Money Talks News: Are Home Warranties Worth the Money

The air conditioner... the fridge... the roof... all expensive parts of a home to repair or replace. So should you buy a home warranty?

Home warranties sound like a magic bullet, but they often don't live up to expectations. Here's what you need to know when you're looking at one:

First, what's covered: Usually bigger stuff, like appliances and A/C systems.

Second, who's doing the work: You often have to use specific service providers.

Third, cost: a typical policy will run you about 4 - $500 bucks a year, plus a service fee if you make a claim. And the most important thing: Exclusions.

For example, plumbing may be covered, but not a septic tank. Or your fridge, but not the icemaker.

And if you file a claim, expect some pushback.

Here's a true story. I had a home warranty when I bought this house. The refrigerator broke during the first year, repairman comes out, denies the claim. Why? He said the coils were dusty under my refrigerator.

Therefore I hadn't maintained it properly, therefore they don't have to pay.

That was the last home warranty I'll ever buy. But if you're going to go forward with one of these things, follow these steps:

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Money Talks News: Are Home Warranties Worth the Money