably be replaced for the price of the premium ... unless they all break at once. The central AC and gas furnace being the exception.

chawkins99

Make the seller pay. Make it part of the contract.

In our daughter's case, the A/C required a new control panel. Probably under $200 including the call-out but she's only 5 months in, so time for more to go wrong (though hopefully not)

We also had ORHP.

IIRC, they won't sell direct to the homeowner. Had to do it through the realtor.

Leslie

Oh I will definitely ask the seller to pay. But I'm squeezing so hard on everything else ... he might refuse this one thing. I was just wondering, if he did refuse, should I get it for myself?

Yes, that's correct, it has to be done through a realtor. Not sure why though.

kins

I've owned my 28-year-old house less than 10 years. In that times I've replaced the oil-fired boiler (with a natural gas boiler at a cost of $12k), the fridge twice, the dishwasher twice. I've also had the driveway resurfaced - we share it with neighbours and my share was $14k.

We also replaced the roof on the garage - the roof on the house was only a couple of years old when we bought the house so didn't need doing - but we did that ourselves so it didn't cost much but took a lot of time and effort and sweat.

If there was an insurance policy that covered that lot I'd have bought it...

Leslie

I think that if there was such a policy, everybody in the world would have one!

I wonder, if push comes to shove, if they really actually do replacement? Rather than just service calls which still cost the homeowner around $100 minimum anyway.

Pulaski

They're an utter waste of money! ..... While people can and do claim on them, between the deductible and the quality of replacement (if you claim for a new appliance of any sort, you'll only get the cheapest bargain basement replacement), I personally have severe reservations about the sense in buying such a policy, with the sole possible exception of using such a policy as a sweetener for selling your home, as many buyers apparently like them.

If any appliance needs more than a modest amount of repairs the insurers will rapidly condemn it and move to replace it with an "equivalent" appliance - equivalent in their opinion, but likely not yours.

The buyer of a nearby home got a new roof by claiming on a homeowners warranty a few months after moving in, but the new roof is obviously (visibly from the street) of cheap shingles and was nailed through the existing roof, which although code-permissible in NC is a certain way to ensure that your new roof will have a reduced life.

Given the poor quality of replacements under a homeowners warranty, I sincerely doubt I would even claim on a policy if it had been purchased for me by the seller of a house I bought.

ETA A homeowner's warranty might make sense for an impoverished first time buyer, if they have used all their resources to buy a home and facing a roof, heating/AC repair or other major expense would cause them a financial crisis.
Just saw your follow-up post. .... If you're pushing on other things then use it as a bogus bargaining chip: "If you agree to x, y, and z, then I won't ask you to pay for a homeowner's warranty."

Leslie

This is exactly what I was thinking. I was curious to see if anybody would post about how fantastic their experience was and that the policy pays for itself, etc.

In my situation, the roof is almost brand new (2014 complete replacement) no shingles on top of old roof. I've seen that before and, yes, it is shoddy. So the only big items are heating and AC. They are separate units so it is unlikely that they would both go out at the same time.

As far as the appliances go, my washer and dryer are just over a year old so I don't see them crapping out any time soon. The built-in appliances in the kitchen are okay for now but my plan is to eventually replace those anyway.

I haven't had the inspection done yet so I don't know everything about everything. I do like the idea of acting like I'm giving something up by waiving the insurance.

Does anybody know if the realtor makes a commission on these policies?

Marc_ely

We got one of these thrown in with our house purchase earlier this year. The seller paid and it was over a grand in cost.
Our house is 50yrs old and made to the usual high American standards (cough).

We've used it 4 times already. Each time we have a $65 co-pay, so $260 already.
It's with First American. You have no choice in who they send. Some good, some not so good.
The first one was for a pool heater, which is very old. They patched it up rather than replacing it.
The second call was for a blocked sink UPSTAIRS that I had not been able to unblock. They had to use a 40' auger to clear out. In the process they made a big mess and damaged our stairs.
The third was a non-draining dishwasher. They fitted a new pump and did a good job.
The fourth was a cracked waste pipe. They fixed that pretty well.

I'm a handy guy and aside from these I've fixed the HVAC, Fridge, leak in attic and other stuff myself. I have a leak on a flat garage roof but the policy won't cover that.

Overall I can't see me renewing it.

Leslie

Thank you, I appreciate the information. For the purpose of this discussion, let's pretend YOU paid for the policy yourself. Do you think that you actually saved any money?

Pulaski

For $1,260 (premium and copays) for those four repairs, and ignoring the mess and damage to your stairs, I suspect that you still may not be ahead on the deal. In other words, you could have paid for them yourself (I did note that your premium was paid by the seller), for around the $1,260.

Marc_ely

I just looked up the documents from the sale. Actually the policy was $770 so all in cost is a round 1k.
For the repairs I had two of them were sub 1hr with low cost parts (thermocouple for heater) and dishwasher pump. I reckon they were $150 each jobs.
The others took longer, so maybe $300 each jobs.
So roughly $900.

So close but still probably more than getting your own trades (that you can pick yourself).

Leslie

This is the part I keep thinking about. I'm not impoverished but I am using my available cash (that's what I've been saving it for) so it will probably be tight for a while after the closing. There is some immediate work that I will absolutely have to have done and the seller is simply not going to pay for everything.

I'm not one to panic though. If the dryer goes out, I can hang-dry my clothes for a while. If the oven breaks, I can eat sandwiches, etc. I get nervous about heating, AC, plumbing and electrical though. If those suffer catastrophic failure in the first year, I would probably have to put it on a credit card or do some sort of financing.

chawkins99

My daughter was a first time buyer and exhausted all her funds (and a fair amount of ours) buying.
She is also 200 miles from us and the boyfriend (as a handyman) equates to a chocolate teapot.
Had she lived 10 minutes away, I would probably not have bothered.