The home warranty industry generally doesn’t seem to have a good reputation. Stories abound of people who bought home warranties only to be told about obscure provisions in the contracts that invalidate their claims. The biggest question you’ll probably have about the home warranty industry is “is it a scam?” because of disheartening stories on how some unsuspecting home owners fell into the traps of scam artists.
You may have heard conflicting stories about the home warranty industry and you might not be able to separate the truth, from the misrepresentation of facts, or outright falsehoods. Of course, we understand that some companies operating in the home warranty industry are shady; yet, their shadiness is not enough reason to paint the entire industry in bad light. Some companies might be shady but others have been running for 20+ years and providing excellent service to their customers.
The biggest cause of conflicts in the home warranty market
We have observed that one of the main reasons for the bad reputation of the home warranty industry is the unrealized expectations of homeowners. The absence of information on the obligations of homeowners and the responsibilities of the home warranty provider is the biggest cause of dissatisfaction in the industry.
Below are some factual pieces of information on what you can actually expect from your home warranty provider. We strongly believe that knowing the realities of the industry can help you disabuse your mind to the notion that all home warranty firms are out to fleece you.
The factual pros of home warranty
Your home warranty coverage puts the responsibility of repairing faulty appliances or systems in your home on the warranty company. The home warranty company might even foot the bill for replacing the item when a repair is not a viable option.
You don’t have to worry about conducting due diligence to find a reliable technician or contractor that will fix your damaged appliance or system. All you need to do is to call the home warranty company (an email could also suffice) and keep your fingers crossed while they send someone to your home.
A home warranty plan helps you to stay in control of your finances because you won’t have to worry about unexpected expenses to fix broken systems or appliances.
A home warranty plan can help you sell your home faster because it sweetens the pot for potential buyers. The warranty can give them confidence that won’t be paying out-of-pocket expenses to fix appliances.
The factual cons home warranty
Home warranty companies are in business, they want to make profits; hence, they’ll usually choose to repair a faulty item/system even when a replacement/overhaul might be the smarter option.
Claim processing will not move quite as fast you want when a blocked pipe is stopping you from using the rest room. The warranty company often need to shop around for quotes and the back and forth will look like needless delay to you. More so, contractors will need to wait for the company to ship in new components (where necessary) before they complete the repairs.
You probably know already that you’ll pay an annual premium (usually between $500 and $1000) on your home warranty. What you may not know is that you’ll need to pay a service call fee/deductible (between $50 and $100) each time you make a claim. Some warranty companies might also ask for a deductible on each damaged appliance.
Final words…
Buying a home warranty protection is supposed to give you a sense of security and it hurts when you file a claim and it appears that the company is trying to play a fast one on you. However, reading and understanding the terms before you buy a home warranty contract will protect you from unexpected unpleasant surprises. Understanding the realities of the home warranty industry will also help you make educated decisions when you want to purchase home warranty coverage.
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