What to Do Before Closing on Your Home: Check Your Home Warranty Provider
Purchasing a home is an exciting milestone, but ensuring you’re protected against unexpected repairs is crucial. A reliable home warranty can offer peace of mind, but not all companies are created equal. Here’s a step-by-step guide to help you choose the right home warranty provider before closing on your house:
1) Is the Home Warranty Company Properly Licensed?
Unfortunately, some unlicensed “fly-by-night” home warranty companies operate without proper credentials. To ensure your protection:
- Check that the provider is licensed by the Nevada Department of Insurance (DOI). This is vital for pursuing recourse if a claim is denied improperly.
- Access a list of licensed service contract providers here: Nevada DOI Licensed Providers.
- For additional DOI information, visit: Service Contracts.
- If you’ve purchased from an unlicensed company, file a complaint at [email protected].
Additionally, verify the company’s Nevada State Business License and Clark County Business License:
- Nevada: Business License Search.
- Clark County: Business License Search.
2) Verify the Company’s Good Standing with the Better Business Bureau (BBB)
The BBB remains a trusted source for unbiased reviews, unlike online platforms that can be manipulated by employees or hired services such as Google, Yelp, Facebook, etc.
- Research the company’s reputation with the BBB: BBB Home Warranty Information.
- If the company isn’t listed or has a poor rating, consider it a red flag.
If the company doesn’t exist with the BBB, that is not a good sign either!
3) Read the Entire Contract Carefully
Before purchasing a home warranty:
- Verify which major systems and appliances are covered.
- Check for exclusions and deductibles.
Doing your homework now can save you from unpleasant surprises later when a costly system fails
4) Understand Pre-Existing Condition Clauses
Home warranty companies often deny claims by citing “pre-existing conditions.”
- If they dispute your home inspection report, they should conduct their own independent inspection before issuing the policy.
- If you encounter issues, contact your home inspector for guidance before paying the warranty company or their contractor.
5) If Your Home Warranty Company Denies a Claim…
… you may ask for another contractor within their network. If all else fails, request to speak to the customer services representative. You may also file a complaint with the Nevada Division of Insurance if the Home Warranty Company is being unreasonable if your complaint is just and fair.
Home warranty companies should be sending out licensed contractors for repairs. If the contractor does not provide proper service per NAC 624, you may file a complaint with the Nevada Contractor’s Board against the specific contractor. Also know the difference between a handyman and licensed contractor.
Also – always verify the licensing status of a Contractor before they enter your home!
Lastly…
Beware of Unlicensed Guarantees
Be cautious with any home inspection companies that provide “too good to be true” warranties or guarantees with their service. Nevada Administrative Code (NAC 645D.470.2): NAC 645D prohibits a home inspector to make warranties or guaranties of any kind.
All of the Above Being Said:
We always encourage our Clients to purchase a homewarranty plan to enjoy the benefits in the event of a major system failure. Not all Home Warranty Companies or Contractors are bad.
The fact is, systems that are running today may not be running tomorrow. Systems break during escrow, after a home inspection and after you perform final walkthrough on your new home and after close.