Warranty Companies on Most Complained List again

The leading real estate portal Angie’s list has released its annual list of best and worst rated companies based on member surveys. Home Warranty companies topped Most Complained List for 3rd Straight Year. Thirty-eight percent of the reports for home warranty companies were “F” grades. In addition, architects, structural engineering and solar panel companies made the bottom ten for the second year in a row. Angie’s List collected nearly 300,000 reports in 2007 from members who graded service companies on overall experience, price, quality, responsiveness and punctuality. Here is the list.

Visit Angie Hicks Blog to read the complete article

Angie’s List Top 10 worst grade earners:

1. Warranty companies
2. Home builders
3. Furniture sales
4. Internet service providers
5. Architects
6. Structural engineering
7. Solar panels
8. Taxi/Shuttle service
9. Entertainment/party services
10. Mattresses

Angie’s List Top 10 best grade earners:

1. Veterinarians
2. Dog walkers
3. Piano tuning
4. Animal training
5. Hauling
6. Hair salons/barbers
7. Upholstery cleaning services
8. Animal/house sitters
9. Window cleaners
10. Lighting services

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Need a home warranty? Probably not

Gregory Karp | Spending Smart
November 18, 2007

Home warranties are a hot topic, as many home sellers offer the additional peace of mind to attract buyers. But many homeowners are asking, ”Should I buy a home warranty for myself?”

Home warranties, or service contracts, are different from homeowner’s insurance, which provides hazard and liability protection. A home warranty is a service contract for an existing home that covers the breakdown of its major operating systems, such as a furnace, and major built-in appliances, such as a dishwasher. The homeowner buys the one-year service contract for $300 to $500 and pays a service charge, often less than $100, for each call.

These warranties are most common in home-sale transactions. In general, it’s a good idea for home sellers to pay for a home warranty as a marketing tool to attract buyers in a slow market, said Ilyce Glink, author of ”100 Questions Every First-Time Home Buyer Should Ask” and editor of the real estate Web site ThinkGlink.com.

A service contract allays buyers’ fears that they’ll be stuck with a big repair bill as soon as they move in–if the stove and air-conditioning system break down, for example. In California, where it seems most real estate trends begin, home warranties are standard, with about 90 percent of existing-home sales including one, according to the Home Warranty Association of California.

”Of all the perks you’re going to offer, this is a cheap one,” Glink said.

On the other side of the transaction, savvy home buyers should ask for a home warranty. An eager seller is likely to throw it in for free.

Read Complete Article …

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Annoyances with Home Warranty Policies

It is not too difficult to find home warranty policy owners who are frustrated with the services they were offered. While the buyers think they have received the raw end of the deal, warranty companies justify their take by quoting contract terms and small prints often neglected by the buyers. Obviously, with the premium we pay, warranty companies do not make money if they provide the kind of service buyers would have wanted.

This page contains a list of articles and discussion threads about home warranty annoyances experienced by buyers. Most of the opinions about the services here are obviously not positive. However, you should be aware that bad experiences and bad news spread out fast, while positive experiences about these companies are not recorded very often. If you are looking to buy home warranty, you will never find a perfect company based on these opinions. The game is about weeding out the really bad ones by choice of elimination!

To keep these annoyances in perspective, we suggest you read our articles - Home Warranty Buyers Guide and Things you must know about home warranty

We also have user reviews on each of the home warranty companies available on this website. Please visit Provider Ratings section for a detailed review

Opinions stated below are from independent websites and homewarrantyreviews.com neither endorses, nor denies them.

Home Warranty Consumer reviews from My3cents.com contains a long list of reviews and covers many warranty companies. You can post your opinion as well.

Opinions from eHow.com - eHow.com published an article explaining how to get home warranty. Readers shared their problems with home warranty providers and policy here

Discussions forums at epinions.com contain reviews and home warranty scams

Complaints about AHS
From www.mortgagenewsdaily.com
From consumeraffairs.com

Problems with Mutual Warranty
Scam.com Article

Problems with First American
Epinions.com Article

Problems with 2-10 Home Warranty
How one person fought with 2-10 home warranty to pursue the claim

Please share your links and annoyances with home warranty companies by posting your comments below.

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Home warranty and homeowners insurance

Wondering what is the difference between home warranty and home owner insurance ?

Homeowners insurance covers personal belongings and the entire house in case of burglary or natural disaster such as fire, lightning, tree fall etc., but it does not cover regular maintenance and replacement costs of appliances, and that is where home warranty coverage picks up. Home warranty is a wear and tear insurance against equipments and appliances such as heater, A.C. unit, plumbing and electrical systems.

What does homeowners insurance cover, and when?

• Personal property, furniture, clothing, jewelry etc. up to some value
• Structure and contents of the home
• Your living expenses if the home is not in a living condition due to natural disasters
• Appliances are covered as well, but only in the event of natural hazard or special circumstances.
• If someone visiting your house gets injured while in your property (slipping on the icy drive way for example) and if you are sued, you are covered by homeowners insurance.
• It protects you from a variety of events, including fire, lightning, tree-fall, burglary, storms.

What does home warranty cover, and when?

• Basic coverage includes the repair and replacement of major appliances such as Heating/Cooling system, Water Heater, refrigerator, Dishwasher, Range, Oven etc. Plumbing and electrical system are also covered
  Optional coverage varies across insurance companies. Some companies cover Clothes Washer, Drier, Microwave oven, and roof maintenance in the basic coverage, but other companies charge extra.
• Coverage is generally effective 30 days from the date of buying the policy. But please be aware that claims can be denied be insurance companies for various reasons, including what they “maintenance negligence”. Please read Thigns you must know before buying home warranty article for more details

Finally, homeowner insurance is required by your mortgage company, but home warranty is optional and may not be necessary for all home owners. Please read Do I Need Home Warranty article if you are considering it.

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How to pursue insurance claims

This article explains how to pursue a claim when the service provider company is acting tough on your claim. The article was written to help with home warranty insurance claims, which have highest claim denial rate. But you can apply the same strategy to any type of claims including airline claims, cable, telephone and other utility companies, banks, credit cards, etc.

Dealing with claims - General Guidelines

1. Maintain call logs - For each call, note down
   • Date, time and duration of the call
   • Customer service rep’s *full name, rep ID, call center location
   • Supervisor’s name if you got transferred
   • Conversation highlights
2. Always stay calm and never be rude. Be mindful of claim center reps’ situation. They spend their whole day fielding tough questions from irate customers. They will certainly help you if you are nice to them; otherwise they will play by the rules hard and fast. Explain your position and ask them to help you out. Remember, they have nothing to lose and your fight is against the company, not the rep
3. Do not call during peak hours and Mondays They will not be able to spend time with you during business hours. Avoid morning hours, lunch time and Mondays.

If you have followed the above guidelines, you can deal with most of the claims. But then there are tough claims which requires a special approach.

Dealing with tough claims - How to play the game

1. Gather all details at once before you make the call - Collect all the details such as account #, model #, service contract, claim center’s 800 # etc. I prefer to keep this info online so that I will have access to the details from anywhere. You can use a draft email saved copy, or Google Notepad kind of online service. Use the same notepad to add call logs each time you make the call. If time permits, collect details of similar claim denial issues - from your friends or from the experiences posted on the web
2. Pay attention to agent’s greeting message - Greet the agent and note down her/his name, call center location and time in your call log immediately. Address them using their name to make them feel respected.
3. Explain the problem patiently and ask them to help you resolve it. Understood, you are frustrated and dissatisfied with the service, but stay calm and respectful. You cannot get personal and express your anger against the agent, who is not directly responsible for the situation.
4. Provide details of your sincere efforts to resolve the issue - Justify as to why you think this claim should be processed. Explain how many times you have called before and mention the name of the rep you spoke last time.

Playing Hardball - They won’t listen. What Next?

5. Call some other time - Some reps are helpful, so repeated calling will help most of the times.
6. Speak to a supervisor - This won’t help much, but you can give it a try. Supervisors are specialized in dealing with irate customers and will not be of much help.
7. Loyalty Threat - Tell them you have been a loyal and long time customer and you will be disappointed if they do not honor your claims
8. Contract Termination Threat - Tell them you will terminate their service if the issue is not resolved. But do not cancel the service on the same call. Call at some other time and ask them to terminate the service as the very first thing. When they ask for the reasons, explain your problem. Your case will be considered more favorably now. Do NOT terminate the contract before you have completed remaining steps here.
9. Badmouthing Threat - Warn them that you will drag them through the mud by publicizing your bad experiences. You should be willing to report the problem to news papers, TV channels, online discussion forums, blogs and finally set up a website and collect all similar experiences about that company. Check out this video - how one homeowner won his insurance claims with the help of a TV channel
10. Official Complaints with BBB - You can complain with Better Business Bureau (BBB), which will be happy to resolve the complaints and mediate between businesses and customers. BBB is not a govt. organization but it does promote integrity and business ethics in the marketplace. It will also keep public records of all complaints and companies do not want to be blacklisted there.
11. Official Complaints with State Attorney General Office - If you honestly believe that you are victimized by a business, lodge a complaint with the attorney general’s office. They will launch an inquiry. Nevertheless, you can threaten your insurance company about that you will contact attorney general’s office.
12. Law Suite Threat - Threaten them with personal or class action law suite. Do not use this threat unless it is really necessary. Most of the companies have their position covered legally and this may not work unless they are engaged in unlawful practices

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Do I need home warranty?

Many homeowners do not need home warranty at all. With some planning and learning about your sweet and neat home, you can save some money. Get your home inspected by a reputed home inspector and obtain a detailed report. It will help you decide whether you need home warranty. Feel free to ask home inspector’s opinion about the need to buy warranty.

You definitely need home warranty-

• if any of your big ticket appliances such as air conditioner, water heater etc. are about to reach the end of their life cycle and there is a fair chance that you will need to replace them.
• if you do not want to get your hands (and mind) dirty when something breaks down.

You may need to consider buying home warranty-

• if your house is older than 10 years and you have been spending some money on maintenance
• if you are financially not prepared to handle major expenses when a system break down
• if you do not have a trusted service contractor and do not want to go through the pains of calling contractors from Yellow Pages
• if the appliances are not maintained properly

I don’t want to buy home warranty. What next?
Okay, if you decide not to buy home warranty, then follow these steps

1. Look around, get references and settle with a good plumber in case of emergency. Shop around and negotiate the rates if you can. Have a backup plumber contact.
2. Learn a little more about major appliances and pay attention to their maintenance needs. Regular maintenance is a must if you want to live without home warranty. Visit the Maintenance Tips section of our website to learn more.
3. t is a good idea to get your major appliances such as heating/cooling systems inspected by a professional every 2-3 years, if those systems are old.
4. At the beginning of each year, re-assess your home warranty needs and you may decide to go with a home warranty policy if necessary
5. Every year, save what would have been your home warranty premium costs in a reserve fund, so that you don’t have to scramble when you need a major repair/replacement. This advice is for those who do not have adequate emergency cash reserves. Others, invest your hard-saved money elsewhere for better returns.

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Home warranty buyers guide

When you are ready to buy home warranty insurance, follow these steps that are intended to help you chose a better service. The important step is to find a reputed company in your area. However, that is also the most difficult part because most buyers do not have great opinion about any one company in particular. We have started collecting provider ratings from our website visitors, but most of the ratings given fall below 3 (out of 5) for all warranty companies. That means, along with rating, buyers will also have to consider other factors such as annual premium, deductible costs, appliances coverage and of course small prints in the contract. Read on…

Very first step is to decide if you need home warranty. Check this article “Do I really need home warranty” on this site and review the checklist. Get a detailed home inspection report on your existing house from a third party inspector. This report will help you understand the potential and existing problems with your appliances and will also help you decide if you need home warranty. If some appliances are aging and need special attention, be sure to check if the warranty company provides sufficient coverage for those appliances.

Make a short list of 3-5 companies that match with your needs. You can use our Reviews section to identify few providers based on premium, deductible, coverage effective dates etc. (Please note that our list covers most of companies that have nationwide coverage and it may have missed local warranty providers.)

Check with your friends and colleagues as to which providers do they use. Be sure to ask about their satisfaction levels with service and claims processing. The may some comments about customer service, contractor turnaround, quality of work etc.
It is important to choose a company that has a decent track record in this industry. Many consumers are dissatisfied with the services offered by many home warranty companies and it is indeed difficult to deal with some companies when it comes to claims processing. It is not easy to find a perfect home warranty company, but you can always chose a company with least number of complaints. There are several ways to research.

1. Use our rating table to learn the ratings given by our users. We are in the process of adding discussion forums and rating systems. Please check back later
2. Check company’s track record using trade organizations such as Better Business Bureau
3. Research the company over the Internet for any negative reviews. Insurance discussion board in scam.com has the list of complaints against many home warranty companies. www.ripoffreport.com is another website for lodging complaints.
4. Your real estate agent will also be able to provide the name of few reliable warranty companies in the area

Determine if you need extra coverage. Most basic plans do not cover clothes washer/drier, second set of equipments (second refrigerator), pool/spa equipments, computers etc. And some plans also exclude air conditioning, roof, etc.

Now, start calling the companies and make notes of their offerings. Be sure to collect information such as -

• Annual premium

• Deductible per incident (Trade service call fee)

• Average turnaround time for repair handling

• If you have determined that you need extra coverage mentioned above, check how much extra would it cost

• If you have any aging equipments reported in your Home Inspection report mentioned earlier, be sure to check if the warranty company provides adequate coverage for those equipments

• Is coverage effective immediately upon buying the policy? (only matters if you need immediate coverage)

• Ask for clarifications and contractual obligations. Observe how they are treating you, which is a good indicator of how the company treats its customers after sale.

Finally, glance over the contract terms when you are ready to buy the coverage.

Now you have completed your due diligence part. We hope you will also have gained knowledge about home warranty coverage in this process. Having a better idea about your coverage helps you when you are dealing with the conflicts with warranty companies.

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Things you must know about home warranty

What exactly is home warranty insurance?
Home Warranty is like insuring the appliances at your house. When appliances or systems breakdown, the insurance company repairs or replaces the equipment. In most cases, newer homes do not require home warranty, because appliances are not likely to replaced and the total cost of all minor repairs is going to be less than the cost of buying home warranty, in a given year.

Good

• You are buying piece of mind. If a major appliance/system needs to be replaced, someone else pays the bill
• Whenever you need a repair service, you just call home warranty company and pay your flat deductible amount (generally around $50), no matter how many hours it would take to fix the system.
• When you sell the house, the buyer will be happy to know that your appliances are insured, since the warranty will be carried over to the new owner.

Bad

• You will pay a deductible in the range of 50 to 100 dollars, per repair incident
• Most companies do not allow you to report multiple problems under one incident, so you will deductible for each repair. So, if you have a minor plumbing issue and a minor electrical repair the same day, you will pay deductible twice! In some cases you are better off by not involving home warranty company.
• You will pay insurance premium anywhere from 500 to 1000 dollars per year. If you are not likely to need system replacements, you can save money by hiring contractors directly

And the Ugly

• Many consumers have had bad experiences dealing with the claim processing. Insurance companies use some small print clauses to get away without helping you when the project expenses run high. The most common complaint is that the insurance company rejects your claims when they decide that you have not maintained the equipment properly.
• Home warranty companies will always try to repair, not to replace the system. That means you will have to live with the inefficiencies of the old system, plus you keep paying deductibles every time it needs a repair.

Always remember, most of the contracts do not cover system or appliance failures due to lack of maintenance

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