Are Home Warranty Companies Regulated?

A home warranty company provides coverage services to your home’s appliances and systems, thereby reducing the risk of bearing huge and unexpected out-of-pocket expenses on repairs and component replacements of these home devices. Home warranty companies are therefore very beneficial to homeowners, but if they are left unregulated, they can get out-of-control which is problematic. This post answers your question of “are home warranty companies regulated or not?

The Beginning Of Home Warranty Regulation

The 1970s saw a boom in the real estate market, and that was when the home warranties came into being. US residents could now reduce their expensive repairs and replacement expenses with home warranty plans.

The first company to start the home warranty business was American Home Shield, and they were consequently the largest player for years. As many home warranty companies sprung up, there came a need to oversee these corporate establishments.

Are Home Warranty Companies Regulated? And by whom?

The home warranty regulation system varies from state to state. Some states have a governing body to regulate the activities of home warranty companies, whereas others do not. Moreover, different sectors in each state govern the home warranty companies.

For instance, the Florida Office of Insurance Regulation oversees all Florida home warranty companies as opposed to the Texas regulatory body, which is the Texas Real Estate Commission, regulating home warranty companies in Texas.

New York home warranty companies are regulated by the Department of Financial Services, whereas the Commissioner of Insurance of Georgia handles home warranty companies in Georgia.

Finally, there is the National Home Service Contract Association, which is a non-profit organization whose aim is to self-regulate home warranty companies. This organization sets down a code of ethics for home warranty companies to follow, and intervenes to provide guidance in their corporate processes.

The Downside Of Home Warranty Companies

Home warranty companies do get entangled in controversies, and this is because the industry is fairly small, with no one yet taking the full initiative to bring them under control.

This eventually has led to a lot of home warranty companies taking advantage of loopholes, resulting in distasteful customer experiences. Instances like scams, easy money, and assets stripped away, eventually culminate into liquidation.

How To Bypass The Flaws Of Home Warranty Companies?

The best way to avoid unscrupulous home warranty companies is to be alert at the start. First, check out their fine print, terms and conditions, and their exclusion list. If the terms and conditions seem unfair, unfavorable, or do not meet your requirements, then drop the home warranty company. Look for another one.

Another method to get a good home warranty company is to shortlist only the big and reputed ones. It is advisable to opt out of smaller home warranty companies as they lack track records and credibility, therefore making them unreliable.

When you are researching larger home warranty companies, make sure to go through their online reviews. Read about the various experiences that actual home warranty customers have gone through and make your decision after weighing the pros and the cons. Aggregator websites like HomeWarrantyReviews have a compilation of not just thousands of reviews, but also ratings, rankings, and comparison settings.

How To File A Complaint Against A Home Warranty Company?

There are many ways to get your grievances sorted against your home warranty company. If your real estate agent has a good working relationship with the home warranty company, then it is best to settle things through him. You can also address your problems through the Complaint Resolution Program of HomeWarrantyReviews and get them resolved by home warranty professionals as quickly as possible.

You can also contact the state insurance agency or the state attorney general to sort things out with the insurance commissioners.

Another drastic option is to file a lawsuit. This will take you to the local magistrate court to file a complaint where you’d have to represent yourself or get the help of a warranty lawyer and gather the letter from the insurance company.

Conclusion

The answer to your question: are home warranty companies regulated or not, is that it depends on which state the homeowner is living in. Some states have home warranty companies being regulated by authoritative bodies, whereas others do not. Nonetheless, it is best to be associated with a home warranty company that is properly controlled by a regulatory body.