Yes, most home warranties are worthless!
Home warranties are not worth the paper they are printed on. Take a look at this home warranty example below.
1st, Coverage is limited to 3 weeks after the real estate closing for most policies.
2nd, There’s many limitations & restrictions on what’s covered.
3rd, Some policies have a hefty deductible to pay first.
4th, There are many stipulations in filing a claim, so most people don’t bother pursuing a claim.
(Here is part of the limitations under one such policy.)
WHAT IS EXCLUDED UNDER THIS LIMITED STRUCTURAL WARRANTY?
1. Any item or component not specifically listed as covered.
2. All secondary or consequential damages.
3. Cosmetic repairs.
4. Items listed as defective on the inspection report.
5. Items needing further professional evaluation.
6. Items not verifiable or not present on the home inspection report.
7. Items beneath concrete.
8. Items normally covered by regular homeowners insurance.
10. Damages caused by the lack of normal maintenance and care.
11. Water damage.
12. Any damage caused by terrorism or any natural disaster.
13. Concrete cracking or scaling.
14. Any damage caused by subsidence / failure of supporting soils.
15. Block walls.
16. Roof repair is limited to the immediate leakage area only and not to replacing the entire roof.
17. Removal and repair or replacement of walls, floors, roof or concrete to repair items.
18. Repairs or replacement materials will be completed in substantially the same kind of material.
19. Improvements, upgrade of materials or modifications to the original design are not covered.
20. Interior and exterior painting and all other maintenance items are not covered.
21. Any damage caused by vermin (insects, termites, rodents, etc.), or by mold in any form.
So if you see a real estate listing or home inspector advertising about home warranties, don’t get get too excited, it’s just a marketing gimmick.
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