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Home Warranty Plan Gotchas!

You are about to learn what most home warranty owners learn the hard way when they get their first "NOT COVERED RESPONSE!" from their home warranty company. Enjoy the 33 gotchas below and make sure to let us know if you have a gotcha or story of your own.

If you ever have any questions before you buy, remember to either call the home warranty company and ask questions or request a copy of the home warranty contract to review before you buy.

Again, if you need a home warranty, please support us by visiting the google.com sponsored links on the left. Use the knowledge you learn here to help you get the right home warranty, from the right company at the right price.

Also, make sure to review our Disclaimers and Copyright Information at the bottom of this page.

Avoiding the Home Warranty "Not Covered Response!"

There are some CRITICAL things you need to be aware of before you proceed with your home warranty purchase. They will make the difference between a home system or appliance being covered or not covered.

Let’s Start With Some Common Examples:

Home Warranty Air Conditioner Nightmare - NOT COVERED

You move into your new house and the air conditioner stops blowing out cold air intermittently. You call the home warranty company 800 service number and they send someone out to fix it. The AC technician looks at the system and then comes back to you and says that is a burnt out wire and by the way, the coils are dirty. You would expect this to be covered? Well the wire may be covered in some cases, but cleaning the coils ($75-$300 depending on your location) is considered standard maintenance and is not covered by a home warranty plan. In addition, once the AC technician reports the cause of the problem and dirty coils, your home warranty company may not cover the cost at all and, in addition, tell you that the AC is now excluded from any future claims because of lack of standard maintenance. The home warranty company may tell you to check with your home inspection company.

Garbage Disposal Death- NOT COVERED

Your first night in your new home, you cook dinner, go to clean up the dishes and then try the garbage disposal and you hear a grrrrrrrrrrrrrr.... and then it stops and you hear a high pitched mmmmm... because the disposal has frozen. You say, "No problem, I will call the home warranty company." The next day, you call the home warranty company and they send out a plumber to fix it. The plumber proceeds to inspect the disposal and then all of a sudden he comes up with an unhappy face, and you ask "what is wrong." He comments that the disposal is frozen because of rust and it is not covered for the first 30 days on most home warranty plans. You say what? The home warranty company may tell you that rust is excluded for the first 30 days and you should go back to your home inspection company.

The BIG HOME WARRANTY PLAN GOTCHAS!

These are some of the most common issues that new home warranty plan owners may encounter. You cannot fault home warranty companies, as they do a great job in their home warranty plans/contracts explaining what is covered and what is excluded. Our only complaint is that the type in the contract is so small that you need a magnifying glass to read it.

Click on the individual gotchas or scroll down to read them all.

  1. Home Inspectors - You get what you pay for!
  2. Keep up the standard maintenance on appliances such as air conditioners and heaters!
  3. Rust and corrosion are usually excluded for the first 30 days or excluded all together!
  4. The service technician may be wrong and trying to take advantage of you!
  5. Never get anything fixed without the home warranty company’s approval!
  6. There may payout limits on the total policy and individual home systems and appliances!
  7. Are you getting the best plan? Is your Realtor, Title Company, or Mortgage Company getting a kickback on the home warranty!
  8. Make sure multiple items are covered!
  9. Refrigerator ice crushers are almost always excluded on existing home contracts and available on contracts purchased through new home escrow!
  10. Refrigerators are usually only covered while in the kitchen!
  11. Residential properties used for commercial purposes are ineligible in most cases!
  12. Home systems and appliances classified for commercial use are usually not covered! Check with the home warranty company to verify make and model.
  13. Coverage for plumbing stoppages may only be available for new homes within the first year! Check your home warranty plan.
  14. Watch out for the renewal rate (Sucker Rates)!
  15. Do you have a 30 day guarantee?
  16. Mold is not covered!
  17. Home warranty claims do not get reported on your C.L.U.E. or APlus homeowners report!
  18. Does the seller buy the home warranty?
  19. Getting around the "NOT COVERED RESPONSE!"
  20. Calling in a claim!
  21. Can you add coverage's in the first 30 days?
  22. Is your home warranty an insurance product?
  23. What is the warranty period on a repair?
  24. Is damage caused by roots and freeze covered?
  25. Is an above ground pool covered?
  26. Is there more than one Payment Method?
  27. What if I have to replace and item can I pay the difference for an upgraded item?
  28. What if I have an older home with a Steam Broiler and radiators in my rooms?
  29. Are galvanized pipes covered?
  30. What if a code violation is discovered or the building codes have changed?
  31. Are shared water well pumps covered?
  32. Are water source heat pumps covered?
  33. How much money will a home warranty company pay to fix a well pump?
  34. Is aluminum wiring covered?
  35. Are separate structures covered?

Gotcha #1: HOME INSPECTORS - YOU GET WHAT YOU PAY FOR!

One of the most important things you can do is get a REALLY GOOD home inspector. You can ask your realtor for a recommendation or maybe look to a local Home Inspector Association. One visitor mentioned checking out the American Society of Home Inspectors and their local associations. As of 2005 many states are now regulating home inspectors. Check online to see if your state has resources to check out your potential home inspector before you hire them.

The home inspection should take 1.5-3 hours depending on the size of the house. You also need to ask your home inspector what the recourse is if they miss something that is not covered by the home warranty company. In most cases, you will get the actual report from the home inspector company days later and if you read closely, you will see that it is full of disclaimers. Remember, having the right inspector could save you thousands later! Some home inspectors bring all the equipment necessary to actually printout their report with digital pictures right there at the home.

Know who your home warranty company is and give a copy of the contract to the inspector and make sure the home inspector checks carefully the areas that are excluded and the areas that would cause an item to be excluded for lack of maintenance. Be sure to read the home warranty contract and ask the inspector questions.

Make sure the home inspector checks the AC thoroughly and most importantly the coils. They should stick an electronic thermometer to each vent to ensure adequate cool air is coming out and that there are no ducting issues (leaks, collapses, or blockages - may be excluded by the home warranty plan). If the Home Inspector has any concerns, hire an AC/Heating company to come out and evaluate the system.

The home inspector should have a digital camera and give you pictures of all the code issue areas. For example, if there are exhaust fans in the attic, bad construction, wiring issues or other problem areas. This provides you documentation in areas that are hard-to-access.

When the inspector gives you his initial report, get it as detailed as possible. Ask the seller to fix or replace anything that is excluded in the home warranty or that may lead to a pre-existing condition.

For you protection, you may want to ask your realtor to ask the Seller for a C.L.U.E. report which provides detailed insurance loss information on the home.

Remember, if it is noted in the inspection report, it is considered a pre-existing condition unless fixed. In most cases, the home warranty company does not require an inspection report, but if an issue does come up, they may request it. Back To Gotchas...

Gotcha #2: KEEP UP THE STANDARD MAINTENANCE SUCH AS AIR CONDITIONERS AND HEATERS!

We highly recommend you find a local AC vendor and obtain an annual maintenance contract. The price for one of these contracts is usually $25-$75 a year. Twice a year the vendor will come out, inspect and maintain your heat and AC units. This is much better than waiting for the summer and winter when everyone else is calling. Back To Gotchas...

Gotcha #3: RUST & CORROSION ARE USUALLY EXCLUDED FOR THE FIRST 30 DAYS OR EXCLUDED ALL TOGETHER!

This is a very common issue and this is why it’s excluded in the first 30 days on most home warranty plans. Some home warranties exclude rust and corrosion all together. The odds are that you will encounter a rust or corrosion problem during your normal daily use of items in your new home. Examples include the garbage disposal and water heater depending on the water quality/source. Back To Gotchas...

Gotcha #4: THE SERVICE TECHNICAN MAY BE WRONG AND TRYING TO TAKE ADVANTAGE OF YOU!

The old saying, "trust your gut" is still true today. We have all watched ABC’s 20/20 and Date Line where they catch these scam artists on camera. Unfortunately, there are people representing companies that may not be ethical in their responsibilities.

The better home warranty companies use a very thorough screening and follow-up process on the vendors they use to service their clients. Many companies through acquisition or merging have built their own network of service companies.

With a home warranty company, the recommendations of the service technician are what are put in the system and what the home warranty company goes with. If you have a dispute, it is your responsibility to hire another service company to come out and give you a second opinion. If that service technician disagrees with the home warranties recommendation, you can then call them with the results and they may cover the costs.

If you still do not feel comfortable with the service technician sent out to your home, we recommend calling the home warranty company and explain your position. Go into another room if you have to. Back To Gotchas...

Gotcha #5: NEVER GET ANYTHING FIXED WITHOUT THE HOME WARRANTY COMPANY'S APPROVAL!

If you look at your contract carefully, you will see that your home warranty company will not pay a claim unless you call them first. Back To Gotchas...

Gotcha #6: THERE MAY BE PAYOUT LIMITS ON THE TOTAL POLICY AND INDIVIDUAL HOME SYSTEMS AND APPLIANCES!

If you are getting a home warranty from the seller, make sure you check carefully the limits on the various items. For example, on the pool and spa equipment, you may only get $1,000 total. Back To Gotchas...

Gotcha #7: ARE YOU GETTING THE COMPANY PLAN? ASK YOUR REALTOR, TITLE COMPANY, OR MORTGAGE COMPANY IF THEY ARE GETTING A KICKBACK ON THE HOME WARRANTY!

We feel that your Realtor, Title Company, and Mortgage Company should be neutral and never accept a kickback for liability reasons. You want to ensure you are getting a recommendation based on the best home warranty for your needs, not the one they get paid on. To avoid the liability issues, many realtors will recommend three home warranties instead of just one. Or we are finding that many realtors will recommend you to HomeWarrantyExperts.com.

Today, some home warranty companies are not providing incentives to the realtors.

Now if your realtor does recommend you to one, make sure you go back to the realtor if you have any problems. They may be able to contact their local sales person for help. Back To Gotchas...

Gotcha #8: MAKE SURE MULTIPLE ITEMS ARE COVERED!

Most home warranties cover multiple items like AC/heat units for no additional charge. On the other hand, many companies require a separate charge for each. The key here is to make sure you have coverage on all the units. Back To Gotchas...

Gotcha #9: ICE CRUSHERS ARE ALMOST ALWAYS EXCLUDED ON EXISTING HOME CONTRACTS, BUT AVAILABLE ON CONTRACTS PURCHASED FOR A HOME BEING PURCHASED!

Remember, there are two type of contracts. Real Estate Contracts - where a home is being purchased or sold. Existing Home Contracts - where you already own the home and go to get a contract. In some states, home warranties are insurance products and contracts only in other states.

Check your contract carefully on this one. Many companies offer additional coverage for a refrigerator and a separate charge to include the ice maker only on Real Estate Contract. Unless you read the excluded items, you will not notice that the ice crusher is almost always excluded Existing Home Contracts. Back To Gotchas...

Gotcha #10: REFRIGERATORS ARE USUALLY ONLY COVERED WHILE IN THE KITCHEN!

If you have a refrigerator in the garage and you purchase the extra coverage for it and think it is covered, you better check your contract. In most cases if a refrigerator is not in the kitchen, it is excluded. Back To Gotchas...

Gotcha #11: RESIDENTIAL PROPERTIES USED FOR COMMERCIAL/RETAIL/OFFICE PURPOSES ARE INELIGIBLE IN MOST CASES!

Make sure to check with the company or your contract for details. Back To Gotchas...

Back To Gotchas...

Gotcha #12: HOME SYSTEMS AND APPLIANCES CLASSIFIED FOR COMMERCIAL USE ARE USUALLY NOT COVERED! CHECK WITH THE HOME WARRANTY COMPANY TO VERIFY MAKE AND MODEL.

Back To Gotchas...

Gotcha #13: COVERAGE FOR PLUMBING STOPAGES MAY ONLY BE AVAILABLE FOR NEW HOMES WITHIN THE FIRST YEAR. CHECK YOUR HOME WARRANTY PLAN!

Back To Gotchas...

Gotcha #14: WATCH OUT FOR THE RENEWAL RATE (SUCKER RATES)!

Ok so the initial rate looks great! Make sure you know what the renewal rate is. Some companies increase their rates $75-$150 or more upon renewal. Now you say no problem, I will switch companies. Well in this case, you would be going in under a plan for an existing homeowner and the costs are even more and there are limitations. TRUST US ON THIS ONE! Nothing in life is free! Home warranty companies understand their markets and expenses and set their plan costs accordingly. Unless you are real unhappy with a company it is usually cheaper to stay with the same company.

For many companies, the real estate (initial low priced) home warranty is a loss leader bringing new clients and renewals at higher rates. Now you may ask, how do home warranty companies justify doing this. In many cases, you only find this on new homes as the risk of a claim is much less. This is because the home is inspected closely by an appraiser and and inspector in most home sales. Now compare this to a person calling up and signing up for a home warranty when they need it. Hum? Get the point? The risk is much higher and the home warranty company has no idea what the condition of the home is. Back To Gotchas...

Gotcha #15: DO YOU HAVE A 30 DAY GAURANTEE?

Not many people know it, but most home warranty companies come with a 30 day money back guarantee . If you are unhappy, express your feeling and see if the company will correct the problem. If they do not, exercise your right to cancel for a refund. Back To Gotchas...

Gotcha #16: MOLD IS NOT COVERED!

You are most likely aware that as of today, most homeowner insurance companies are excluding mold coverage. Do not make the mistake of thinking your home warranty will cover it. It you think it does, read your contract again. If you’re still not convinced, call the 800 service number for the home warranty company. Back To Gotchas...

Gotcha #17: HOME WARRANTY CLAIMS DO NOT GET REPORTED ON YOUR C.L.U.E. OR APLUS REPORT!

You may have heard by now that many homeowner insurance companies are canceling some clients because of claims. Well the good news is that currently, to our knowledge, no home warranty claims are not reported to any central claims database. Back To Gotchas...

Gotcha #18: DOES THE SELLER BUY THE HOME WARRANTY?

It is customary in most real estate transactions that the seller provides a credit back to the buyer for a home warranty. The buyer should always ensure they have the right to select the home warranty plan. Your realtor may make a recommendation of one to three companies or HomeWarrantyExperts.com to avoid liability issues. Since some realtors get a kickback from the home warranty company, we always recommend you ask your realtor these questions. Do you get a kickback on this warranty? Second, ask if they use that home warranty company themselves. You may be surprised at the responses. Do your research and get the right plan for you. That is where HomeWarrantyExperts.com can help you. Back To Gotchas...

Gotcha #19: GETTING AROUND THE "NOT COVERED RESPONSE!"

So you are a new home owner and you were just told that your home system or appliance was not covered due to lack of maintenance. You will probably be upset at the home warranty company, the person who sold or recommended the warranty to you.

Not all is lost!. Here is what we recommend you try. Depending on what home system or appliance is having the problem, review your contract on the exact specifics of what is excluded and why. In many cases, it may be easier for a home warranty company to deny claims up front, because most people will not escalate to a manager. Ask the manager what the dispute process is and what other people have done in this case to successfully get the problem resolved. Back To Gotchas...

Gotcha #20: CALLING IN A CLAIM!

If there is one thing you remember from this site, please print, highlight and then underline this one.

How the claim call works. When you call the 800 number for service, the home warranty customer service representative will identify themselves to you. Make sure you always write down their name and id number. Their job is to screen all calls and determine if the broken home system or appliance is covered by your home warranty.

REMEMBER, every word you tell the customer service representative is logged into the computer for reference to this call and future calls. If they feel there is any doubt, they may tell you the broken home system or appliance is "NOT COVERED!" If the item is covered the customer service representative will schedule a technician to contact you.

The technician will contact you and come out to your house to repair the home system or appliance. Now these guys are usually very familiar with the home warranty plans and will know if the problem is covered and will be very helpful. Most technicians are honest and work hard to make sure you are getting the best value out of the home service contract.

On the other hand, there are always small percentages of bad technicians that slip through the screening and will try to take advantage of the client. For example, an AC unit is on the roof and the service technician says the coils are dirty when in fact they are not. This example came from a retirement community in Arizona.

Dirty coils are not covered by most home warranty plans and it may cost you an additional $120 for the AC technician to clean them. In addition, if you authorize the repair and pay the technician, and he reports it back to the home warranty company, they may decline all future AC claims due to lack of maintenance. If you are ever in doubt or feel the technician is not on the up and up, immediately call the home warranty company and ask for their recommendation before authorizing any repairs to be done.

In general, they may inform you that it is your responsibility to obtain a second opinion to validate your conclusion. You will have to pay for the technician, but if the home warranty buys in on the diagnosis of your technician, they will usually cover the item and have a nice talk with their technician. Now we want to be clear, this is a rare occurrence, but it does happen.

Another thing that may happen is that one service company may subcontract to another or there may be many hands touching the report before it reaches the home warranty company. You may have a great service technician that reports back one thing to their company, and by the time it gets back to the home warranty company for logging, the information maybe totally incorrect. ALWAYS keep your copy of the receipt and have the technician detail out their diagnosis.

If the item diagnosed reveals the item is covered, the technician will normally fix it on the spot. You pay the trade service fee and they are on their way.

So, as you can see, it is very important what you tell the 800 service line when calling in. We recommend doing the following as a guideline. First always review the contract for the area that is broken for included and excluded items. If the item is excluded why call it in and have it logged in the computer? You may want to call your own plumber. If you do call in a claim, answer all the questions honestly and do not provide your own diagnosis as you may be causing problems for yourself. Remember, many home warranty companies log everything.

For many home warranty companies, it is easier for them to deny anything not clear and hope you will not escalate or complain. If you feel the item is covered, ask to speak with a supervisor or what your means of escalation is. Make sure you understand that if you have the item fixed on your own without approval, the home warranty company may not reimburse you. Consult your home warranty contract.

ALWAYS be nice and professional when you are talking to the home warranty service folks on the phone. They are just doing their job. Keep in mind the home warranty company is not charging a lot of money for the plan and MANY people try to take advantage of them. We can tell you from experience, that being nice to people in general will get you amazing results. Remember, everything you say may get logged and the next person you talk to will be looking back at the history records. Back To Gotchas...

Gotcha #21: CAN YOU ADD COVERAGES IN THE FIRST 30 DAYS?

Did you know that if you are buying a new home and purchase a home warranty plan as part of closing escrow that many home warranty companies have provision to add additional coverage's within thirty days of plan inception? This is a MAJOR benefit to a plan. Most home warranties are thrown in at the close of escrow and the buyer has no idea what they purchased. Another case is many people buy homes on emotions and really do not know what is in the house until after they move in. Are you one of them?

Let us worry about getting you the right home protection plan and we will free up your time to focus on your new home. Back To Gotchas...

Gotcha #22: IS YOUR HOME WARRANTY AN INSURANCE PRODUCT?

For a home warranty plan to be considered an insurance product, it must be submitted to and approved the Department of Insurance for that state in which it is to be sold. To our knowledge, most home warranty protection plans are not insurance products. The one benefit of a home warranty plan approved by a Department of Insurance for a state is that you, the consumer, has an avenue for complaints. Let also be clear, the Department of Insurance in most states take insurance products seriously. Back To Gotchas...

Gotcha #23: What is the warranty period on a repair?

Review your contract carefully. In most cases, you get a 90 day warranty on parts and 30 days on labor. On day 31 you pay the service fee again if the warranty company has to send someone out. Back To Gotchas...

Gotcha #24: Is damage caused by roots and freeze covered?

Once again, check your contract very carefully and you will find in most cases that any damage caused by a root or freezing conditions is excluded and not covered. Back To Gotchas...

Gotcha #25: Is my above ground pool covered?

In many instances you will find that above ground pools are covered. Normally the heating and filtration components are covered. You will usually find that the liners, covers, fill valves, and underground components are excluded. Back To Gotchas...

Gotcha #26: Is there more than one payment plan?

To be competitive, many warranty companies are now offer 1, 3, 4, 10 or 12 payment options. To help keep costs down, many prefer credit card transactions and will bill you based on the payment option you select. If a company does not offer payment plan options you should ask why and consider the answer carefully before signing up. Back To Gotchas...

Gotcha #27: Is there an annual limit on your plan?

Most plans do not have plan limits, however, most do have limits on specific items. For example on steam boilers you will usually find a $1,500 limit. Check the policy fine print and ask questions if you have a item that is not standard in most homes.Back To Gotchas...

Gotcha #28: What if I have an older home with a Steam Boiler and radiators in my rooms?

The cost to replace a steam boiler can start at $2,500 so many people buy a home warranty for this reason alone. You will usually find steam boilers in home from the 1930's - 1960's.

We recommend before buying any home warranty, call the company to make sure you understand what components are covered and their limits if any. In our experience, we find that if a home warranty company does cover a steam broiler, there is usually a $1,500 limit. Back To Gotchas...

Gotcha #29: Galvanized Pipes, are they covered?

We have yet to run into a home warranty company that does cover them. Let us know if you hear of one. Back To Gotchas...

Gotcha #30: What if a code violation is discovered or the building codes have changed?

Code violations are not covered. A common example is electrical wiring not installed to code. For example, on rolmex wiring splices in an attic, instead of using a junction box, someone used black tape.

On the other hand, if you have a covered item, but new building codes require additional parts, you will usually have the option to pay the service technician for the additional parts. The perfect example is older home may not have an earthquake strap on a water heater. If the water heater goes out, a service technician may be required by new building codes to install a earthquake strap. You may be responsible for the strap and the home warranty company will just replace the hot water heater.

Is some cases, the home warranty company may just cash you out. You then can work to bring required components up to code on your own. Back To Gotchas...

Gotcha #31: Are shared water well pumps covered?

Shared well pumps are generally not covered! If you do get a home warranty thinking that your shared well is covered, you may get a shock when a technician comes out to work on your well pump and notices multiple lines and coming out of the well pump. They may tell you it is not covered under the home warranty.Back To Gotchas...

Gotcha #32: Are water source heat pumps covered?

This is an area you really need to check the home warranty contract carefully. Almost every home warranty company excludes water source heat pumps.

Coming soon. Back To Gotchas...

Gotcha #33: How much money will a home warranty company pay to fix a well pump?

To keep it simple, a home warranty company will usually pay the maximum stated in the home warranty contract to remove the pump, diagnose it, repair it or replace it. For the best results, ask the home warranty company for the limits. Back To Gotchas...

Gotcha #34: Is aluminum wiring covered?

Coming soon. Back To Gotchas...

Gotcha #35: Are separate structures covered?

Coming soon. Back To Gotchas...

Coming soon. Back To Gotchas..

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* Copyright Information * - The information on this page is the intellectual property of HomeWarrantyExperts.com and should not be copied, reprinted or linked to without express consent from HomeWarrantyExperts.com. If you would like to reprint any of the information on this web page, please contact us at copyright issues. If you are aware of any violations of this Copyright, please let us know so that we can preserve the integrity of the information we provide to you our visitors.

* Disclaimer * - The information is this web page is for informational and educational purposes only and we offer no guarantee on its validity as it may apply to any new or existing home warranty contract. As you read this please keep in mind that all home warranty companies are not created equal! Each home warranty company has their own unique strength and weaknesses. Consult your warranty contract or look at the one you are interested in for the exact details on included and excluded items. These gotchas are presented to help you ask the right questions and help avoid a future “NOT COVERED RESPONSE". These are our opinions and experiences shared with us. Whenever you are unsure or have special needs, ALWAYS consult the contract before purchasing.

* NOTICE USE INFORMATION AT YOUR OWN RISK * - HWE does not guarantee, underwrite or approve contracts, or services provided by any vendor herein. Purchaser assumes all risks of any warranty purchased. Homewarrantyexperts.com assumes no risks for any of the content on any of the sites that we link to or that link to us.

Again, we state, the best thing you can do to ensure you get the right home warranty for your needs is to ask for a copy of home warranty contract and review it before you buy.

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