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Saturday, March 26, 2011

Comparing Home Warranty Companies

Selecting a home warranty company is not as easy as you may think!   You’ve got to be very careful and make sure you understand the fine print – although you may see that an item is covered, dig deeper ‘cause you may be in for a surprise.

And, your leaky roof may be covered with one plan but not with another.

What was thought to have been a fairly simple blog post has turned into an incredibly overwhelming task – I can see the confusion a homeowner is faced with when it’s time to select a home warranty company.  If you thought you could just quickly peruse the marketing brochure, think again.  You’re gonna need to go out and get some stronger readers and by the time you’ve gone through all the literature, you’re ready to check into a retirement home.

In an attempt to uncover the good, bad and the ugly of home warranty plans, I concentrated on a handful of companies – the ones that often come up in conversation around the realtor water cooler:  American Home Shield (AHS), Buyers Protection Group (BPG), Fidelity National Home Warranty, Old Republic Home Warranty and ServiceOne Home Warranties. 

Here’s what I discovered: All home warranty plans are not the same – not even close!  And, what’s important for one homeowner may be a different priority for another.  One thing is for certain, ask around and see what other homeowners have to say, talk with trade providers who actually do the work and deal with the home warranty company on the back side, and of course understand the plan you end up selecting.

The coverage is one thing – how it is handled is another and one that could give you heartburn.  Like with all service businesses, customer service is key.  Sometimes bigger isn’t better as corporate bureaucracies may get in the way.

So, let’s look at these companies and try to make sense out of their products.

American Home Shield (AHS) offers 2 basic plans

Core Coverage:                      $345                Condo
$385                Single Family Home

Coverage Plus:                       $385                Condo
                                                $425                Single Family Home

Trade service call fee:             $60

Going through the literature, there are add-ons you will likely want to consider.  Additional charges apply for washer, dryer, refrigerator with ice maker and dispenser, swimming pool and/or spa equipment, water softener, well pump and septic system pumping and sewage ejector pump.

AHS prides themselves as an industry leader.  When asked to comment, they said, “American Home Shield has a respected reputation and a reliable nationwide network of approved and independently insured service contractors.  AHS has a proven record of 40 years of service to over 1.4 million homeowners that trust AHS to help protect their homes.”

Let’s explore an example: Our garage door doesn’t open properly – so we call the home warranty company.  AHS will it is not cover any problem with our garage door under the basic plan.  Under the Coverage Plus, you’ll pay the trade service fee of $60 and the wiring, motor, switches, receiver unit, rail/trolley assembly, hinges, springs and remote transmitters are covered.  The door and door track assembly is not covered.  You’ll need to research whether or not removal of old equipment is included as it may be extra.

Standard                     $350 SFH
                                    $300 Condo
Preferred                     $400 SFH
                                    $350 condo

Trade service fee:       $30 - $60

The customer can choose a $30 trade service fee option for an additional $60 to the plan price.  This is an interesting option and from what I can tell, a first in the industry.  This could be very appealing to the buyer who is having the seller pay for the home warranty plan on his behalf at close of escrow.

So what about our garage door?  The opener is covered under basic plan.  Doors, springs, remote transmitters, keep pads, lights and hinges are covered under the Preferred Plan.

I asked Jeff Swanson, BPG’s local sales manager about his products.  He reiterated the necessity to read the brochures and “fine print.”  He said the “’Limits of Liability’ section will tell you to what extent the plan performs.  For instance, this area will often tell you that a particular Home Warranty plan will cover homes up to 5000 square feet.  Anything larger than this size, please call for a quote.  This area will tell a contract holder that it is their responsibility to provide access for a contractor to make a repair.  For example:  Air Handlers (part of an Air Conditioning system) in the attic.  Often, builders will have this equipment installed and finish building the house around it.  If the Air Handler needs to be replaced, the crawl space that is usually found in a closet or a garage is too small for the unit to be removed, so a contractor will often have to cut a hole in the side of the house in order to remove it.  The cost of providing access for such a repair is beyond the scope of the warranty and will be a homeowner cost.

The above situation serves as a good example of making the point that a Home Warranty plan covers “everything.”  It doesn’t; no plan does.  Home Warranty plans certainly do what they say they will do, but by no means do they cover “everything.”  If they did, these plans would not be affordable to the general public for which they are designed to serve.

Standard                                 $325 SFH
                                                $305 condo
Comprehensive Plus              $380 SFH
                                                $360 condo

Trade service fee                    $55

Basic plan includes general plumbing system, heating/AC/ductwork, electrical, central vacuum, garage door opener, ceiling fans, trash compactors. Upgraded plan includes mismatched systems coverage, improper installation repairs and/or modifications, removal of defective equipment, permits, code violation corrections and more.

So, using our garage door problem from above –we call the home warranty company.  Here’s what Fidelity National will cover after we pay our $55 service call fee:  Wiring, motor, switches, receiver unit and track drive assembly are included under the basic plan.  Hinges, springs and remote transmitters are included with the expanded coverage.  Again, check into it further as there may be a haul-away fee.

Fidelity National prides themselves with delivering exceptional customer service at a great value.  Their brochure touts “more coverage with fewer exclusions.”

Standard Coverage:                $335 SFH
                                                 $305 Condo
Ultimate Protection:                 $400
Platinum Plus                          $475

Trade service fee:                   $55

Ceiling fans, trash compactors, instant hot/cold water dispensers, jetted bath tub motor and pump, garage door opener, central vacuum are all included in the basic plan.  Limited Roof Leak Repair on one of the options is available as an additional add-on.  Their upgraded plan includes haul away/disposal if needed (when that water heater blows up) and even includes construction costs to have a new item re-fitted (for when the old oven dies and the new one doesn’t fit within the cabinetry).

What about our garage door?  With Old Republic, all components of the opener unit including motor, logic board, gear assembly, capacitor and rail assembly are included in the basic plan.  Hinges, springs, remote transmitters and key pads are included under the Ultimate plan.

Stacey Gross, account executive for Old Republic Home Warranty highlights these benefits:

«        The Platinum Plus program with unprecedented coverage in the industry covering roots, modifications, crane and permit fees to name a few.
«        Cover 38 additional items on our Ultimate Plan including improper install.
«        No footage limit on stoppage cleared with cable.
«        Undetectable Pre-existing Conditions.*
«        Replace equipment with like quality based on features, capacity and efficiency.*
«        Cover multiple systems at no additional charge.*
«        No age restrictions, obsolete clause or rust and corrosion exclusion.* We don’t remove coverage at time of Renewal.
«        Cover items that fail due to the lack of general maintenance.

ServiceOne offers 2 basic plans:
Sentinel:                                  $349 Single Family Home or condo
Guardian:                                $489 Single Family Home or condo

Trade service call fee:            $55

ServiceOne is a local company and their plans are designed specifically for Arizona homes.  There are nimble and have a great reputation for unsurpassed customer service and claim to have the most comprehensive plans available.

The offer optional add-ons for an ENERGY STAR® upgrade, washer/dryer/kitchen refrigerator with ice maker and dispenser (included with Guardian plan), pool/spa equipment, salt water equipment, extended main line plumbing, water softener and guest house. 

Several items to note: ServiceOne offers no fault coverage, free security alarm system and system coverage with a monthly monitoring contract, re-key of up to 6 keyholes, termite treatment coverage, pest control service, garage door opener, sprinkler, drip and timer system.

They cover (unknown) pre-existing conditions, promote a “no Band-Aid repair” in that if it can’t be fixed, it’s replaced, and is an Arizona based local home warranty company.

Take our garage door issue:  With ServiceOne, wiring, receiver, switches, capacitor, motor, rail/trolley assembly, push arm and carriage are covered under the basic plan.  The doors, springs, hinges, remote transmitters and track assembly are not covered under any option.

Remember our garage door that died?  Here’s a recap:

As for me, I think a home warranty plan is an important investment.  I always encourage my buyers to take a plan – and I suggest the upgraded plan in all instances.

Home warranty plans have saved my hide a number of times on my personal homes and they give me great peace of mind on my investment properties.  Just know, there’s going to be hiccups along the way – you may have to wait, use a vendor you otherwise would not have selected, may have a haul-away or refitting expense, etc. 

If you need late night reading material, I can share the marketing brochures with you.  None are fun to go through and I’d suspect if you’re a graphic artist, you could have some serious job security by working on revamping their materials.  I’ve tried to be accurate with the above, but undoubtedly I’ve probably made a few mistakes, so do your own due diligence. 

Photo taken from patersor on Flickr


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