If you’ve ever gone about buying a home warranty, you probably ended up thinking at some point: “Are home warranty companies scams?” There are many differing opinions about the home warranty industry, and as in any field, there are both reliable and unreliable companies. Bad home warranty companies provide subpar service because they’ll skimp on costs, or they’ll try to get as many contracts as they can and then shut down without reimbursing their clients. However, there are also trustworthy home warranty companies who will take care of your home from unexpected appliance breakdowns. When choosing a home warranty provider, you should know what to look out for. Continue reading to learn about different types of home warranty problems and how to recognize potential scams.

Communication problems

One main difference between the best and worst home warranty companies is how they communicate with their customers. You may have trouble reaching the company to get help. The worst-rated home warranty companies are hard to reach by phone or online. Getting in touch with them often requires waiting for a response for long hours. If you are lucky enough to reach company representatives, customer support may be useless, unprofessional, and disrespectful. The resulting delay may lead you to give up and find your own contractor and pay them out-of-pocket. This is what scam companies want – for you to pay the home warranty company for their premiums, and then still pay for home repairs by yourself.

Tricky terms and conditions

Another factor where the best and worst home warranty companies differ is in the way they present the contract terms. Trustworthy companies have clear terms and conditions that are easy to find, read and understand, while bad home warranty companies either conceal their true terms or use unclear wording that may confuse the customers. Then, when you’re having an emergency and urgently need repair service, they’ll point to some obscure line in their contract that lets them get out of actually having to help.

Payment delays

One of the biggest red flags of home warranty scams is a payment delay. If a long time has gone by and the company still hasn’t reimbursed the repair costs, it may be a sign that the company is unscrupulous and might even close down soon, leaving you without your money. Furthermore, some home warranty companies deliberately make it difficult to cancel their unhelpful policy, and if you do manage to cancel, the home warranty company might make you wait a long time to get a refund – if you ever get it at all.

Claim denials

Scam home warranty companies will try to deny every claim by any means. They always find a reason to blame the homeowner for a malfunctioning system or an appliance, and then refuse to fix them. In some cases, these companies may say that this particular type of breakdown is not covered according to their terms and conditions, or they may use “improper maintenance” as an excuse to dispute reasonable claims and place the blame on the homeowner. Bear in mind that it’s up to the home warranty company to determine if a claim is approved or not.

Unexpected costs

Before choosing a home warranty provider, review the home warranty contract and determine if there are extra charges you should be aware of. If the warranty provider sets a low claim cap, you will have to pay out-of-pocket for your next repair. Unreliable companies do not mention the limits in their contracts, and as a result, clients will experience quite an unpleasant surprise when something in their house breaks down and they have to pay for repairs themselves.

There also may be a deductible, which is the amount you have to pay before the home warranty company will help you. Another area of confusion is the appliance replacement policy. Some customers believe that if they have a broken appliance, the home warranty company will replace it. However, most companies will simply pay you some monetary sum, often lower than what’s needed, and leave you to make up the rest of the replacement cost.

Repair delays

Reputable home warranty companies typically send a repair technician to your home within two days of your initial call. In contrast, bad home warranty companies try to delay repairs as long as possible, leaving you without the help you paid for. Oftentimes, the longer you have to wait to fix something, the worse it will be when the repairman finally does get there. Repair delays are not only inconvenient and annoying but can also be expensive and sometimes even dangerous.

Unprofessional contractors

Yet another difference between the best and worst home warranty companies is their contractors. The majority of home warranty companies do not allow their customers to choose their own trusted contractor; however, good companies hire high-quality specialists. When working with scam companies, the technicians they send you might not actually be qualified enough to solve the problem.

So, are all home warranties a scam? This question remains disputed as there are both trustworthy home warranty companies and harmful home warranty scams. When shopping for a home warranty, start with the most reputable companies with widespread positive feedback. By thoroughly researching a company’s reputation and carefully studying their terms and conditions, you can be confident that you understand the full scope of covered items and limits, and you can rest easy knowing you’ve picked the right home warranty for your home.