While they can be handy if you have an expensive or unforseen repair, not all home warranty companies are created equal.
I was working on another blog post here when I received a text from a friend.
She had just closed on her new condo a few weeks earlier, but now she had a problem. Her bathtub was leaking water and it was flooding the hallway as well as the unit below.
I'm no master plumber, but I've owned and managed a number of properties and I've seen (and fixed) almost every type of plumbing issue you can imagine. When I arrived, the water remediation was already underway by building maintenance. After a few minutes, I identified what I thought was the problem - a faulty drain valve.
The fix wasn't difficult - if you had the right tools. But, since the leak was affecting other homeowners, we thought it would be best to hire a licensed plumber. With plumbing, any repair can be pretty expensive - especially if you're recently closed on your new home. However, when she closed, she also purchased a home warranty through a well-known company.
Home warranties come standard with the purchase of a newly constructed home, and real estate agents often advise that home buyers purchase one (or stipulate that the seller include one as a condition of the sale).
This seems like the perfect time to use a home warranty, right? -- Not so fast. There were many more challenges than we expected.
Challenge #1. Home warranty company was unable to find a reliable contractor.
We called the home warranty company only to be told that they couldn't find an available plumber. They asked us to find one on our own. We were provided a list of companies that were on their 'naughty list' not to contact. Once we found one, the home warranty company would pay for the repair.
We searched and found that some plumbers charged a trip fee that ranged from $75 to $200. This fee was in addition to any repair cost. Luckily, we found a well-known national company that could come out the next day without a trip charge.
Challenge #2. They don't cover every repair.
After the plumbers diagnosed the problem, we called the home warranty company to give them an update. When describing the issue, we mistakenly told the rep that "the tub had a leak". The rep thought we meant the tub itself had a crack in it, which isn't covered. We had to make sure we clearly described the problem and the proposed fix before they agreed to pay for the repair.
Challenge #3. Nothing can be done without prior approval.
Since the water pipes were inside of the wall, they could only be accessed via the downstairs unit. The owner of the unit below was not very cooperative in allowing access to their condo (even though their unit was being flooded with tub water.) As a result, the plumbers weren't able to perform a full inspection.
We called the home warranty company again. The rep was adamant that we needed to have the problem diagnosed and costs outlined before they would agree to pay for the repair. - Perfectly reasonable. - However, since we couldn't access the downstairs unit, they agreed to pay for the proposed repair. If additional repairs were needed to the pipes, they would pay for that repair as well. --Almost!
Challenge #4. Home warranty companies don't work with everyone.
After the plumber outlined the proposed repair and associated costs, the rep began to take their billing info. Imagine our surprise when we were told that they didn't work with this company. (Reminder, this is a highly reputable company with offices across the US.) Furthermore, they weren't on the 'naughty list' we received on day one. For some reason, they just didn't work with them.
Since it was almost a week since the leak was found and the plumbers were already there, my friend decided to have them fix it and pay for the entire cost out of pocket.
Total time spent ~ 5 days Total cost: ~ $400 Total home warranty reimbursement: ~$0
Summary: Here are 4 steps that homeowners must take when working with a home warranty company.
1. Make sure that the home warranty company works with your contractor (and vice versa).
2. Make sure the proposed repairs are covered by your home warranty company.
3. Don't do anything before you get approval from the home warranty company.
4. Make sure your repairs are clearly identified and your costs are firm and in writing.
Lessons learned: Working with a home warranty company isn't as straightforward as it may seem. Home buyers should make sure they do their due diligence prior to selecting a home warranty company. Be careful, this is one area where you don't want to be a cheapskate. You may just get what you pay for.