When home warranty companies fail you

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July is the time of year when air conditioners work their hardest, and if they are getting old, they can fail. People who have a home warranty assume they don't have to worry, because they are covered for AC repairs.

But Nicole Gaskins learned otherwise, and she has a warning for all of us.

When her went out, Nicole she wasn't too worried. She'd been paying almost $500 a year for a home warranty.

"We wanted that safety net, where if something big went wrong, we had a warranty," she explained.

But when her 10-year-old AC started blowing hot, the house got up  to 90 degrees, and she got even hotter over how long it took to get to get a repairman to come  out. "We called, it took them two weeks to come out, and then they told us the compressor was broken," she said,

But after the repairman fixed it, she says, the unit failed again  in just a few days. "We called another company that was open on the weekends," she said, and they quickly got it running, but at big cost. "It was almost $900 in total out of pocket, even though we had a home warranty it still cost $900."

Nicole's problem is not unusual. Home warranty companies among the lowest rated businesses at Angie's List.

Earlier this year, Steve Jongewaard told us he spent a week with no heat at his home while he waited for his warranty company to come out. "We've called multiple times," he said. "My wife and I have been on the phone a minimum of 10 hours."

"We hear a lot of times that it takes a lot of time to get somebody out there," said John Peckskamp, a heating and cooling repair guy.  A lot of times it's a second party vendor, and if they are busy, (the customer has) to find someone else."

So Peckskamp's company recently joined a new trend:  they offer their own home warranties, using only their own employees to do the repairs. "We do everything in-house," Peckskamp said. "We answer the calls here in house, and we dispatch our own technicians on all our calls."

Angie's List gives three questions to ask before you purchase a home warranty:

  1. What is excluded? Pre-existing conditions (a leak or problem that has been developing for several years) are often not covered.
  2. Are older appliances still covered, such as a 20-year-old AC unit or water heater?
  3. Can you call your own repairman--if theirs are backlogged--or do you have exclusively use theirs?

Nicole Gaskins wonders if it's even worth renewing her warranty next year.

Bottom line: Know what you are signing up for so you don't waste your money.

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