Are Home Warranties Becoming A Nuisance? Hometown Station – KHTS Radio

Home warranties is an industry that constantly finds itself in controversy. A seemingly good idea has been corrupted by many, and the good intentions of citizens looking to be financially responsible has backfired.

There was never really a time where home warranties had a good reputation. It is arguably getting better, but the industry is frequently let down by unscrupulous companies. Many have proven to be fly-by-night companies that are set up, take in as many premiums as they can and then close down unexpectedly, leaving customers hanging. In 2018, this happened with Secure Home Warranty, Allied Home Warranty, American Home Guard and Endurance.

Whist they loosely functioned for the time of operating, theyve reported to have handed out a lot of unexpected fees, delayed repairs and have been extremely poor in communication. Many turn to the BBB rating the Better Business Bureau which often provide low scores to such companies to give customers an indication of corrupt businesses.

The issue is that even the BBB, a non-profit started over 100 years ago which is considered to be a reliable, impartial customer protection organisation cannot be trusted itself. There have been many accusations that the BBB ask for a membership fee in an attempt to accept bribes for higher ratings. Many renowned businesses have been bizarrely poorly rated, and it has come out that they do not pay a membership fee. So now with even non-profit bodies not being trusted, home warranties can run amok. Again, Yelp has been accused of the same pay-to-play system, in which you cannot trust the very core of their value proposition (reviews).

The only thing left to gain some insight is customer reviews from their own experiences. Whilst some websites such as Trustpilot have been accused of taking down negative reviews and such, there are still many places where you can find the general reception for a company. Even using places such as Reddit and other social media can be useful.

The worrying thing about home warranties is that even the best companies still often have significant negative feedback. Theres no doubt that there are some legit, useful companies out there, but its becoming a real pain to find them.

Another example from what was previously touched on (scams and shutting up shop) is Secure Home Warranty. The Philadelphia-based company has been reported to have scammed over 160 customers through false advertising, charging credit cards unbeknownst to the customer, and wrongfully denying claims. This kind of behavior is exactly what is on the front of peoples minds when thinking about the industry.

There is a lawsuit aimed at Secure Home Warranty, in which they went out of business in 2017. We dont see traditional banks being set up and scamming the customer quite as often, which highlights a key problem in the home warranty industry: its young. Due to it not being around or established for very long, regulations are lacking and are varying widely across different states.

Attorney Josh Shapiro claimed [in a statement regarding Secure Home Warranty] These scammers left consumers out to dry by refusing to provide the services they promised, namely, 24/7 access to a claim center that would assist in the repair or replacement of systems and appliances.

Choice Home Warranty, a giant in the industry, is also being sued. The Arizona Attorney General Office has filed a consumer lawsuit surrounding fraud against the company. This is mostly on the grounds of alleged false promises made to customers, such as wrongful claim denials.

Going back to state-specific regulation, it may be that companies pray on the states that have loose regulations. In this instance, Choice home warranty review says they are unavailable in California, and so this may be a conscious legal choice instead of a business one.

Ultimately, home warranties have been good for some customers and bad for others. Almost any company, no matter how established, has negative reviews. This places an unfair but nevertheless real emphasis on the customers service-picking skills. It may be that if you live in a certain state that commonly sees home warranty scams, you may want to avoid them at all costs. Even the big companies will be enticed into foul practices if they see legislative liberties.

If you do decide to get a home warranty, it can be a successful experience. Youll need to find one with the least negative reviews, good customer service, little history of breaking promises and so on. Even then, there will unfortunately be an element of luck in the decision. Whilst on paper these companies are designed to put our minds at rest and our toolbox back in the garage, you have to be prepared for the worst.

Therefore, it would be wise to only take on a home warranty plan if it is financially sensible for you. If you can barely afford the premiums, then this might be a gamble in and of itself. Being denied a claim when youre $400 down on premiums is a surefire way to end up in an even worse situation. In this scenario, its better to have cheap, second-hand appliances that you fix yourself or replace.

Likewise, if youre extremely vulnerable and rely on the home warranties too much, this can also be stressful. For the elderly, the last thing they want to do or are prepared for is to fight for coverage claims. This isnt the peace of mind that you were promised. It can often be, but once you get to a stage of being very dependent, it may be worth being independent of them. At least a self-employed repairman isnt going to argue with you about the causes of the breakdown. Theyll just take your money, fix it and leave.

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Are Home Warranties Becoming A Nuisance? Hometown Station - KHTS Radio