is home warranty policy scam?

Question

home warranty company told me that they only covers parts and no installation.and they can even denied any claim using exclusion paragraph without any reason. But when I purchase this 5 years ago in 2014, sales person made lot of policy like low deductible, quick service, if we can not repair we will replace, etc. etc. I feel like I am cheated. is there any thing I can do abot this? I really appreciate your input.

Greg Weik · Answer

@Kinjal Patel, I do think home warranty policies are generally a scam.  It's like all insurance; their goal is to not pay out claims unless they are absolutely forced to.

I own a property management company, and a few of our clients do have home warranty policies.  The bottom line is that all these HW companies are doing, is the same thing we do as a property management company - they send out vendors to address the issues.  The problem is, most of the vendors the HW company finds are the sketchiest, least reliable vendors out there.  On top of that, the HW company is heavily incentivized to deny the claim if they possibly can.

There's one HW company here in the Denver area that is pretty good - Blue Ribbon Home Warranty, but I think they might be local.  The big guys, like American Home Shield are, in my professional opinion, completely worthless.  They're so bad, I had to change our Property Management Agreement to let clients know that we will not sit on hold with their HW company for 30 minutes and we won't chase them to show up for repairs.

Sorry you had a bad experience, but my experience over 15 years in property management has been that the HW company is generally not worth paying for.  Best of luck.

Bjorn Ahlblad · Answer

Home warranty has worked not bad in my primary residence..........but it is not worth a darn in rentals. In my rentals I need to be in control not some insurance company.