Are Home Warranties a Scam?

The purpose of a home warranty is to insure certain systems and appliances in your home after you buy the home, typically, for 1 year after settlement. Many policies will even cover the seller for a slightly higher price.  The typical cost ranges between $400-$500, depending on the company and the plan you choose.  Why would a seller give this to their buyer?  To make the home more appealing, an incentive if you will.

But if the intent of the warranty company is to do anything and everything to frustrate, discourage and refuse a claim, then is this system fraudulent?  A scam?  One has to wonder, given the recent set of circumstances I have encountered.

Client after client, claim after claim, I get complaint after complaint, regardless of the warranty company.  It’s always the same story. Rude and arrogant folks who left their customer service skills at their last job, probably a fast food restaurant, treat my clients like garbage. They tell them anything they can, in the words of my clients, to discourage the claim.

I’ve had enough.  After selling hundreds of home warranties in the past 3 years, as of today, I will no longer offer them. I have zero trust for their policies and procedures. I will also take this mindset a step further, and offer to any active listing the right to cancel their current warranty (on unsold properties).   What began as a great idea has turned into a customer service nightmare, and there is nothing more important in business than customer service.

If the warranty doesn’t do it’s job, then why have it? Are you a home warranty proponent?  No worry, you can order yours online- through your choice of company. I refuse to be associated with the  process, since I can’t “put my name” to it. My suggestion? Save your money, and get a home inspection. Some home inspectors will warranty their inspection for 90 days.

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