You have probably thought about getting a home warranty cover, especially if you have heard a very good offer. However, is it a scam?
You may probably been familiar with the feeling of waking up suddenly in the middle of the night during winter season, and finding yourself freezing because your furnace broke down, or the fridge stops working and you are gradually up to your neck in perishable foods.
When you are a homeowner, you know that it comes with certain risks – among these infamous instances is trying to deal with expensive replacements and repairs when your household appliances or systems break down. Enter one guard home warranty and related services, which claim to be the ultimate solution to the problem. However, are they really worth the trouble? Or do you need to consider alternatives?
What are home warranties?
These are contracts that aim to protect a homeowner against any unexpected large expenses of repairs due to appliances or home systems breaking down. In this way, they operate in a similar way to standard warranties that you get when you purchase a product.
The sad news is many homeowners deal with home warranty scam artists, and they realize that they have wasted their money when tough times come by and they need help in claiming help. This leads to a negative perception of home warranty companies, which many home owners feel have wronged them when something goes wrong. The truth is more complicated though, and this infamous reputation is not always the case.
Why is the home warranty industry problematic?
When you think about it critically, any business that deals in any kind of insurance policy is problematic – they cannot cover everything. If the condition in question is already there before you get the cover, or in the case of manhandling the items, then that becomes a problem when you are trying to get coverage for your items.
There is also another issue that comes up when the company is taking care of your repairs. This is because part of the contract agreement involves that you must work with the contractors they choose, and this leaves you with a limited choice as to assessing the quality of work done and the precision of the assessment.
This policy also brings an additional problem with it – you must ask the warranty provider to assign a contractor to your case, and this might delay the time that an available contractor can come to resolve your issue. It gets even worse the more severe your issue is, and can mean that your home is unlivable for some time. For instance, when your air conditioning breaks down in the middle of summer, or when the plumbing system breaks down and you are without water.
The final aspect is that you cannot have a way of testing how well your warranty cover works, until something goes wrong and you have to use it. This makes it easy for con artists to scam you out of your money, as you cannot hold them accountable until they fail to deliver what was promised. In addition, this also means that if your appliances have never broken down or needed replacement, you may never know whether your warranty cover is a scam or not.
If you are a homeowner, the frustration is understandable – home warranty covers will tell you that you require them to shield you from certain costs, and you feel you need the protection anyway.
Benefits of home warranty covers
Even though there are scam home warranties that exist, you do not need to fear too much – home warranties can actually have very good benefits for you. One of these is the protection against extra costs of home repair, which can be very expensive and leave you broke for a significant period. For instance, when you are trying to repair a certain part of your home structure, the minimum cost to expect is $10,000 – but with a warranty cover, you will only pay a small part of this amount and the company takes care of the rest.
If you have very many appliances in your home, these can be very expensive to repair when they break down. Some homeowners, especially if they are new, might find an issue with a system in the house, or they are just unsure if the systems and appliances are in good working condition, so a warranty cover can give them some piece of mind.
It is important to weigh if the benefits of having the cover will outweigh the possible negatives. If you have budgeted for a large repair expenditure then home warranties are not really for you, while it may work for others who do not have larger budgets.
What about the negative side?
If you are not careful when reading your warranty contracts carefully, you can easily leave gaps in your coverage. This may make sense, until you realize that you can easily assume that you are covered in certain sections of your policy – until you discover that you are not.
The best instance would be repairing a system. Your initial judgment may lead you to believe that the system needs replacement – and you might be correct, but you discover that your warranty cover does not leave provisions for replacements. In that case, you only get repairs that act similar to a ‘band aid’ – temporary solutions that fail to solve the problem entirely. Because it is challenging to navigate these awkward situations, it is understandable that you feel scammed.
This is the major reason you need to take your time to make a decision. Reading the fine print is very important – yet your first instinct is probably to skip on the reading, quickly sign the agreement and move on. That will only leave you a frustrated customer in case something happens in the future.
It is also important to note that each policy is unique for every customer, so make sure you read carefully and clarify any gray areas.
The desire to have a home warranty cover is not a bad idea – but you need to be careful, as there are many con artists who seek to give the industry an infamous reputation. Looking through reviews from others, as well as taking the process slowly, will help you avoid being the victim of a scam.