Is a Home Warranty Really Worth It?

Is a home warranty really worth it?

A Chino Hills homeowner says she’s had to fight with her insurance company for home repairs, and suspects her money is being wasted.

After 20 years of homeownership, Karen Nemo says she knows to prepare for the unexpected.
That's why she's paid American Home Shield thousands of dollars over the years.

“It's an insurance policy for the mechanicals at your home,” she says.

When her washing machine broke down, she says the company wouldn't repair it because it had been overloaded.

Nemo says when her microwave needed a fix, AHS declined because they couldn't read its serial number.

“It's installed above the stove. What do you need the serial numbers for?” she asks.

And she says when a refrigerator needed replacement, it took months to fix.

“We're having to stay home, wait on them. One day they never came at all,” she says.

“The problem with that is, you're at their mercy.”

Home warranties insure parts of your home against normal wear and tear, but you often still have to pay for the service call, and policies have exclusions if appliances are used the wrong way.

“The problem is they're insurance policies that really just don't cover that much,” says Kevin Brasler of nonprofit consumer group Consumers’ Checkbook/Center for the Study of Services.

Brasler says most repairs cost less than $300, so there's a simple question you should always ask when deciding on a home warranty.

“Is this covering me for something where if I needed help with that it would be financial catastrophe?”

Nemo says she’s not satisfied with the responses AHS provided for her claims.

“They lead you to believe, you pay this, you're covered, and in actuality that's not what's happening,” she says.

American Home Shield tells NBC4 in a statement that it "Worked at length to work around the (Nemo’s)' schedule" and said the contractor may have been responsible for the delays. As with any contract, it is always important for consumers to understand what's covered, what's not, and the overall claims process."

American Home Shield tells the NBC4 I-Team that the company can't find a record of Nemo's complaint about the microwave and says there are examples of its contracts on its website so potential customers can read before purchasing anything.

Nemo plans to re-evaluate her warranty when it expires.

“I felt really used.”