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Home warranty scams

Home warranty scams

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Warning signs of home warranty scams:

  • Scammers use phone calls or letters to offer/renew home warranties or threaten to cancel coverage if payment is not received immediately.
  • Elderly or vulnerable populations are often targeted.
  • Scammers may tie in mortgage lenders or use formal-looking documents to appear credible.
  • Legitimate renewal notices should come from recognized companies and include detailed information about the policy and a reasonable payment date in the future.

Avoiding home warranty scams:

  • Research and read the contract carefully before signing with a home warranty company.
  • Read online reviews and check with the Better Business Bureau and Consumer Reports home warranty reviews.
  • Talk to neighbors, friends, and real estate agents for recommendations.
  • Compare rates and types of coverage, including add-on coverage for specific home needs.
  • The contract should include all the details of the policy, including conditions for claim rejection, appeals process, and cancellation policy.
  • Ask questions until you are certain you understand the policy before signing.
  • Keep a copy of the signed policy and payment record.
  • Beware of unsolicited calls or emails from companies offering home warranties. Do not share personal or financial information with them.
  • Check if the home warranty company is licensed and registered with the state regulatory agency. This can be done by contacting the state department of insurance or visiting their website.
  • Make sure the home warranty covers the items or systems you need, and that there are no exclusions or limitations that would affect your coverage.
  • Review the policy carefully to understand the terms and conditions, including any deductibles, service fees, or caps on the amount of coverage.
  • Ask the company for a sample contract or brochure that explains the coverage in detail, and keep a copy for future reference.
  • Find out how the company handles claims and repairs. Do they have a network of pre-screened contractors or do they allow you to choose your own? What is their response time for service requests?
  • Check if the home warranty company has a 24/7 customer service hotline that you can contact in case of emergencies.
  • Make sure you understand the cancellation policy and any fees or penalties that may apply if you terminate the contract early.
  • Consider purchasing a home warranty as part of a comprehensive home protection plan that includes regular maintenance and inspections. This can help prevent costly repairs and extend the lifespan of your appliances and systems.

Dealing with home warranty scams:

  • Report the company to law enforcement agencies or the Better Business Bureau.
  • If payment was made with a credit card, file a fraud report with the bank or credit union.
  • Raise awareness in the community to prevent other victims from falling for the same scam.

Finding Legitimate Home Warranty Companies:

  • Reputable companies offer transparency, flexible plans, easy claims process, and positive reviews.
  • Check for clearly listed terms, packages, costs, and details.
  • Check online reviews for mostly positive reviews and how the company responds to negative reviews.
  • Recommended companies include American Home Shield, AFC Home Club, Choice Home Warranty, Liberty Home Guard, and Cinch Home Services.

Benefits of Legitimate Home Warranties:

  • Legitimate home warranties offer peace of mind to homeowners by providing coverage for unexpected repairs or replacements.
  • Homeowners can avoid unexpected expenses and debts by having a home warranty in place.
  • Recommended home warranty companies offer a range of coverage options and are known for their customer satisfaction and reliability.

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