4 Reasons Homeowners Hate Home Warranties
Owning a home is still considered by many as the pinnacle of prosperity, and the culmination of the American dream. Still, it isn’t with out challenges. With crooked window salesman, dirty Groupons, and DIY failures, home ownership can be like navigating a ship through treacherous waters. Of all the problems associated with home ownership, none seem to be as nefarious as dealing with home warranty companies. The grievances seem limitless on the web and no company escapes unscathed.
We’ve boiled down the hostility to 4 main reasons, and have solutions for each.
1. The consumer did not read the contract.
The number one reason people seem to hate their warranty company is because they treated their contract like the Facebook terms of service. They didn’t read it. No one wants to hear it, but the customer is always right, until they’re wrong. A home warranty company isn’t a charity. They only make money by paying out less than the revenue they generated. They have strict rules and coverage, and limits and you need to read the contract and understand it. There is an abundance of home owners annoyed that their claim was denied, or not fully paid for, that simply didn’t understand their coverage. For example, you can’t attempt to repair something and expect a warranty company to come in and save the day. They won’t. Leave it alone. Normal maintenance isn’t covered. Welcome to home ownership. Some coverage is only available in premium packages that cost more. Secondary repairs are often not covered. If your furnace breaks, and new duct work is needed, they aren’t going to replace the duct work. That is on you. Basically, read your contract and understand what your obligations will be and what your coverage is.
2. The repair time was egregious.
Also on the top of the list for sending a home owner into a fit of fury, is the egregious repair times when a claim is filed. There is no end to the horror stories of one week or longer turnaround times as homeowners huddle around a space heater waiting for the contractor sent by their warranty company. And if you followed step 1 one above, you probably noticed that using your own contractor will void coverage. My recommendation is to use a company that allows you to use your own contractor. It’s always best if you use their approved vendors, but you will want the option to use your own if they give you an outrageous wait time. Residential Warranty Services and Select Home Warranty are two companies that give you that opportunity. Again, read your contract to see what the process is for choosing your own contractor.
3. Preexisting Conditions.
Home warranty companies have a very loose definition of “preexisting condition.” Many consider any item that fails within 30 days of owning the home, or purchasing the warranty as preexisting. If your AC works fine for 29 days and then quits, your warranty company is going to wiggle out of that claim citing their preexisting conditions clause. It’s enough to make some people vomit. Other companies rely on the technician they send out to determine if a system has a known preexisting condition. They may conclude that a defective system should have been noted by the home inspector even though it was working fine at the time of the inspection. There is not a whole lot you can do about preexisting conditions, but you do have options. Some warranty companies have plans that don’t have a preexisting conditions clause, but the seller of the home must have the systems evaluated and have a warranty in place until you take over the home and your warranty starts. AHS allows you to purchase additional coverage that covers undetectable preexisting conditions. Residential Warranty Services has a simpler solution. If you have your home inspected by Certified Inspection Expert, you won’t need to worry about preexisting conditions. It is as simple as that. (Shameless plug) If we inspect your home, and you purchase your warranty from Residential Warranty Services, you won’t need to worry about preexisting condition clauses. You will also get 6 months of additional coverage for free.
4. Multiple Deductibles
It doesn’t matter if you call them deductibles, trade service fees, or service call fees. If you pay more than one for the same repair, you will want to pull your hair out. Even if a company offers low deductibles, they can add up. You shouldn’t be surprised though. Your contract probably clearly states you will need to pay a deductible EACH time a technician comes to your property, regardless of the outcome. The most ridiculous part of this is that you need to use their contractors. If they send out an incompetent contractor who can’t fix your problem, you need to pay the deductible, and you will need to pay it again when they send out another contractor. Some home warranty companies put their money where their mouth is though. The Home Service Club won’t make you pay another deductible for the same repair if its within 30 days for a labor related problem, or 90 days if its a parts related problem. Residential Warranty Services steps up to plate yet again not requiring another deductible for the same repair if its in the same policy period. You can save your money and your hair.
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