Home Warranties and Water Heaters

When you purchase a property there is that minor question of the home warranty.  You wonder, “Is it really worth it?”  We would like to share a few experiences and some advice for helping you make up your mind.

Our first property (and home) was a humble little duplex.

Home, Sweet, Home

We were slightly younger and much dumber and we decided to purchase the home warranty mainly because the realtor did an excellent job selling it.  It used to be the case that many realtors would receive commissions for selling home warranties but that is pretty rare now.  Our realtor did not receive a commission, but the home warranty company was affiliated with the realty broker.

 

Anyway fast-forward about 7 months to winter and a week of really cold weather: Horror of horrors, a pipe bursts in the upstairs unit. We were very, very, very lucky and nothing was damaged.  We called up our plumber and he was able to cut a hole in the wall and fixed it the same day.  Since the bill was relatively small, $250, we wrote him a check that day and decided to see what we could get reimbursed for by the home warranty company later.  That reimbursement didn’t quite go as planned - we later found out that our home warranty would not cover the repairs.  The home warranty company (usually) requires that you use the plumbers and repairmen they specify. They try to reduce fraud by relying on the estimates and work of servicemen and companies they know.

A couple weeks later, our tenants in the upstairs units complained about running out of hot water.  We thought the temperature just wasn’t hot enough on the hot water heater, so we turned it up and thought the problem was solved… until we got the same complaint again.  After opening a claim under the home warranty, a plumber came to our house the next morning and diagnosed the problem. Here is what a corroding water heater (ours) looks like:

We should've have know this was trouble.

The plumber told us there was no point in fixing such an old hot water heater and he could replace it the next day. Unfortunately, there were some items not covered under the home warranty that were required for newer code specifications, including an overflow vessel. The gas lines to the water heater had been sealed with spray-paint, and the whole setup looked sketchy.

Not the best setup in the world

Still, we received a new 40-gallon gas water heater for a $100 deductible and $285 of non-covered expenses, all in all pretty good deal.

Much better!