4 Tips to Understanding a Home Warranty

Verify your home warranty company before signing a service contract. (Photo courtesy of Darien Wilson)

Verify your home warranty company before signing a service contract. (Photo courtesy of Darien Wilson)

Don't be hoodwinked by a home warranty service contract. Homeowners sometimes make the mistake of thinking home warranties act like homeowner's insurance — they don't. Before you buy or renew a home warranty, consider the following tips:

Verify licensing

Check with your state's department of insurance to verify if the home warranty company you're considering is properly licensed to do business. If licensing isn't required in your state, review the company's status with Angie's List, as well as your local consumer protection agency.

Review the fine print

Be sure to thoroughly read the fine print — the devil is in the details, and you want to make certain the proper items are covered by the warranty. Don't be afraid to speak up and ask the company any lingering questions before deciding if a home warranty service contract is right for you.

Communicate with your real estate agent

If you've received the home warranty when you bought a house, keep your real estate agent in the loop regarding any denied claims. He or she may have a relationship with the home warranty company and can make a call on your behalf.

Submit a review

Be sure to tell the home warranty company if their network contractor did a good job or not. Most keep a rating system on their contractors and disperse work accordingly. Also, submit a review with Angie's List, so other homeowners in your community can keeps tabs on who is performing well.


Editor's note: This is an updated version of a story originally published on May 4, 2011.


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Home Warranties, Warranty Complaints

A home warranty, or home service contract, provides service, repair or replacement on a home’s major systems and appliances for a usual term of one year. They've also topped our list of most-complained about categories for three years running.

Comments

We bought our home in April, 2011, and sale included a 2 year warranty with AHS, and to date, like Rolf, no contract, no way to get help when we've needed it. Only consulation is that we didn't pay for the service, directly, anyway...

Cliff....AHS DOES NOT have an arrangement with KW. They have an agreement with 2-10 and Old Republic. AHS walked away from the agreement KW wanted.

I've had AHS for several years and am generally happy with the service. If there is a company that doesn't do what they are contracted to do, you can request they be placed on a 'do not call' list for you. Yes, it took the AHS contractor 4 times to fix my central AC unit, but the non contract provider I was using couldn't find the problem

I've had AHS for 30 years and have never had a problem. Currently having my refrigerator replaced and was given the option of upgrading at my additional expense.

just bought a foreclosure house from the Federal Home Loan Bank .. it includes a two year home warranty ... so far , a month later I still have not received any policy information about who to contact in case of a problem

Our small, regional home warranty company received Angie's List's Super Service Award last year. Customers who know what home warranties typically cover love our product. As for our contractors, they must all meet a minimum grade on Angie's List to qualify with us, bill us their own rates, and GREATLY enjoy working with us! We hear the horror stories, read these reviews, and understand consumers' frustrations with the industry but we're happy to say that we are "raising the bar"!

i am a service provider for several home waranty companys i have been doing service work for them for several years it is my experience that it is not the warrantys that are bad but the real estate salesperson who sold them lots of folks actually get one with the purchase of there home and of course the real estate agent is using it as a closing tool not explaining coverage and or offering the option to upgrade the coverage then when they have a claim dont understand why it is considered pre existing. however if you take into consideration what the warranty cost including the deductable it is still less expensive in the long run than paying for service calls out of pocket

I bought a warranty because the existing AC unit was questionable. In a few years I got the unit replaced under the warranty. My issue is that I had no say or the ability to upgrade the unit. I went from a Carrier to a brand that I had never heard of. I would have been better off without the warranty and replacing the AC unit out of pocket.

Our home warranty company (2-10 Home Warranty) provided by the builder is trying to tell us that we do not have the full 2-10 warranty. I believe this to be a scam. In the past, I have used them only to get the cash, I used Angie's List to investigate the company they are referring me to and normally they are low ranking. Once I get the original quote, I go back to the warranty company and ask for a cash payout and use someone that is higher rated. It takes more work and research but after all it is your home.

We had to deal with AHS when our heater broke, they made excuse after excuse and never fixed the heater. Eventually we gave up and replaced the heater at our own expense, which is what they wanted. Home warrenty? Ha! They are only interested in taking your money, not protecting homes or providing any kind of service for the fees they charge. Do not fall for these scam artists, they are among the worst.

Great review, and very informative. Just remember to check the manufactures warranty first. Usually lower ticket items (under $200) don't need an extended warranty. It's just not necessary. Besides, should you get a old item fixed, or get a newer, UPDATED, i.e., new technology item. Consider both options. Remember the "Joneses". Thanks!

We get to deal with the home warranty companies fixing furnaces and air conditioners and we always hate to go on those calls. At the end of the day, no one is happy. They pay us poorly and never seem to have the customers best interest in mind.

I was with American Home Shield for approx 5 years, very bad service!

This is very vital consumer protection information!

I am selling my house in Texas through a Keller Williams listing agent who yesterday required me to sign a disclosure telling me that Keller Williams has an arrangement with American Home Shield to receive compensation.

I would ask the seller to give me the cost of warranty and get my own contractor. I have had plumbing and the people they sent out messed the plumbing up more than when they started, I had to get my own plumber to straighten their mess. I can only let you know my experience and you can decide for yourself.

to receive referral fees. I think it is extremely unfortunately that there is most bad news, all kinds of reports on Rip Off and Scam websites, yet Realtors continue to insist "it's standard now" to include a home warranty for the buyer when you sell your home. rubbish. From what I read, most Realtors won't use one for their own home, and buyers say they are glad they didn't have to pay for it themselves. That's fine, but it was a very real $650-$850 out of the sellers pocket. I currently have a rental home and the renter was interested in me having a warranty for the home. So I went online searching for the best company. I've been disappointed to learn that not only is there no best company, but even a good company is a myth.

We just bought a house with a warranty program. The air conditioner is giving us issues. I have been talking to our HVAC man. He said that warranty companies send them the products they can use. These products are of a lesser quality than we would put in our home. That is the "dirty little secret behind all home warranties."

Most warranty work is farmed out to a business local to that area. ie: Our company handles warranty work for a well known furniture company to clean furniture. We sub-contract. When you make a claim the company you are speaking to are probably not the ones actually doing the work. This company found us on the web. Another company dropped the ball. Thanks to that we have had a very good and profitable relationship for years.

I used to work for a Home Inspector and often heard about Home Warranties not covering things for the most ridiculous reasons. I'd never invest in one!

Any way you can rank the home warranty companies?

Although it's true that home warranty coverage doesn't always prove to be a source of savings when claims arise it's important to note that the contractor network is just as important as the home warranty company itself. If you are looking for a home warranty it pays to do your homework about the availability and quality of participating service contractors in your area. There are some honest home warranty companies out there but if they have two few participating service companies where you live then there's little they can do to give you the service you deserve.

I have a warranty program through Old Republic Home Warranties. I could not be more pleased. Their response is fast and efficient; the technicians they send are polite and seem to know what they're doing; they problem is corrected and my life goes on. I do recommend this company for people who seem to have issues with the warranty program they currently own.

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