Home Warranty Companies: Research, Compare and Ask the Right Questions Commentary by David Sobel
RISMEDIA, July 10, 2006—Not all home warranty companies are the same. In fact, the differences can be quite significant. Some offer more coverage than others; some offer different levels of service; and others offer different programs which include different options and different pricing. Some only cater to the buyer and leave the real estate agent out in the cold.
Research is the key to finding the best provider. Ask questions, and compare - your clients’ savings account and your marketing depends on it!
There are many necessary questions to ask a home warranty provider. First and foremost, ask about coverage. What does your home warranty specifically cover? Real estate professionals and their clients should thoroughly understand what the warranty covers and what it does not. A home warranty is a great asset to the homeowner; it protects them against the high costs of repairing and replacing a covered item. A new homeowner probably does not have the funds to cover these costs if something breaks. A warranty will definitely help them in time of need. But home warranties do not cover everything under the sun and the clients should be aware of that.
Typically, home warranty contracts are one-year or 13-month contracts that cover a home’s mechanical systems and appliances. The mechanical systems often include the plumbing, heating/furnace, electrical, water heater, and cooling system, just to name a few. Appliances may include washer and dryer, refrigerator, and built-in microwave. There may also be optional coverage to purchase if the client has a pool/spa, well pump, or septic tank.
Premium coverage can also be purchased. Premium coverage includes additional items that the basic contract would not cover. Items such as code violations/permits, garage door system hinges and springs and oven racks. The home warranty company should offer clients a couple different programs to choose from along with optional additional items to cover.
Note that a covered system or appliance must be listed as a covered item in the contract; it must be located within the confines of the main foundation of the home or garage and it will be covered only if it breaks down from normal wear and tear. Home warranty companies will not cover pre-existing conditions. A pre-existing condition is a defect that is obvious or known before the warranty becomes effective. Most home warranty companies cover almost any age, make or model of covered systems or appliances designed by the original manufacturer for residential use.
After you and your clients read carefully over the contract and fully understand which items are covered and which require premium coverage, you should then ask about service call fees. When a claim is made by the homeowner, a repairman will come to their home to inspect the broken system or appliance. The homeowner is required to pay a service call fee to the technician at the time of service. Typically, this fee ranges from $50-$100; depending upon what program was selected. The service call fee is non-negotiable fee that goes directly to the repair company and not the home warranty company.
Next, you should ask questions to make certain that the program you select is compatible with the type of home being purchased. Be aware that some home warranty companies, such as HWA, offer programs designed specifically for condos, townhouses, mobile homes and even new construction housing.
It’s also important to ask questions regarding the level of customer service that the home warranty company provides. “Will I have a single point of contact to go to?” “Will the warranty company’s sales rep come to my office and give presentations on the programs?” “Is the company accessible 24 hours a day on the web and by phone?” “Can I order policies through the web site and can I receive immediate confirmations and invoicing?” “Can I make changes to the policies as they arise?” The level of service that is provided to the homeowner is very important, but so is the level of service to the real estate professional. Some warranty companies only cater to the homeowner and not to the agent or vice versa.
Last, you should ask questions that related your after-sale objectives. Ask the company, “What do you do for me to help me get referrals and keep my name in front of the policyholder?” “Will you do some marketing for me?” “Will you update me on the claims made from my clients?” A good home warranty provider will do all of that and more.
Home Warranty of America (HWA) not only focuses on the homeowner as their client but as the agent as well. HWA understands that the agent is the one that is educating the homeowner about the benefits of the warranty. Thus, HWA wants to help the agent achieve their sales goals while provide piece of mind to the homeowner. HWA markets the agent’s name to the policyholders up to 8 times a year by sending direct mail newsletters, e-mail tips and renewal notices with the agent’s name, company name and phone number free of charge. This keeps the agent’s name fresh in the clients mind and frees the agent of work needed to market themselves to past clients.
To find out more about HWA, visit www.hwahomewarranty.com/reprofNewsletter.htm |
