Home warranty companies topped the Angie’s List worst-graded categories list in 2012 for the eighth-consecutive year. Read your warranty thoroughly and double-check what it actually covers and your deductible. Home warranties can protect you when you buy an existing home, especially if it’s older or the mechanicals haven’t been properly maintained or are outdated.
Warranties are not designed to act as insurance to protect homeowners from loss. Rather, they’re intended to provide service, repair or replacement on a home's appliances and major systems, such as heating and electric. Consumers have told us they’ve had whole air conditioning units replaced by home warranty companies. It all depends on your individual warranty and the company who provides it.
Grades on Angie’s List, the nation’s leading provider of consumer reviews, are based on overall experience, price, quality, responsiveness, punctuality and professionalism.
“For the 8 th year in a row the home warranty category has topped the most complained about categories on Angie’s List. When looking at the reviews the most common complaints we hear are in regard to people not understanding exactly what is covered in the warranty and then also the quality of the work when they do use their warranty,” says Angie Hicks.
4 most common complaints about home warranties:
- Homeowners don’t understand or feel misled about what their warranty covers
- Poor customer service
- Long wait times
- Issues with the quality of the work done by the contractors sent by the home warranty companies
Angie cautions, “If you are considering purchasing a home warranty you want to make sure that you really understand the contract. It all comes down to the contract so read the fine print so you know exactly what is covered, which appliances, what types of service calls will be covered and also understand the how the payment works. Is there a deductible and also, who makes the decisions about repairing or replacing.”
7 ways to get the most out of your home warranty:
1. If you are considering adding a home warranty or home service contract to your purchase, be sure to read the contract carefully. Find out what the warranty covers, and what it doesn’t cover.
2. 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, inquire about the company's status with your local consumer protection agency, as well as Angie's List.
3. Compare multiple policies, as coverage can vary significantly and check company reviews to find out as much as you can about other homeowners’ experiences with the warranty company.
4. If you have a service issue, ask for the names of three contractors they could send out. Then, research those contractors, call the warranty company back and tell them which contractor you prefer.
5. If your warranty is purchased through your real estate agent, tell your real estate agent about any denied claims. Oftentimes, he or she will have a relationship with the home warranty company and can make a call on your behalf.
6. If there are deductibles for service calls in addition to the initial warranty cost – typically between $350 and $500 a year – you might decide you’re better off without the warranty.
7. June, July and August are typically their busiest months for claims. To reduce wait times call late in the day or later in the week when call volumes are lower, provided it’s not an urgent issue. Also make service requests online or use an automated voice system.
When shopping for a good home warranty you want to find a company that covers all of the mechanicals of your home so you can be sure that you have an apples to apples comparison when looking at warranties. Does it cover the heating and cooling system, be sure you understand that part. Will they include an inspection before the warranty so you know exactly the condition of everything in your home? Also, do they have a low deductible and 24 hour customer service, because you never know when that water heater will break.
“There may be limits to your home warranty so it’s important to read the contract in its entirety. For example, maybe you have a plumbing issue that is inside the house the warranty may cover it, but if it’s the plumbing outside of your home it may not," Angie advises.
6 components of a good home warranty
1. Get an inspection before you sign: Many home warranty companies will advertise that inspection is not necessary. This leaves a large loophole for companies to avoid paying claims. Most warranties have a clause stating that pre-existing conditions are not covered. If the company doesn't inspect the home before you purchase your warranty, it's your word against theirs. Make sure a home inspection is included if pre-existing conditions aren't covered under the warranty agreement.
2. Appliance coverage: