How to work a home warranty to get paid

PITTSBURGH — Elaine Frederick, of McCandless, spent a lot of time bundled up back in November when her furnace went haywire.

“My thermostat went crazy. It went from zero, all the way up to 90 (degrees), and all the way down, and up again,” Frederick explained.

But that was just the start of her trouble. She went without heat for almost two months, as she did battle with her warranty company.

“I called them and called them and you’re on the phone like an hour, and 40 people ahead of you,” she said.

Frederick got at 2-10 Home Buyers Warranty policy for free thrown into the deal when she bought her condo, but had no idea it would be so much aggravation to use it.

“I think I’ve aged 10 years having to put up with all this,” she said. “It’s ridiculous.”

She ended up paying a company she found herself to fix the furnace and sent the $611 bill to 2-10 hoping to get reimbursed. The company agreed to partially pay her back, offering only $230, because they said she didn’t use one of their ‘preferred’ contractors. She agreed, but then the check never came.

“Nothing but aggravation, stress, hours on the phone with them. Still no payment,” she said, annoyed.

That’s when she called 11 Investigates.

Feeling the Frustration

11 Investigates got a taste of Frederick’s frustration, when we sat with her for nearly three hours, while she called customer service. After two hours and 51 minutes, she was still no closer to a resolution.

“What a waste of time,” she said in disgust.

Unfortunately, she’s not alone. There’s an entire Facebook page set up for frustrated 2-10 customers with claims issues. It has more than 500 members.

Doing Battle to Get Paid

Pittsburgh real estate agent Michael Scholler has done battle with many home warranty companies over the years.

“I do see it a lot,” he said. “The call centers are always difficult to get ahold of.”

Scholler says persistence and patience are keys to getting through-- but you can also improve your chances based on when you call.

“I tend to find that reaching out on a Tuesday, Wednesday, or Thursday— not a Monday or a Friday— (is better),” he explained. “You almost can’t get a hold of them on a Monday, ‘cause everything breaks on the weekend.”

Despite the aggravation, Scholler says he often sees warranties pay off for his clients.

“I question it, but it has saved a lot of my clients a ton of money,” he said.

He says warranties can especially make sense for homes at least 10 years old.

“You’re going to start seeing, like, the hot water tank go; you’re going to probably, potentially need your first furnace repair real soon.”

Persistence Pays Off

Which brings us back to Elaine Frederick. 11 Investigates called and emailed 2-10 Home Buyers Warranty several times, trying to get answers about why the company never sent her check and why the process was so difficult. They did not respond to us, but a representative finally called Frederick to tell her the check would be expedited and mailed to her.

One week later, it arrived.

“I can’t thank you enough. All the hard work. I really appreciate everything you did,” Frederick said, thanking 11 Investigates. “I know I never would have gotten payment without you!”

After all that, the company actually tried to get her to renew her policy.

“I would never get them again. I’m just so happy that I don’t have to call them ever again!” she said laughing.

Watch Out for Up-charging

Another thing to look out for are contractors trying to up-charge you on a claim. Many home warranty companies use preferred contractors, and pay them a discount rate for volume business. To make up for the difference, some try to get you to pay more with add-on expenses.

That’s what happened to new homeowner Abby Henderson, of Castle Shannon.

When her hot water tank burst just before Christmas last year, the warranty company’s contractor tried to charge her an additional $825 , on top of her $100 deductible. The warranty company was going to pay just $600, for a grand total of $1525 for a hot water heater.

Sensing they were trying to take advantage of her, Henderson called Scholler, who was her realtor, and he stepped in to help.

“This contractor is double-dipping,” he said. “They were padding the installation of an overpriced unit.”

He got the warranty company to just send Henderson a check for the $600, and she got the hot water tank fixed on her own without having to pay more.

“It was so frustrating,” Henderson said. “I was really surprised that it took so much effort on my end.”

Another buzzword to look out for is ‘pre-existing condition.’ Scholler says push back if a company tries to deny your claim using that term.

“If it’s a pipe that burst behind the wall-- how do they say it’s pre-existing?”

He says it’s just a tactic some companies use to try and make you go away and pay for the repair on your own.

Cost-Benefit Analysis

A home warranty policy generally costs about $500-600 and covers items like your furnace, hot water heater, and electrical; plus, appliances— like your dishwasher, stove and microwave. Many times, however, you have to pay extra for things like your refrigerator, roof, and plumbing.

If you get a home warranty for free to sweeten the deal when you buy a home, that’s one thing, but if you’re trying to decide whether to buy a policy on your own, consider these factors:

  • 8-10 years can be the tipping point for repairs to start, so consider the age of your home and appliances.
  • At $500-600 a year for a policy, that can add up quickly if you don’t use the warranty. You could be better off saving that money for a rainy-day fund to pay for repairs as you need them. However, if you can’t afford to do that, a warranty can give you peace of mind to help you cover a major expense.

If you do get a home warranty, here are some tips on how to work that warranty to get paid:

  • Be patient & persistent. Expect customer service calls to have long waits, but don’t give up.
  • Try calling mid-week, not on Mondays or Fridays, as those days tend to be busier.
  • Watch out for up-charging by contractors. Do your homework, so you know how much a repair or replacement should cost.
  • Push back if the company tries to deny your claim using buzzwords like “pre-existing condition.”
  • Call your realtor for help, if you are treated unfairly. They often have more contacts with a company because they deal with home warranties often.