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Beware: Home Warranty Trap Targets Seniors!

Home warranties are many things, but few of them are good and even fewer are truly beneficial for seniors. If you are thinking about buying this type of coverage, think again. It’s true that a home warranty can be helpful, but only in very specific situations.

Read the following carefully before you spend your hard-earned cash for a home warranty contract.

Are Home Warranties a Scam?

There are over 180 home warranty providers in the US today and not all of them are scams. But even if the company is 100% legitimate and trustworthy, the service itself is often so useless that it may as well be a scam offering no real value to the customer.

The Better Business Bureau has issued a warning that the majority of consumers won’t benefit from home warranties. Simply put, you don’t need them because they don’t really make home appliances and system repairs free. Instead, you often end up paying more in the long run than you would have if you’ve just hired a good contractor to fix the issue.

The reason why home warranties are considered a scam is that their ads usually imply that the warranty makes repairs free. Many companies have been taken to court and charged with fraud because of these false claims. However, even paying $780,000 in fines as the Choice Home Warranty did, doesn’t stop these companies from misleading customer.

Usually, they just keep on with their lies making some minor adjustments to the wording of their promises. This means that through such dishonorable practices, they can cheat out enough money from consumers to cover nearly a $1,000,000 fine and still remain in profit.

False and confusing advertisements aren’t the only problem of home warranties. Reading the horror stories about the worst companies will show you that for a senior, these contracts can be truly dangerous. That’s because they do not only make you waste money, but might also leave you suffering while waiting for a technician that doesn’t come.

Imagine how awful it would be to have your AC break down during a heatwave. That’s a bad situation for everyone, but for seniors with some health issues this might be life-threatening. Sadly, there are many examples of such behavior from home warranty providers. Therefore, putting your trust in them could be a big mistake.

How Home Warranties Go Wrong: Examples

  • A senior homeowner in Coldwater, Mississippi has been stuck without an AC for two months in the middle of the summer, reported FOX13 News. The poor woman purchased a home warranty plan from Choice Home Warranty, but the repairmen they sent first didn’t help. She paid for a second opinion put of pocket, but the warranty provider didn’t authorize to pay for repairing the issues identified by the second contractor.
  • A similar story with a faulty AC unit occurred in Houston and was picked up by Channel 2 Investigates. There, the case has gone all the way up to the Attorney General’s office. Stricter regulation of home warranties is, no doubt, essential. But even AG seems to have little power to do something about it. Therefore, homeowners of Houston are still suffering from these scams, which are technically legal.
  • Residents of Jackson, Michigan are facing a different type of a home warranty scam. There, some shady company is spreading notices informing residents that their current home warranty expired and they should sign up with them right now. Unfortunately, seniors in particular are extremely vulnerable to this type of scams. There is no saying how many people have actually been fooled by this and similar cons.

Why a Home Warranty Might Be Useless to You

Seniors are more vulnerable to scams because they are easy for experienced conmen to confuse. Home warranties offer these criminals many chances because the terms and conditions of the contracts are always convoluted.

Even the few home warranty companies that can be trusted have very complex coverage terms and conditions. This is done to allow the providers use the tricky terms to deny claims and avoid honoring the contract.

Even if the terms and conditions seem straightforward, they might often be unreasonable. The most common issues you’ll face with a home warranty are:

  • Claim filing time is very short.
    This means you only have a few hours or a day to file the claim in order to get your repairs paid by the company. This might be impossible, especially if you are a senior living alone and without a way to communicate easily with the warranty provider.
  • Coverage limits are low.
    All home warranty companies have a maximum coverage limit for repairs. This means that they won’t pay more than this amount, regardless of how much the actual repair ends up costing you. Many providers set this limit too low, like $500 max. Now, imagine that you need to have an AC part replaced, which costs $1,800. The home warranty coverage will be useless because you would still end up paying more.
  • Service call fees are high.
    Every time you call a home warranty to send you a contractor, you are charged a service call fee. It usually ranges from $50 to $100, depending on the company. If the fee is high, you might end up paying more than the real cost of the repair.
  • Hidden fees.
    Home warranty companies are also known for charging hidden fees that aren’t mentioned directly in the Terms and Conditions. For example, you might end up being forced to pay for getting a second opinion or an additional repair, if the first one failed. There are also fees for terminating the contract, so you won’t even be able to get rid of the home warranty without paying some money.

Should You Risk Buying a Home Warranty Anyway?

As you can see, the majority of home warranties are scams. Seniors fall for them most often because they need the kind of help that these plans promise. However, the problem is that the majority of home warranty companies rarely honor their promises and contracts.

All this said, there are some companies that can be trusted. If you feel that home warranty is the protection service you really need, you should research every provider very carefully and make sure that you find one with a good reputation, whom you can trust.