You are about to learn what most home warranty owners learned the hard way when they got their first “NOT COVERED RESPONSE!” from their home warranty company. Enjoy the gotchas below and make sure to let us know if you have a gotcha story of your own.
The best advice we can give you is to call the home warranty company you are considering before you buy, ask your questions, and then request a copy of their home warranty contract to review it before you buy. The contract may be online, but it is important to note there are different contracts for most states and sometimes within.
Now use the knowledge you learn here to help you get the right home warranty, from the right company at the right price.
Please consider the companies we offer on HomeWarrantExperts.com for you next home warranty purchase.
Avoiding The Home Warranty Not Covered Response!
[xa_acc style=”xa-blue”][xa_slide title=”CRITICAL THINGS YOU NEED TO KNOW” openclose=”1″ icon=”Select Icon—“]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.[/xa_slide]
[xa_slide title=”REAL LIFE EXAMPLES” openclose=”” icon=”Select Icon—“]
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.[/xa_slide]
The BIG HOME WARRANTY PLAN GOTCHAS!
Below 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.
[xa_acc style=”xa-blue”][xa_slide title=”Gotcha #1: HOME INSPECTORS – YOU GET WHAT YOU PAY FOR!” openclose=”” icon=”home”]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.[/xa_slide]
[xa_slide title=”Gotcha #2: KEEP UP STANDARD MAINTENANCE ON AIR CONDITIONERS AND HEATERS!” openclose=”” icon=”Select Icon—“]
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.[/xa_slide]
[xa_slide title=”Gotcha #3: RUST & CORROSION ARE USUALLY EXCLUDED FOR THE FIRST 30 DAYS OR EXCLUDED ALL TOGETHER!” openclose=”” icon=”Select Icon—“]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.[/xa_slide]
[xa_slide title=”Gotcha #4: THE SERVICE TECHNICIAN MAY BE WRONG AND TRYING TO TAKE ADVANTAGE OF YOU!” openclose=”” icon=”Select Icon—“]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.[/xa_slide]
[xa_slide title=”Gotcha #5: NEVER GET ANYTHING FIXED WITHOUT THE HOME WARRANTY COMPANY’S APPROVAL!” openclose=”” icon=”Select Icon—“]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.[/xa_slide]
[xa_slide title=”Gotcha #6: THERE MAY BE PAYOUT LIMITS ON THE TOTAL POLICY AND INDIVIDUAL HOME SYSTEMS AND APPLIANCES!” openclose=”” icon=”Select Icon—“]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.[/xa_slide]
[xa_slide title=”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.
[xa_slide title=”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.
[xa_slide title=”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.
[xa_slide title=”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.
[xa_slide title=”Gotcha #11: RESIDENTIAL PROPERTIES USED FOR COMMERCIAL/RETAIL/OFFICE PURPOSES DO NOT QUALIFY?”]In most cases the answer will be no. For example, if you run an insurance office out of a house down on main street, even though it is a home, the property will most likely not qualify for a home warranty.
Make sure to check with the company or your contract for details.
[xa_slide title=”Gotcha #12: ARE COMMERCIAL CLASSIFIED APPLIANCES COVERED?”]Home systems and appliances classified for commercial use are usually not covered! Check with the home warranty company to verify the make and model before purchasing a home warranty. We would recommend something in writing for documentation purposes.
[xa_slide title=”Gotcha #13: WHAT IS THE COVERAGE FOR PLUMBING STOPPAGES?”]COVERAGE FOR PLUMBING STOPPAGES MAY ONLY BE AVAILABLE FOR NEW HOMES WITHIN THE FIRST YEAR. CHECK YOUR HOME WARRANTY PLAN CAREFULLY!