Texas Homeowners Discover Fault In Their Home Warranty

Texas homeowners are finding out that their home warranty may not be there when they need it the most.

According to a recent Click2Houston.com article, Houston resident Jena Goetz learned a hard lesson about home warranties when her air conditioner system went out last summer. The repairman sent by the warranty company claimed she needed additional work done before they could fix the issue. “In order to replace (the) coil that is covered under your home warranty, we have to do all this extra work adding up to $1,800,” she said in the article. 

Goetz ended up hiring her own repair person who fixed the coil and told her there was no need for any additional work which lead Goetz to believe that home warranties are simply a “scam” according to the Click2Houston.com article. 

Who Regulates Home Warranties?

The home warranty business is a $2 billion dollar a year industry and it riddled with complaints. The promise of having the major systems of your home protected against breakdowns is appealing but the reality is often different when a repair actually needs to be made. 

Complaints range from trouble getting service at all to shoddy work and a long list of exclusions that means homeowners end up paying for the most expensive repairs out of pocket. 

“The biggest concern I have about this is that people are purchasing this product with an expectation it’s going to be there when they need it and that actually ends up not being the case,” said Texas Rep. Tom Oliverson in an interview with Channel 2 Investigates. Oliverson is the Vice Chair of the Texas House Insurance Committee.

“It sounded like insurance, so we assumed that it was the Department of Insurance, but it turns out that it’s not,” Oliverson said in the Click2Houston article. 

According to the Texas Real Estate Commission, they have received over 1,000 home warranty complaints between 2010 to 2019, but they are very limited in the disciplinary actions they can take

The fact that no regulatory agency has any real control over warranty companies makes it difficult for homeowners who have been wronged. 

Arizona is Stepping Up

Less than honest home warranty companies are not just a Texas problem, they operate around the country and one state has decided to sue them. 

Mark Brnovich, the Attorney General for the State of Arizona has decided to fight warranty companies. He filed a lawsuit against New Jersey-based Choice Home Warranty in October 2019. While the company talks up the benefits of a home warranty on their website, they admitted they are basically selling service contracts which are not a warranty.

“To me, the lawsuit is about sending a message to other companies like this that if you’re going to scam people if you are going to rip them off if you are making misrepresentations, you will be held accountable,” Brnovich said in the Click2Houston.com article.

Brnovich believes that other AG’s may end up following suit. “I would not be surprised if you don’t see other AGs taking action,” he continued in the article.

In Texas, Goetz is in favor of lawsuits and stricter oversight of the home warranty industry. 

“I know that I am not the only one,” she said in the Click2Houston.com article. “I know that this is happening every day to all types of people, and I feel bad for the people that are getting taken advantage of.”