I get asked this question at least 30+ times per year so I decided to go ahead and write a blog. I want to preface this article with the fact that I have in the past and still do work for home warranty companies and the views expressed in this article are merely a reflection of my own personal opinions based on experience and in no way is intended to manipulate any actions or opinions of anyone else.
I actually started my company by doing work for a home warranty company who will not be named (the experience was bad and I don't need the drama). The company I started doing work for had a pre negotiated rate for both service calls as well as parts/services to be provided. 90% of the time these prices were so low that I was barely making ends meet and couldn't really run a business on it, I now realize that should never be the goal of a business owner. These calls are good to fill blank spots in the schedule, but I wasn't going to be successful with home warranty work. For instance, I would get $50 dollars for the service fee, and if I had to replace a capacitor I would get an additional $55 for a grand total of $105. By the time you take out cost of part, gas for the vehicle, taxes, I was making maybe $30 for 2 hours worth of travel and work. That's barely minimum wage as a business owner with a lot of stress. Wasn't worth it.
The next negative part with that particular company is they were always trying to find a loop hole in the fine print to get out of covering repairs for homeowners. This often became a negative reflection on me as the homeowner's would get upset, understandably so. I recall an instance where I responded to a service call in Sneads Ferry for an A/C not working. I found the system empty of refrigerant and found a leak in the condenser coil (the most expensive repair for any system). The home warranty company denied the homeowner's claim for repair and they told the homeowner that I said the unit was maliciously damaged. Obviously I never said that and thank god all my correspondence was saved in emails. When the homeowner called me (very upset and threatening to take me to court), I forwarded the email correspondence to her to prove what was actually stated. The actual diagnosis was natural causes due to corrosion of the equipment over time in a high salinity environment. That was the last job I did for that company as I realized they will do anything to cheat clients and they don't care if they ruined my reputation in the process. I was trying to build a company so I certainly didn't need that in my life.
By this time I was doing ok with building a clientele base so I didn't need work from home warranty companies, that was until I expanded by hiring a few more employees. At this point I was responsible for my employees gainful employment so I again tried another home warranty company. The new company which I will name, Homeserve, was a breath of fresh air. The way they work is completely transparent with all parties without all the red tape. The service fees were based on travel time and they were very fair and the coverage by the company was capped based on the plan the homeowner purchased. I have now been doing work for them for 2 years and from a contractor stand point I can say with certainty that I enjoy doing business with them. They always pay my normal rates, there approval process it very easy, and they don't pressure me to do anything unethical. ``I mention ethics because the company who's name shall not be mentioned would often ask me to make cheaper repairs to equipment even if it voided the UL listing turning the equipment into a Frankenstein.
I can't speak to how Homeserve is for homeowners, cause I've personally never used their services. I can say that Homeserve clients are always cheerful and happy to see me without complaint. This was not the case with the other company, the clients were generally unhappy with a handful of bad past experiences. This weighed heavy on me as I was always nervous about the situations I was walking into with the other company, never with Homeserve jobs.
Here's my advise... home warranties can be a good thing and they can also be a bad thing. Pay special attention to the fine print and know EXACTLY what is covered and to what degree. The first claim process is typically a good basis for how the relationship will go as long as you are doing business with them. I will say that a majority of the calls that I responded to for home warranty companies could have easily been avoided with routine maintenance, which every heating and air company offers. 99% of the time routine maintenance plans are cheaper than home warranty plans, plus they are typically accompanied by a discount for parts. I'm always going to advocate for maintenance especially in an area like eastern North Carolina where our HVAC systems run 90% of the year. Being without A/C in the middle of summer is not fun for anyone, especially when the issue could have been easily avoided.
Again, these are just my opinions and not meant to be taken as fact. Everyone is going to have a different experience and hopefully this article at least will help you make a decision that you are comfortable with. Thank you for taking the time to read and as always please feel free to contact us with any questions or concerns.
Kenneth Casebier
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