While there are many reputable home warranty companies with satisfied customers who benefit from their services, there are some companies that take advantage of unknowing consumers.
Below we’ll explain why some people believe home warranties are a scam, which home warranty companies to avoid, what to do if you’re dealing with a home warranty scam, and how to find the best home warranty for your home.
You may have heard horror stories about home warranty companies that have been absolutely horrible to their customers. A dishonest company with a bad reputation and loopholes in their contract can create a sense of distrust among consumers and cause potential buyers to avoid these extended warranties altogether.
Below are the top reasons people believe home warranties are a scam:
Some of the worst home warranty companies have a track record of scamming their customers by creating false charges on their credit card, not addressing issues in a timely manner, having poor customer service, and charging too much in annual premiums and service fees.
Below are some of the worst home warranty companies in the industry that have recently gone out of business due to their unethical business practices:
If you’re a victim of a home warranty scam, report the issue to a law enforcement agency. This step is crucial because there are likely other people who have been scammed, and reporting the home warranty company in question helps these agencies collect accurate data on the number of people affected.
You can report a home warranty scam to:
To prevent being scammed by a home warranty company, there are a few steps you can take to help protect yourself, your home, and your finances.
Here are several questions you can ask to help ensure you won’t become a victim of shady business practices:
Though some home warranty companies are dishonest and should be avoided, not all home warranties are a scam. Many reputable home warranty companies have satisfied customers, high business ratings, and positive reviews.
These companies have responsible customer service teams, are responsive to claims, and send service technicians to their customer’s homes in a timely manner. These companies also have clear terms and conditions and expectations on what can be repaired or replaced while under warranty.
A home warranty can cover unpleasant (and unexpected) surprises when a major system or appliance breaks down. This home appliance insurance can also offer the following benefits:
Though a home warranty can save you time and money, there are a few disadvantages to enrolling in a plan:
Here are several steps you can take to find the best home warranty company for you:
Some of the best home warranty companies share the following qualities:
The most reputable home warranty companies have been in business for several decades, have established a good industry reputation, have a transparent claims process, offer flexible plans, and provide 24/7 customer service.
At House Method, we value trust and transparency with our readers, which is why we created an objective rating system and scored different home warranty providers according to our rating methodology. Our rating system involves a weighted, 100-point scale that scores home warranty companies on plans offered, coverage, state availability, cost, trustworthiness, customer service, and unique benefits.
Based on our research, here are several of the best home warranty companies in the industry:
A home warranty can be right for many homeowners because of the long-term cost value it provides. Many home systems and appliances aren’t protected under homeowner’s insurance, and as a general industry standard, most items have a lifespan of approximately 10 years and may need maintenance in between.
Buying a home warranty may be a smart purchase for:
Different from an insurance policy, a home warranty benefits consumers by protecting them from the unexpected expenses that are associated with repairs to appliances (i.e., washers, dryers, refrigerators, garage door openers, etc.) and other home systems (i.e., air conditioning, heating, plumbing, electrical, etc.). Also known as home appliance insurance or home repair insurance, home warranties save homeowners the headache of vetting a repair company.
The following home warranty companies have scammed customers in the past and have recently gone out of business: Service America, Endurance Home Warranty, Allied Home Warranty, American Home Guard, and Secure Home Warranty.
While the cost of a home warranty varies by company, most home warranty companies will charge an annual premium as well as a service fee any time a claim is approved or a repair technician is sent to your house for service.
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