Homeowners Beware: When it Comes to a Home Warranty, the Dev
SOMERVILLE, N.J., Feb. 6, 2020 /PRNewswire/ -- Home Warranty Day is February 10, and it's a perfect time to consider how a home warranty helps protect you from unexpected expenses related to home repairs. According to HomeAdvisor, 75 percent of new homeowners will face at least one major emergency within the first year of owning their home. Those emergency projects can really add up and it's important to be prepared.
Simply put, a home warranty is an annual service contract covering the repair or replacement costs of specific systems and appliances in your home. A home warranty can offer a financial safety net to help give homeowners peace of mind regarding unexpected home repairs. However, as with most service agreements, the devil is in the details and many consumers find out too late that the warranty they purchased does not provide the coverage they thought they were getting.
Here are some of the most common complaints consumers report when it comes to home warranties.
Virtually all home warranty programs will include a limit or maximum they are willing to pay to replace a failed system. In many instances these limits are within normal ranges and will adequately cover the replacement cost of most home appliances. However, homeowners need to review these limits very carefully. In some cases, the limits are unrealistically low and do not consider the rising costs of home appliances. If, like many homeowners, you have average or above average appliances, you could find your warranty coverage will be far less than the full replacement cost of a similar model.
Virtually all home warranty programs require a service fee to be paid by the customer when a claim is submitted and a service professional is called in to review the situation. This fee ranges from $75 and up. In most instances, a consumer will only pay one service fee per claim regardless of the number of visits it may take to have the service provider complete the repair. However, consumers need to read their warranty agreement carefully to ensure this is the case. It's not uncommon for the warranty company to charge a service fee each time they dispatch a repair professional, which can add up quickly and require consumers to pay hundreds of dollars more for a repair they thought was covered.
SERVICE PROVIDER SELECTION
Most warranty providers have a network of service providers they use to make the repairs covered by their contracts. As such, most warranty providers do not allow the consumer to select the company that will make covered repairs. In these instances, the service provider's relationship, and often their allegiance, is with the warranty company and not the consumer. While this is not to say the service provider doesn't want to do a good job, they may be focused on getting the job done at the warranty company's negotiated rate. Most homeowners would prefer to use a professional they know and trust and that can assist in servicing their systems moving forward.
There is also a concern that the service provider may be biased toward the warranty company when it comes to determining coverage in the event the program has a pre-existing condition limitation. When considering a home warranty provider, ask if it's possible to use choose your own service professional in the event of a claim.
For some warranty companies, a pre-existing condition exclusion provides the warranty company the option to deny coverage on claims they consider to be pre-existing. This means if the warranty company determines a condition in need of repair existed before the coverage was secured, coverage can be denied. Most warranty programs do not require a home inspection and even promote "No home inspection required." This typically works in the favor of the warranty provider. Without a documented representation of the prior condition of an item, they now have the means for denying the claim via the pre-existing condition exclusion.
HOME INSPECTION AND HOME WARRANTY
Many consumers confuse home warranties with home inspections, but they serve different purposes. Home warranty programs generally focus on the major appliances in a home such as the heating, cooling, kitchen appliances, etc. While home inspections do evaluate major elements and built-in appliances, appliances such as washers, dryers, refrigerators, door chimes, humidifiers, etc. are not considered part of a standard home inspection. However, these are covered by most home warranty programs.
Conversely, a home warranty does not protect consumers against many significant issues that arise with non-mechanical components such as the roof and structure of a home, which are evaluated (but not covered) as part of the home inspection.
A home inspection is the perfect complement to a home warranty. The home inspection will document conditions that existed at the time of the inspection, which minimizes the potential for a pre-existing condition denial.
About HouseMaster's Home Solutions Warranty
HouseMaster, North America's first home inspection franchise and oldest name in the industry, offers a home warranty called Home Solutions Warranty (HSW) program (backed by World Global Group). This program requires a HouseMaster home inspection to document pre-existing conditions, which means the customer will always know whether a claim will be paid or disallowed. If the inspection report did not identify a problem with a covered item and it fails, it will then be repaired or replaced as described in the program's Terms and Conditions.
HSW has one of the broadest coverages in the market today offering up to 15 full months of protection. The program covers kitchen appliances, plumbing items, heating and air conditioning systems, washers and dryers, pools and spas, and more. For pricing and coverage information, visit homesolutionswarranty.com.
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