As an experienced air conditioning service company in Navarre, your friends here at Southern Efficiency have had our fair share of go-rounds with a numerous variety of home warranties.
We’ve heard countless experiences from hundreds of customers over the years. And we’ve seen firsthand the back end of how home warranty companies operate.
Home warranties are becoming increasingly popular. You’ve probably heard of American Home Shield and Choice Home Warranty at the very least, and you may have even been their customer at one time, or even be so currently!
Southern Efficiency is dedicated to educating the fine communities along the Emerald Coast as to everything HVAC and home service related.
So, we decided to put together this article with some simple facts that we hope can help in some way, in making decisions or even saving your hard-earned money. Hope you enjoy!
- Home warranties aren’t a legal warranty
Home warranty companies want you to see them as an insurance company. Their verbiage in the contract and their dealings proves this, i.e., “deductible”.
However, NO home warranty company is in ANY way insurance. Home warranty companies simply are a service provider. They sub-contract the work you need to be done. In short, when something breaks in your home, instead of you calling a repairman, you are simply paying the home warranty company to find and call someone for you.
In this way, the home warranty effectively becomes a middle-man you pay monthly in case a call needs to be made.
- Home warranties require, yet do not provide… maintenance
If you are behind on maintenance for an appliance in your home, the home warranty company will find a way around paying for the repair needed. For example: your dishwasher breaks. The home warranty company sends someone out to fix it. Have you cleaned out the drain line on your dishwasher yearly? Well if not, don’t expect for the repair to be covered!
In the meantime, you could have been putting the money in the bank you have been handing to the home warranty company every month, and paid for a brand-new dishwasher.
This policy on maintenance usually applies to every component in your home: all your appliances, HVAC system, electrical system, etc. Since it’s not reasonable or realistic for all of us to be able to have professional maintenance performed on every single component of our homes on a very regular basis, the home warranty company is definitely playing the cards of this game in their favor.
- Many repairs may not be covered under your contract
When signing up for a home warranty, you might feel impowered, like you have found an awesome loophole to having to make costly repairs to your home. Don’t be surprised when you find that your specific problem is not covered under your contract!
Numerous common issues such as mold, rust, and leaking parts, are regularly denied by home warranty companies because of verbiage in the contract. In short, the most common and costly failures in your home are not likely to be covered by the home warranty.
- You are surrendering your control over your home repairs
Something most people do not consider when signing up with a home warranty is that you are surrendering your control over the repairs done to your home. In order to take advantage of the possibility of the home warranty paying for the needed work, you are giving them the power to send whoever they can find that is willing to come out for the least amount of money. Normally a home warranty company allows for up to 10 days to provide service, and you have no control over when the service provider will arrive.
On the other hand, if you were not giving your money every month to a home warranty company, you would retain total control over who comes to your home to make repairs on a particular component, as well as scheduling and pricing. Why would you want to give up that power over your own home?
- Most, if not all, home warranty companies are sued on a regular basis, and many have class action lawsuits filed against them.
As you can imagine, if a homeowner has been paying hundreds, or even thousands, of dollars every year (perhaps for many years!) to a company who claims they will fix any issue that arises with their home….and then tells them that they will not cover the specific issue they are currently having, this homeowner is going to be very upset. They are likely to cancel their “policy”, or agreement, that they have with this company.
What many do not realize is that Home Warranty companies are COUNTING on this being as far as the homeowner goes. If it is, they have truly won their game. We hope that you have time to check out the article below, written by a lawyer, that explains it better than we can.
What we can tell you that if a homeowner were to find themselves in this situation, especially if they have been paying for years which would add up to thousands of dollars wasted on a false promise, the wise thing to do would be to sue the home warranty company.
The home warranty company, very anxious to stay out of court and the public eye as to their deceitful business practices, would then litigate, or settle, out of court with the victimized homeowner.
This is not to say that you will make money by suing the company. In almost every case, a homeowner will still lose money on the deal, not to mention the frustration and unnecessary trouble they will have put themselves through in an attempt to beat the system.
- Buying a home warranty is a FINANCIALLY BAD MOVE
We have talked with so many homeowners over the years who have waited way too long to figure this out. One gentleman we served told us he had his home warranty for nearly five years. He paid approximately $60/month for the service. He said he had used the home warranty for repairs 3 times during those 5 years, and one of those times the claim was denied, so he had to pay out of pocket. Doing the math with him, we showed him that over a period of 5 years, he had paid nearly $5000 to the home warranty company. The 2 repairs that they covered for him weren’t even a fraction of that $5000.
These numbers aren’t an extreme case. In many instances when a home warranty company will not cover a needed repair, the customer will cancel their agreement with that company and sign up with another home warranty company. They could bounce around with different home warranty companies for years, paying monthly all along. This $50-$100 payment adds up quickly to thousands upon thousands of dollars that could have been going into the unsuspecting homeowner’s bank account, where it would have been accessible if any items in their home needed to be repaired.
It’s easy to see, then, why paying a home warranty company for peace of mind is an incredibly poor use of your hard-earned funds. Financially speaking, you are quite literally in most cases paying for air.
- Home warranties create their own legitimacy
If a homeowner were looking to purchase a home warranty, and wanted to do some research, it’s likely they will come upon websites rating home warranty companies. While they may seem to be reliable upfront, be careful! Many, if not all, of these websites are paid off by home warranty companies, or even created by them.
To help prove this, we typed in “top 10 home warranty companies” on Google. This was the result.
We clicked on the third search result, “the fastest way to compare”. The homepage appeared like this.
Upon typing in our zip code here in Navarre, we were greeted with this page displaying the most popular home warranty in our area, Choice Home Warranty.
If we scroll down to the bottom of the page and click on “terms”, we see this.
“The operator of this Website is a marketer who is compensated for its services and thus cannot guarantee that our endorsements and recommendations are always free from bias.”
In other words, we got paid to put this company at the top.
Here’s one more example:
It’s clear who’s paying for top spot.
We really appreciate you taking the time to read our attempt at an unbiased, yet very candid and transparent view at the methods and practices of the increasingly popular home warranty. If you would like more information please take a look at the articles below, written by the Washington Post, NBC, and Consumer Reports.