A Free Public Service

SCAMS BULLETIN Host Jay White is an inactive attorney in San Mateo County, California.

March 7, 2023

HOME WARRANTY SCAMS

Attribution: US Federal Trade Commission

What exactly is a home warranty?  It is essentially a service contract.

There are different types and options depending on the company and amount you pay. Some home warranties typically cover replacements and repairs for things like appliances or air conditioning systems. They last for a limited amount of time — unlike builder warranties of new homes.

When looking at the details, you may find that a home warranty duplicates coverage you already have. Or covers only part of a product. Or makes it nearly impossible to get repairs done when you need them.

Some things to think about before committing to a home warranty. Read the “fine print”:

*Is it likely to save you money? Consider both the upfront cost and costs that may be hidden, like deductibles or fees you need to pay each time products are serviced.

*What are the limitations? Are there limits on the amounts you can be reimbursed? Is accidental damage covered? Are certain appliances or systems not included? Are there restrictions or fees for cancellation?

*Does the claims process seem difficult or slow? Waiting a long time to get paid back can reduce the value of having coverage.

*Does the company have a good reputation? A home warranty is only as good as the company responsible for coverage. Search for the name of the company and words like “review” or “complaint” to see if people have had issues in the past.

Use caution when receiving unwanted calls about service contracts. Those might be telemarketers looking to trick you out your money or personal information. 

If you have had a bad experience with your home warranty, tell the FTC: ReportFraud.ftc.gov.

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