A home warranty is essentially insurance against your home systems or appliances breaking down. Whilst home insurance covers damages or theft to the home, home warranties will protect your old HVAC system when it finally packs in, or when your microwave is on the blink for no reason.
Because finding a tradesman to fix or replace such crucial systems is both painfully expensive as well as stressful, home warranties have been booming. The market size has reached $2.3 billion, and continues to grow.
When looking for a home warranty in lovely Baltimore, MD, there are a bunch to choose from. Choice Home Warranty, 2-10 Home Buyers Warranty, Liberty Home Guard, American Home Shield, Total Home Protection, Select Home Warranty, America’s 1st Choice Home Club… You certainly are in no shortage of options.
However, home warranties aren’t always what they promise to be, and a large amount of choice in Maryland doesn’t equate to fantastic, competitive service. A quick browse on online forums and reviews will tell you just how unreliable some of these companies can be. The Baltimore Sun once reported that home warranties might be an incentive for buyers, but it looks like it might be a deterrence these days.
Of course, some companies are better than others, but the flood of negative PR against home warranties keeps pouring in. The key issue is coverage. Many customers feel although they are paying for their appliances and systems to be covered, but when they break down, the companies are refusing to fix them.
The most common appliance this seems to be happening with is Air Conditioning units. Often, companies will claim that they hadn’t been maintaining them sufficiently. Thus, the breakdown was their own fault through neglect, and so the responsibility is on the owners instead of the insurer’s coverage.
The issue here is, of course, is that air conditioning is extremely important to the home. Especially in places such as Baltimore, where temperatures are consistently above 90 degrees Fahrenheit in the summer, which is a dangerous condition to be in without A/C, especially for elderly people.
All customers are asking for is reliability. Having insurance is meant to be just that: peace of mind. There is very little of that though when you’re not even sure about your own coverage. So why is the industry growing as a whole and the market booming in Baltimore?
Well, it’s a new industry that’s still finding its feet. Whilst there are a ton of bad experiences, there are also some good ones. Many companies are maturing with their services and innovating, where you have 24/7 support, efficient uses of mixing contractors with their own in-house tradesmen team as well as offering refreshing pricing structures.
There are companies with low cancellation costs (i.e. $25 at Cinch) and monthly rolling payments, which means there’s very low sunk costs. Customers are not that stuffed if they get denied a claim — they can simply move onto another company, and repeat, until they find one that they like. Of course, you have to be with a home warranty for at least 30 days usually before you can make a claim.
There’s no doubt that because of increasing influence that online reviews and social media has over companies that service standards will increase due to forced transparency. Insurance will always remain a tricky one, due to the terms and conditions.
Many companies that are at first pointed out as being unfair due to a claim denial, point back to the terms and conditions and suggest they are in the right. This can’t be argued within a legal sense, as long as they were not intentionally misleading. What is required is more education around small print — teaching people how to look out for loopholes and generally be aware of the importance of reading the whole T&C literature.
Afterall, this is what it comes down to. Whilst you don’t want to be in a legal fight with a company, your mind can be put more at ease when you’re fully knowledgeable on your rights and their promises. In fact, companies that try denying the claim may overturn their decision when they see you know your stuff.
Ultimately, Baltimore and most of America are on-board with the idea of home warranties, and rightly so. They are a great way to better manage your possessions and budget for average yearly maintenance. It’s just a matter of time before the market matures and we can more easily sift through the flyby scam companies from those that wish to stick around and build a reputation.