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Slam the Door on These Home Warranty Scams


The common rule of thumb is to save 1% of your home’s purchase price for ongoing maintenance. But if you’re especially worried about some big-ticket items breaking down, consider a little extra protection. Depending on your situation, a home warranty might be a good idea if you’re concerned about fixing or replacing major appliances or systems. But be careful about who you decide to go with; there are loads of disreputable companies out there trying to sell you worthless promises.

Here Are Some Tips For Spotting Scams:


High-pressure tactics

Have you ever received a message alerting you that “YOUR HOME WARRANTY IS EXPIRING” in just a matter of days? If so, you know the scare strategies these bogus warranty companies use. Just say no to these types of hysterical emails, letters, calls, or texts.

They want personal details up front

A general rule holds true across the entire universe of scam prevention: you’re better off never giving out any information when someone initiates contact with you. If you have a home warranty, cease communication with the person contacting you and reach out to the warranty provider directly based on the contact information you were provided when you opened the policy.

No online reviews

No matter the product or service you’re considering purchasing, it’s always a solid practice to search for online reviews for a company. Better Business Bureau and Consumer Reports are excellent sources of information on the trustworthiness of a company. If you can’t find any independent reviews for the purported warranty provider, they’re not worth your time.

Sketchy contact information

If you’re unsure if a warranty company is legit, ask them for detailed contact information, like email, phone number, and mailing address. They’re running a scam if they aren’t able or willing to provide these.

Here’s How To Make Sure You’re Getting A Solid Warranty:


Take it slow

There’s never any reason to rush into a decision about a home warranty. By taking the time to research all the companies offering home warranties in your area, you can make an informed decision instead of a hasty one.

Check their licensing

Each state can choose the governmental department overseeing home warranty companies. Do a little homework and find out which body regulates home warranty companies in your state. Next, contact that entity to ensure any home warranty companies you’re interested in are licensed to provide the service in your state.

Read the fine print

With all the services and products we sign up for these days, it’s normal to gloss over the small font contractual language. With home warranties, this is a big no-no. Even if a company makes specific promises verbally, make sure the same coverage is explicitly mentioned in the contract. If it isn’t, look elsewhere.

Additionally, make sure the agreement doesn’t contain any vague language. It should clearly delineate what is covered and for how much. In a legitimate agreement, fees and the claim process will also be clearly listed.

Talk with a real estate agent

Because they deal with housing issues repeatedly as part of their job, real estate agents can be a wealth of information on various home-related topics. If you still need to figure out if a company is legit, ask your real estate agent for some recommendations. If the company you’re considering differs from the ones they regularly see their clients using, look elsewhere.

Unfortunately, home warranty scams are omnipresent these days. But as with all scams, you can avoid costly mistakes if you can slow down and assess the situation.




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