Misleading Strategies on Home Warranty Marketing and How to Avoid Them

Home warranties are the ugly-but-necessary reality for many people in America right now. Anyone with a natural adversity to risk will likely be interested in them. Their appeal comes from covering yourself against huge one-off expenses in the home, such as plumbing issues or the gas oven breaking down.

Home warranties are essentially where the customer pays a monthly fee that covers many home items from breaking down. The fridge breaks? The home warranty company sends out a technician immediately and repairs or even replaces the appliance. You are shifting financial liability for the items onto another party; a particularly smart move if said home items are old and prone to breaking down.

The reason why home warranties are useful is the same reason why car insurance or health insurance is important. No one knows how large the one-off cost may be, and so even if the insurance premiums add up to slightly more, it will be worth it because risk, anxiety and budget planning is no longer necessary

The industry is going through a difficult time right now, though. There is a growing reputation that the industry is scammy, disingenuous and unreliable. There are an abundance of scams, Here are some of the tricks that are being pulled by home warranty companies:

• Refusing valid claims. Denying claims by customers who have experienced a breakdown in an appliance, on the basis that it isn’t included in their coverage, or that the appliance wasn’t maintained properly. This happened to a couple They were told that their Air Conditioning was inadequately maintained, and was thus refused to repair. They were then subsequently ignored by the business on a daily basis after trying to get in contact.
• Lack of responsiveness. When your boiler breaks down, or the AC, you expect it to be repaired within a couple of days at most. There have been a few horror stories proving some companies to take weeks to get repairs done. Often, this is blamed on the contractors.
• Coverage. There are some home warranty companies with a history of being extremely ungenerous when it comes to fine-lines of the terms and conditions, claiming certain things are not in the coverage when they appear to be. Looking through the T&Cs carefully is a must so you aren’t caught out.

Perhaps the worst one, which needs to be made more aware of so customers can avoid falling for this scam in the future is:

• Misleading letter. There have been several homeowners to have received a letter out of the blue stating their property’s home warranty has run out. The premise of the letter is fabricated, with it being received by those without a warranty. The number that is that of a home warranty company, who are fishing (or phishing…) to scare vulnerable people into running to the bank and handing over money to them. Aegis Home Warranty Group is one perpetrator of this and claim the letter is a marketing tool.

Whilst not all home warranty companies are a sham, many are. There are still some companies that are offering genuine value and reliable services, but finding them is the real challenge.

The most important thing is, whilst bearing in mind that no company can be trusted 100%, is to avoid being lured in by the above tricks.

Here are a couple of tips on how to avoid being scammed:

• A letter having no mailing address for the company is a red flag. Many companies won’t even use their company name or logo when fishing.
• The use of bright coloured paper (pink in the letter example above) they create an appearance of urgency, as well as an arbitrary deadline.
• Contact them. Don’t ever sign a deal with companies who contact you, this could be anyone on the other end of the line.
• Using word of mouth and online reviews, find the most reputable companies and rule out the ones with controversy. Some things are worth gambling for and insurance is not one of them (in fact, it is the very opposite of its purpose).
• Use a company that employs their own technicians. This avoids the situation where a repair is delayed and they blame it on the contractors or a third party. In-house technicians = no excuses.
• Read through the terms and conditions as well as any small print very carefully. This is the best way to mitigate the issue of breakdowns not being in your coverage.