What is home warranty and how can it help you to save money?

Purchasing a new house and having to worry about the unexpected repairs to the major system and appliances that may occur after you enter your new dream home is never fun.The chances of facing failures within these systems or appliances are very likely when you purchase a home that isn’t brand new. So the question is how to get protection against these unanticipated eventualities that may at any time bring you under financial and psychological stress.

The answer is straightforward “Home Warranty“.

warrantech

But what is this home warranty and how can it save you money?

Today we will answer these important questions.

Home Warranty is a contract signed between a homeowner and home warranty company. It provides cover against the unexpected repairs and also replacement service and therefore protects against the failure of major appliances, as well as plumbing and electrical components.

Let me make it clear that home warranty is completely separate from homeowner’s insurance.

Home Warranty:

With home warranty you get discounted, low cost repairs and replacement services.

It Covers:

  • Heating appliances
  • Water heaters
  • Plumbing and electrical systems
  • Kitchen Appliances like ovens & Cook tops
  • Garbage disposals
  • Ceiling fans and exhaust fans

Homeowner’s Insurance:

It acts as a shield against natural catastrophe and tragedy.Protect your Appliances

It Covers:

    • Structural damage to property
    • Liability Coverage
    • Jewelry (To some value)
    • Protection against theft, accident, lighting etc.

How home warranty saves money?

Home warranty costs just a few dollars; price range normally varies from $200 to $500, depending on coverage. Under a few circumstances like special offers, you may get more coverage for lesser money or discounts.Breakdown of appliances can cost you both in cash and time. A study says that probable chance of breakdown of an appliance older than 3 years is twice a year, this can make you lose considerable amount money and time too. Think how much time you will waste on finding a right repair shop and to find a substitute for the device.Home warranty is no doubt a bang for your buck!

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Branding of Product Protection Programs

A recent trend in the service contract industry is the emergence of administrators attempting to create a strong brand identity with consumers. Many administrators are working diligently to create brand recognition for their organizations by branding the protection offerings they sell through retail partners. The question is often asked, “Is this new approach in the best interest of the retailers?”
Warrantech USA  Third Party Extended Warranty Giant
AMT Warranty and its subsidiary Warrantech’s view is that the recent “brand building” business models employed by many administrators in the industry serve only to benefit the administrators and not their retail partners. This belief is derived from our core philosophy about the purpose of service contract programs. It’s indisputable that service contract programs should provide important incremental revenue for retailers. However, our view is that a well-designed and maintained service contract program should drive customer loyalty and retention for the retailers selling the service contracts.

We view each service contract claim as an opportunity to enhance the trust between a customer and our retail partner who sold the underlying product and associated service contract. Product failures happen. When they do, customers feel a level of frustration. While it’s true that the retailer is generally not the manufacturer of the product, customers often associate the product issue with the retailer who sold it to them. We believe that the solution to the product failure is best provided through a retailer-branded service contract in order to reestablish the trust that may have been diminished by the product failure. As a result of the service contract, retailers (through their administrator) are given the opportunity to engage in a highly personalized marketing campaign with a customer who at that moment may be their biggest detractor. We view this as micromarketing with macro effects.

In the emerging administrator-centric model, the solution is provided to the customer under the administrator’s brand. The positive customer interaction and goodwill generated from resolving the customer’s issue serves only to enhance the value of the provider’s brand. That goodwill is retained by the provider, even after their relationship with the provider has ended. Even more problematic is that the administrator may also be marketing service contracts directly to consumers, including the customers of their retail partners. In essence, by agreeing to market service contracts under the administrator’s brand, retailers could be promoting a competitor’s offering to their customers. Moreover, the retailer has established a new relationship between their customers and a potential competitor. We feel that the resulting consequences for permitting administrator-branded service contract programs will have long-term financial implications for retailers as the strength of their administrator’s brands increase in the eyes of the retailers’ customers.

While the desire of administrators to build their own brand value is understandable, retailers should be wary of the consequences.