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Instilling Confidence in Buyers and Sellers—Home Warranties Cover All the Bases

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By Paige Tepping

In a low inventory market like we have now, savvy agents are using home warranties as a tool to ensure that their buyer’s contract is the one that’s accepted, especially when there are multiple offers on the table. The buyer agrees to pay for the home warranty, which is added as listing coverage that transfers to them—which protects the seller from the time the contract is signed through closing.

PT: When it comes to service, what is American Home Shield doing to ensure its customers receive the best possible experience?
MB: The customer experience is our top priority at American Home Shield, and we’re reworking processes across all parts of our operations to ensure they are in line with this commitment. For instance, in our innovation lab, we’re drilling down into the root causes of issues, validating opportunities and testing various approaches before rolling them out to the business. We’ve cross-trained our associates to handle more types of calls, made significant changes in scheduling to ensure we’re available when our customers need us most, and we’re taking a much more strategic approach to how we manage call volume, especially during peak times. We’re already seeing some dramatic improvements in year-over-year performance, our customer satisfaction scores are on the rise, and so are first year sales and renewal rates.

PT: What do you say to agents who don’t think their clients need a home warranty, or don’t trust home warranty companies?
MB: Granted, some people prefer to self-insure and are entirely comfortable taking risks. However, agents want to represent their clients to the best of their ability. Knowing the high chance that a client will experience a mechanical failure in the coming year, it seems only reasonable to make them aware that a solution exists.

Unfortunately, there have been situations in our industry over the years where home warranty companies have gone out of business and left customers hanging, or have provided poor coverage or service. As in any business, the experience and service can vary by company and product, and we encourage people to do their homework when choosing a provider.

At the same time, American Home Shield has been in business for nearly 43 years, and we know from experience that homeowners, both new and existing, will regularly experience mechanical failures. These can range in severity from a $100 repair to a $5,000 or more replacement—and either way, it’s an inconvenience to their clients’ lifestyle and budget.

PT: What do you say to those who give home warranties a bad rap when it comes to service quality or claims coverage?
MB: It’s frustrating, because as a whole, home warranty providers do a good job of taking care of their customers—and when something goes wrong, we work hard to make things right. I don’t want to oversimplify things, but I think misinformation plays a large part in this, especially when you consider that our customers place an average of two service requests a year, and those who use their warranty are more likely to renew than those who don’t.

Over the past five years, American Home Shield has paid over $1.6 billion in servicing our customers’ repair needs, and our percentage of claims denied is in the single digits. Unfortunately, too often, customers and even real estate professionals simply aren’t aware of exactly what their specific plan covers—which can lead to missed expectations.

That said, expectations are very important, especially in a service industry. At American Home Shield, the overwhelming majority of claims are handled seamlessly—but to the customer or agent who has had a disappointing experience, that point is irrelevant. In these cases, we do our best to resolve the issue and repair the relationship, as well as identify ways to improve going forward.

For more information, visit www.ahs.com/realestate.

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