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Home warranty-- what a scam!

Posted by lovingroyaloak (My Page) on
Fri, Aug 4, 06 at 11:13

Just a warning for those of you out there...we recently utilized our home warranty and had to pay a $100 deductible to a heating/cooling company to come out and inspect our broken air conditioner (lived in house 4 months).

The home warranty people (seperate from the heating/cooling company) then told us that what was wrong with the air conditioner wasn't covered by the warranty! (it has rusted out, basically). The rep read the "fine print" part to me.

They then told us that the heating/cooling company could replace everything for $5500.

As you can imagine, we are furious!


Follow-Up Postings:

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RE: Home warranty-- what a scam!

What was the "fine print"? Did you read it yourself? Make sure that fine print is actually IN your warranty.


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RE: Home warranty-- what a scam!

Sounds like your home warranty company is HMS...


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RE: Home warranty-- what a scam!

How did you know? It is HMS. Have you also had a bad experience with them?


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RE: Home warranty-- what a scam!

Last week I had a roof leak. The house is now out of the builder's warranty but under the 2/10 Company warranty. They don't cover roof leaks conveniently and have heard from a neighbor that something they needed to have done wasn't covered either. Luckily the builder fixed the problem for me anyway free of charge and fixed it quickly at that. But I'm convinced those warranty programs aren't worth the paper they're printed on.


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RE: Home warranty-- what a scam!

First time poster. We just closed on our house June 8th. Within two weeks the air-conditioner bit the bullet. Dragged out the home warranty (house was only 5 yrs old). Mind you, we live in Las Vegas and it was 112 for the entire week. Monday I called warranty co, they gave me two numbers of local repair places that they use, first woman said couldn't get someone out for 4 days, second co says can't give you an exact time or day when we can get out. I was furious. I mean I expected a day or two, not four days. To save ourselves the aggravation we called our own guy and had the system replaced the next day. Home warranty = waste of $$$$.


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RE: Home warranty-- what a scam!

The buyers threw in a home warranty when we purchsed this house. Since the house and it's systems were 12 yo, we were due for some problems. We had 2 appliances, gas furnance, and AC go out in the first 18 months. Sure, we had to pay a $50 service call fee but parts alone would have been several hundred dollars plus labor.
The tradeoff is sometimes you have to wait for service, which you do anyway unless you have a prior relationship to the repair company. Other times, I've had a service call made the same day I called.


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RE: Home warranty-- what a scam!

We had to use our home warranty the first year we moved in with some electical wiring. I started reading the fine print on ours and it was ridiculous! It almost seemed like it said "unless your problems happen on a Tuesday while it's raining on even months, it's not covered" Luckily ours was covered (don't know how that happened!) and we just had to pay the $50 service fee. I don't think they're worth the paper they're printed on either.


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RE: Home warranty-- what a scam!

We needed a new water heater because the unit was not putting out enough water for a single shower. Poor 90 yo father-in-law would freeze! So we read our warranty and learned that the working parts have to stop working for the warranty to work. In other words, low hot water output does not qualify as "not working". We replaced it ourselves.

Last week I heard a waterfall sound from the basement and checked it out. The sound was coming from inside the cabinet of the furnace/air conditioning cabinet. DH called the next day and got the name and number of their contract HVAC guy and he came out the next day. Only a plugged drain. The tech only charged $70, instead of the $95 the HMS the warranty called for. I guess I can be happy that the unit did not need major repairs. At least DH learned that there is a drain, it can plug, and where it is!


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RE: Home warranty-- what a scam!

We've had home warranties on our last two houses. Service call was $45. We had several major repairs made and really had not problems with it. The biggest problem was on our dishwasher parts (not labor) were still under the dishwasher warranty so we had to order those parts and then home warranty installed. That was a big delay.


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RE: Home warranty-- what a scam!

We also had problems with our home warranty (AON) but luckily the seller's agent worked with our buyer's agent to get what we needed. Our A/C went out about two weeks after we moved in. It took two weeks to get someone to look at it. They claimed to have fixed it. Then a month later, the A/C broke down again. Another two weeks before someone could look at it. Different A/C company. They fixed that. Two weeks later, A/C breaks down for the third time (!). This time the technician came the next day. He told us he couldn't fix it because it was a maintenance issue !! Charged us the deductible anyway. My husband called AON to complain and they then allowed that if the A/C isn't working then it had to be fixed so they called yet another A/C company to look at it. This one said the A/C had to be replaced. AON said they could replace it but they only covered about $800 so we had to fork over $3500!!

That's when the RE agents got involved. Two weeks later, AON said they would cover all the costs of replacement IF we went with their stuff or we could get cash. We grabbed the cash.

I'm just grateful that the agents on both sides of our home purchase transaction went to bat for us. I don't know how common that is. It certainly got things going for us


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RE: Home warranty-- what a scam!

Well, I was convinced our home warranty, thrown in by the sellers, would be worthless.

I was wrong!

Our a/c broke (crack in the evaporator coil pan) and I carefully checked the fine print and it wasn't clear about whether it was covered or not, so I called them and asked if it was covered. Turns out it was.

I paid 45 dollars to have their guys come out and take a look at it. As it turns out, I didn't like the guys that came out and I called the warranty company back (American Home Shield) and said, they're idiots, I don't want them in my house (I have a rudimentary knowledge of HVAC).

They said, "Oh, would you like the cash option?" I said "heck yeah!" (I had no idea there was a cash option). They told me how much they'd pay the idiot to come out, and that they'd send me a check in that amount, and to fax them the invoice from my ac guys once it was fixed.

So, it ended up costing me money, but I got the repair done with the people I wanted to use, and from my perspective got a big discount on it because of the warranty.

Some tips:

1. Call the company first and ask if it's covered before they send someone out.

2. Ask if there's a cash option because they use the cheapest idiots to do the job.


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RE: Home warranty-- what a scam!

I just had a new hot water heater put in by AHS, but I really had to work for it. Took them several times to come out and try to piece it together, but overall, I think I'm still in the black with the whole home warranty thing. I just had to pay extra to bring it up to code, but I can see why they wouldn't cover that. I've always been a little leary about the heater/air conditioner thing, but I hear as long as you have it serviced regularly, they will honor their end of the bargain.

I don't like the way they won't finish plugging up holes that their plumbers make. They left a pretty good mess on one plumbing visit and it took me a while to fix it between the baseboard and the spackling. They only do "rough finish" work.


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RE: Home warranty-- what a scam!

CHECK THIS SITE OUT:
http://hmsfraud.com

Here is a link that might be useful: http://hmsfraud.com


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RE: Home warranty-- what a scam!

Wait a minute--that link hmsfraud doesn't work and the guy just joined. What's that all about?


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RE: Home warranty-- what a scam!

I've heard several complaints about HMS. I've never had a problem with AON myself. AHS gave me a little bit of trouble but eventually I got them to see my side. They will usually deal with RE agents because if they are bad for customers, they will definitely not get any recommendations from us.

Here is a link that might be useful: Home Warranty Reviews


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RE: Home warranty-- what a scam!

He sounds disgruntled.

I always found the home warranties to be more trouble than they're worth with the problems I had, but when I moved into my new place and we couldn't get the furnace started, they did manage to get someone out there on a Saturday on short notice. (We got it escalated to an "emergency" because we had a baby and it was cold.)

Even so, they were a pain in the rear to deal with...but we got our short-notice Saturday repair, and the service fee was still slightly less than the motel room.


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RE: Home warranty-- what a scam!

Here are some other Home Warranty Companies. I'm not affiliated or have any interests in these companies, FYI only.
http://www.2-10.com/

http://www.blueribbonhomewarranty.com/

http://coldwellbankeronline.com/custommodules/content/homewarranty.aspx


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RE: Home warranty-- what a scam!

A couple not agree more. I had my Hot water heater go out and it took 20 days to get it fixed. I have 2-10 as my company, sellers of the house gave it to us with the sale. Nice thought, bad pick. I did find a good source of help in fighting with them while I was working through this. Site was www.homeshieldscam.com. Site focuses on trying to keep these companies honest by educating consumers. Link to the 2-10 page that I used is attached below, they have info on a lot of other companies though, so hunt a little if you can't find what you are looking for.

Here is a link that might be useful: 2-10 Home Warranty Scam Link


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RE: Home warranty-- what a scam!

I myself have had very good involvements with Home Warranty Companies..Central Mass Home Warranty has helped my wife and i for the last 3 homes we owned..Not only are they service friendly But they also have a Claims Limit of $5000. this saved us one year when our well pump died and we needed the whole thing replaced..They changed it out within 5 days at $3800 bucks....Most warranty companies Claims Limit is less than $1500..

Here is a link that might be useful: Home Warranty


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RE: Home warranty-- what a scam!

They are not actually warranriews, but tightly written service contracts.

Many of the companies will repair over and over if it is cheaper than replacing.

The contract then expires and the owner is still left with replacement costs.

They are (at best) a marketing gimmick.


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RE: Home warranty-- what a scam!

I disagree as a 'Marketing Gimmick'..I do agree there are 75% of these companies cant afford to pay their rent ..BUT the other 25% of these companies are legitimate corporations in which some are accredited by the BBB..The top 30 companies all have something(atleast 1 good thing) about them...If they are not accredited by the BBB and with atleast some good reviews then i would never chance a contract withg them...

Any one loking for a quality warranty shall most certainly google the company name for complaints and or scams ...

Here is a link that might be useful: Quality Home Warranty


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RE: Home warranty-- what a scam!

Calling a maintenance contract a 'home warranty' puts it well into the area of gimmickry.

If "75% of these companies cant afford to pay their rent" that is pretty bad odds for getting anything truly useful.

They are a gimmick to try and create an appearance of safety for the buyer.


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RE: Home warranty-- what a scam!

The 75% Of this type of company are relatively new companies coming on board to try and open a new very large growth company in a very short period of time..Suprise!

Here is where things get complicated for them and sometimes can put them behind the 8 ball prior to having any customer growth..

First they have to obtain a 'Certificate Of Authority' In each and every state they decide to do business in or to sell warranties in.In order to get this document a corporation has to show proof of relatively high Liquid asset.Then have to also show Proof that they can operate efficiently and provide proper service to their customer base.They also have to have multiple other proof of operations and history of such. This Documentation has to be presented to the Division Of Insurance.The head Man himself has to sign this document personally. There is also a period of time before they can get this document(atleast 90 days)Then of course there is a FEE for this document .A non refundable $3500(approx)..

Large providers that are Nation Wide can usually support their call to action for service calls on account of the shear size of the corp.To begin with..The smaller providers with in 2-3 states are usually the ones to be careful of...Im not saying any of the Big or Small companies are Good Or Bad.I am trying to stick only to the facts here..

Here is a link that might be useful: home Warranty


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RE: Home warranty-- what a scam!

brickeyee: "They are (at best) a marketing gimmick."

As I wrote in the other thread about home warranties, I used to think so too, until I received a check for $2,714 last month from one for a 20-year-old wall oven that they couldn't repair because parts were no longer available. And I had already had several other items repaired or replaced during the course of my first year of ownership of this house. I'm glad the previous owner sprung for the $599 policy as part of the closing. My out-of-pocket expenses were limited to $55 service call fees.


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RE: Home warranty-- what a scam!

"As I wrote in the other thread about home warranties, I used to think so too, until I received a check for $2,714 last month from one for a 20-year-old wall oven that they couldn't repair because parts were no longer available. "

And for every repair that costs them more than the premium there are multiple others that are done in the cheapest way possible to avoid payouts.

These are money making companies, just like the rest of the insurance industry.
They have to collect enough money across ALL the customers to have any chance of surviving the few big payouts.


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RE: Home warranty-- what a scam!

I'd heard that we were supposed to call them service contracts, too, but I just looked at a brochure from one of the biggest ones, & it says "XYZ Warranty".

I love those things;
they are not insurance, as they don't replace like with like but with builder-grade (if you have a 50 gallon, $800 water heater, you'll get something like a $400 one), *but* they fill a gap in protection for homeowners.

If you have a loss that would be covered by your insurance, by all means turn in the claim;
your insurance company is designed to indemnify, ie, to put you back where you were before the loss, as nearly as possible & within the terms of the policy (you'd still have a deductible, for instance).

Depending on the company, you may also be able to add coverage for refrigerators, washers & dryers, pool equipment, etc.

but broken air conditioners, water heaters that wear out or overheat & burn out, termite infestations, broken dishwashers & ranges are not covered under your insurance policy.

If you have a warranty/service contract, you call in a service request, & a contractor will come out & repair or replace the item or, if you request, the company will write you a check for what they would have paid, & you can replace the item with a better-quality one if you wish.

The service fee, usually $60 to $75 in this area, is all the homeowner pays.

Years ago, when our Association first began urging us to place warranties (as they were always called then) on every home we sold, I had mixed emotions.

However, the very first time I placed one, the buyer dropped into the office in less than a year to thank me & the seller;
the air conditioning went out the first summer, & the company repaired it, & both water heaters had gone out & the company had replaced them.


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RE: Home warranty-- what a scam!

brickeyee: "And for every repair that costs them more than the premium there are multiple others that are done in the cheapest way possible to avoid payouts. These are money making companies, just like the rest of the insurance industry. They have to collect enough money across ALL the customers to have any chance of surviving the few big payouts."

You're statement that they have to take in more in premiums than they pay out is true, of course. Just as it is true with auto, home, and health insurance companies.

So, what's your point?


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Re: Home warranty-- what a scam!

sylviatexas: "they are not insurance, as they don't replace like with like but with builder-grade (if you have a 50 gallon, $800 water heater, you'll get something like a $400 one)...."

That wasn't my experience. As stated previously, they offered to replace my 20-year-old wall oven with a top-of-the-line KitchenAid appliance or the cash equivalent ($2,714). They also replaced a 20-year-old toilet that couldn't be repaired with a Kohler one-piece, low-profile fixture that also definitely was not builder grade.


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RE: Home warranty-- what a scam!

My daughter's recent experience with AHS, and mine throughout several years, have always been positive. She's had a troublesome 4 year old LG french door fridge. This fridge had replaced a 1 year old LG fridge that LG replaced - long common story - fire in the fridge. So...this replacement fridge had several service calls through AHS - finally it was determined that the part needed was no longer available - on a 4 y.o. fridge!! AHS offered to replace it in kind - that is, a current model stainless french door fridge, or the equivalent in cash. My daughter took the cash and purchased her own new fridge - only adding money because she went up to a 36" in size. NOT an LG!!

We've had several experiences with our HVAC system - AHS has always come through. When we had a problem with a room thermostat they replaced it with a very upscale digital model.

NAYY....just a very satisfied client of AHS.

Helene


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RE: Home warranty-- what a scam!

"You're statement that they have to take in more in premiums than they pay out is true, of course. Just as it is true with auto, home, and health insurance companies.

So, what's your point?"

That they are NOT in any way or shape a 'warranty', and marketing them as such is at best misleading.

If you want to sell 'repair insurance' under the guise of a maintenance contract, call the product what it is, a maintenance contract.

Sale would probably be less, and that is why the misleading name continues.

Just like the original name for Health Maintenance Organizations (HMOs) was 'prepaid medical care'.

It did not market well so HMO was coined.


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Home warranty

Bethesda,

You were very fortunate to have gotten upgrades, but I have a feeling it may have been somewhat accidental;
(the contractor had an extra on the truck?).
Every contract I've seen has been for builder-grade replacements.


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RE: Home warranty-- what a scam!

No, the contractors didn't have "extras on the truck." In fact, the contractors couldn't have immediately provided me with replacement equipment even if they wanted to. They both had to report the issues to the home warranty company and wait for the warranty company to authorize the replacements. And as I stated previously, in one case I took the money rather than the appliance.

But let me be clear: I did not get upgrades. What I received were replacements of equivalent value. I'm sure that if I had builders' grade equipment/appliances in the house, then that is what I would have received. My point is that the warranty company did not replace a top tier appliance with a builders' grade appliance.

I just pulled out my policy and here is the language contained therein:

"REPAIR/REPLACEMENT/UPGRADING: We have the sole right to determine whether a covered system, appliance or component will be repaired or replaced....We will not upgrade any covered item...We reserve the right to provide cash in lieu of repair or replacement...We are responsible for providing installation of equipment comparable in features, capacity and efficiency, but not for matching dimensions, color or brand."

As noted above, the policy states that they will replace equipment/appliances with comparable -- not lesser--equipment.

I don't know whether this language is unusual; all I know is that I was pleasantly surprised when I was offered my choice of either $2714 or a brand-new KitchenAid combination wall oven for my 20-year-old dinosaur.


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RE: Home warranty-- what a scam!

Being forced to use the Home Warranty's "authorized servicemen" is one of the main problems I've encountered. It seems to be a major issue with many of the complaints I've read, and in my own personal experiences as well.It appears this type of company has an excellent eye for picking from the bottom of the barrel when finding their service contractors.
For instance: the authorized AC "engineer" who had been assigned to my home operates from 45 miles away and has either tried to dodge my phone calls, kept me in limbo, missed appointment times etc for the last few months. On August 16th, he finally found the time to drag himself down to my house to install my new outside unit that had been ready for pick-up since August 5th. When I arrived after he'd left, the unit was leaning at a 25 degree angle, was placed about 2" away from our house, one end on the dirt, and the other on the concrete pad, was connected to the fuse box without a cap and the bare split wires exposed, plus he'd used higher powered electrical wire (60) connected to two different size and much smaller fuses! There was no insulation on the connecting pipes, and several other major issues, plus the cardboard box, the wood pallet, and all wrapping debris was all over my yard. I knew enough that from what I saw that it looked all wrong. After taking numerous pictures, I contacted my City Inspectors and they came out and said it was in no way up to code and was dangerous.
Come to find out, the "authorized" service tech hadn't even applied for a license in our City to do anything, and had no intentions of doing anything else until the next day (on 8/18 - two days later) - UNTIL - I told him that I was going to contact the State of Alabama Board of Heating & Airconditioner Contractors. The man was down in less than 30 minutes...
I'm ill with these people now because they have been patching (they call repairing)this unit since May, and we have been without airconditioner all summer long. I'm hot, I'm old, and I'm not putting up with this foolishness any longer.
Take good pictures of work these people do - before and after - call your city for license checks, check with your State to see if shoddy AC/electrical work can be reported -write or email the BBB and file a complaint and follow through, and make sure the work they do is up to code in your State. If the Home warrenty people continue to force "their authorized repairmen" down our throats then at least make sure these repairmen do it right.

Here is a link that might be useful: www.hvac.alabama.gov


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