The woes about Home Warranty Coverage.

For the past ten years, home warranty service companies have been the No. 1 "worst graded" category by various customer rating agencies. In 2010, 54 percent of the reviews on these types of businesses received a F grade. Members misunderstanding or disagreeing with what their warranties cover and the quality of repair work are cited in the majority of complaints. Remember most of these companies have seen the homes or equipment they are covering, yet their culture is to pay for the least repair cost.
Understand the fine print
In order to minimize misunderstandings, experts stress the importance of reviewing and understanding a service contract before purchasing a home warranty. I continue to call on political representatives to outlaw small prints in contracts. No one can argur that the most important details in a contract today are hidden in fine prints. My feeling is only small prints lead to exposing a majority of consumers to deception by corporate America.
"Like anything else, make sure you shop around," says Tim Meenan, executive director of the Service Contract Industry Council, a national trade association that supports home warranties and advocates the regulation of the industry. "Read what's covered and the exclusions. If you read those two sections, you'll have a good idea if it's a policy you want to buy." Well Tim why dont you give customers something to read. The majority of customers using home warranty are average workers, struggling through multiple jobs to feed their families.
A home warranty service contract isn't an insurance policy that protects you from loss, but is meant instead to provide service, repair or replacement on a home's appliances and major systems, such as heating and electric. Typically, contracts are good for one year. "It is supposed to give people peace of mind  "Lots of folks can finance a service contract but cannot finance a new $4,000 HVAC unit."
The average cost of a basic coverage plan ranges from $350 to $500 a year, with the cost of an enhanced plan adding $100 to $300. Prices reflect not only coverage, but also a company's loss history, which is determined by how often an item breaks down and the cost to repair it. Some home warranty companies offer additional coverage for certain items, such as a well pump or pool, for an extra fee. Regardless of the type of plan, homeowners typically pay an additional service fee ranging from $50 to $75 for each repair job. This fee is charged for every service trip 30 days apart.

 It has been alleged that  NHSCA asked its members to refrain from participating in the story, but Arthur Chartrand, counsel for the NHSCA, repudiated that assertion, writing in an e-mail, "Our communique to all NHSCA members ... actually suggests that members reply, but stated, 'All members are free to make their own judgment call in regard to your inquiries.'"
Differing opinions
Twenty-four percent of Angie's List members responding to a recent online poll say they have a home warranty - and many echoed Shelton's sentiments, arguing they're a waste of money. Member Patrick McGranahan of Winters, Calif., says even though his new home purchase came with a warranty from American Home Shield, he found the policy to be underrated.
"I did the math, and I figure you're paying all this money for the warranty and then you pay $50 to $75 for every service call - it really doesn't add up," he says. "Plus, the people they sent to do the work were late and unprofessional. I got real put off."
Nearly two-thirds of members who took our poll say their home warranty came with the purchase of a house. "It's something I recommend on every transaction," says highly rated real estate agent Beth Smith Shuey of Keller Williams Realty in Charlotte, N.C. "But I warn my clients that not everything is going to be covered." Nonetheless, Smith Shuey says 95 percent of her clients who buy a home close on the deal with a warranty included. What most home owners are not told is that Most of the equipment in the home are covered by warranty of some type. HVAC systems are covered with manufacturers warranty ranging from 5 to 20 years and recently major components have life time warranty. Most home owners paying $5 to $15,000 for air-conditioning installation should not be paying for air-conditioning service for at least 5 years conclusing a new installation. Most contractore provide 1 year labor. Warranty for the best part comes from the manufacturer of equipment and is transfereable. Real estate companies who truly care for after sale service should provide information of benifit to their clients to include very attractive manufacturer and after sale warranties available from many license contractors.
The real estate connection
While home warranty companies often market their services to realty companies, neither individual agents nor brokers are permitted to receive referral fees for promoting one warranty company over the other. "In the past, warranty companies would offer real estate agents a fee from $40 to $75 that was typically paid after closing for each contract written," says highly rated Realtor Jason Bowman of RE/MAX International Inc., in Mason, Ohio.
In June 2010, the U.S. Department of Housing and Urban Development issued a ruling that home warranty companies could not pay real estate professionals for referrals. "I actually feel this is a great thing for our industry and consumers alike because Realtors can offer their customers better advice on warranty program decisions when the financial motive is out of the picture," Bowman says.
Like many Realtors, he relies on his past experiences when suggesting a home warranty company. "If there's a customer service issue relating to a particular warranty company, I won't offer their service," Bowman says. "On the other hand, I'll report positive feedback from past clients to new buyers."
Even with the new rule in place, some agents don't endorse them. "I think home warranty contracts are a good concept, but mislead buyers into thinking that they offer a guarantee on the house," says highly rated Realtor Jen Geisinger of Maple Grove, Minn. "I also think the fine print can be prohibitive to the needs of many situations that buyers are likely to encounter."
Warranty companies speak out
Not every warranty company offers coverage to homeowners nationwide, but the industry is regulated in all 50 states under consumer protection laws. Also, they're required to be licensed or registered by the department of insurance in 32 states, according to the SCIC. North Carolina regulates service contracts under the Attorney General, while Texas regulates them through the state's Real Estate Commission.
Gwen Gallagher, president of Old Republic Home Protection, says her company strives to provide comprehensive coverage, but inevitably some claims will be turned down and could result in unhappy customers. The most common reasons they deny service is because the item, such as a broken window, wasn't covered under contract, or the service, such as replacing missing parts or components, was excluded..
Home warranty companies pay the lowest cost to contractors for their services. For these contractors to break even they have to look for additional defects not covered by the warranty company. The covered items themselves are subject to the judgment of the Warranty Company representatives who is responsible for authorising the cost for the repair. These companies take a long time to pay contractors and attempt to pay in the minimum amounts possible.

Home owners can save time and money by dealing with license contractors with good reviews. Most airconditioning equipment are covered by 5 years labor and 5 years parts warranty. There are manufacturers warranty 10 years parts and labor. Amana offers 10 years standard components and life time major component warranty. Working with a service contract from a licence contractor, customers can be expected to pay about $250.. yearly for two service visits and no cost labor. Many contractors provide services that reduce operating costs and save customers money. With a maintenance contract you pay no deductible and covered repair is not considered.