Our Home Owner Warranty Claim

Whether or not home warranty companies are worth the money they charge was the question we debated last summer when we bought a house on short sale.  Often when you buy a house you can ask the seller to include a home owner’s warranty as part of the deal, particularly in a buyer’s market. For example, we bought a seller’s warranty for the house we were selling and converted it into a warranty for the buyer when we sold.

Warranty Costs vs Benefits

In our case we were negotiating under the approval of the bank for the short sale and there was no room for the possibility of having a warranty included.  So we had to decide whether it was worth it for us to pay the money for the home warranty.  We had a hard time making the decision, my wife wasn’t crazy about the idea but I felt the cost was worth the potential expense of a major system problem like the air conditioner or furnace going out.  The house was about 10 years old so I could see the air conditioner quitting on us right after we bought it.

Our First Home Owner Claim

We ended up buying the home warranty and haven’t needed to use it until today.  Last weekend our furnace started making a lot of noise and running rough enough that the floor above was shaking so we called up the home warranty company to have someone come look at it.  We couldn’t get ahold of them on the phone but we did go to their website and file a claim online.

Claim Filing Process

For those of you trying to decide if you should buy a home warranty, here’s a look at how the claims process works.  It might vary from company to company but many of the large ones are having you submit a claim online these days.  Some offer the option of letting you file over the phone but you’ll probably sit on hold forever so it’s probably less hassle to do it online.

Keep track of your contract number because you’ll need it to pull up your account and file your claim.  If you don’t have it, they may have a process where you can retrieve it using your name, address, and phone number. 

Once you’re into the online claim system you’ll choose the type of claim that you’re filing and may be able to enter in some detail about your claim, as shown here.

After going through a verification screen to make sure everything looks right you submit your claim and you’re given a claim number. 

What happens next depends on the warranty company, typically you’re at least sent an email confirmation of our claim.  In some cases you may have to wait for them to contact you, in others you may be given a number to call.

Home Warranty Claim Servicing

Many of the national home warranty companies don’t do the actual service themselves, they have contracts with local companies to do the work on their behalf.  If that’s the case, at this point you’ll get the name and number of a local contractor to call to schedule an appointement.  That’s what happened in our case, I called them up and got a voicemail where I left my home and cell number along with our claim number.

Here’s what they said on the claim confirmation page:

“When scheduling the appointment, please advise the representative that you have a service agreement and provide them with the claim number. The service technician will go to your home to determine the cause of failure and will contact us with their service report. As a reminder, you are responsible for paying the service company for their service call, diagnosis and/or covered work performed up to your deductible amount of $75.00. Please print or save this important information for future reference.”

Is a Home Warranty Worth It?

So far, this part of the claims process has gone relatively smoothly. I was able to submit it quickly and the local contractor called back withn an hour to schedule the appointment for tomorrow afternoon.  We’ll see what happens after they check out the furnace.  Hopefully the repair bill won’t be too large and they’ll honor the warranty.  One thing some home warranty companies are notorious for is doing the least amount of work just to get you back up and running, without paying to fully fix the problem.  Hopefully we won’t run into a situation like that and everything will go smoothly and the warranty will be worth the money we paid for it.

Ben Edwards, the founder of Money Smart Life, saved up enough to buy a Nintendo back when he was 12 years old. When he used the money to buy shares of Wal-Mart stock instead, he knew he wasn't like the other kids... His addiction to personal finance has paid off for his family and now he's helping you to afford the life that you want. Check him out on the web at Google Plus, Twitter and Facebook.

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