It is the call most builders dread. A homeowner has a claim that the warranty doesn’t cover. How you respond can significantly impact your reputation and the customer’s experience. You want to say “yes” to make the homeowner happy. However, saying “no” is the financially responsible thing to do.
Fortunately, with the right approach, achieving both is possible.
PWSC’s warranty administration team compiled a list of the most common circumstances where the home warranty does not apply. In this article, we outline why and what you can do about it. Our goal is to help you maintain a positive relationship with the homeowner while still protecting your business.
- The Claim Belongs to the Manufacturer
Problem: Some system components and most appliances in a new construction home come with a manufacturer’s warranty. While the terms vary between companies, the warranty usually covers parts and labor for one to five years for defects that affect the item’s performance. While a manufacturer’s warranty exists to address the claim, the home warranty does not apply.
What You Can Do: Explain to the homeowner that the issue falls under the manufacturer’s responsibility. Provide the homeowner with clear instructions on how to contact the manufacturer and explain the problem. If necessary, assist the homeowner with documentation regarding applicable dates for the manufacturer’s warranty, such as when the coverage took effect. Assure the homeowner that while you cannot cover the repair, the manufacturer’s warranty exists to address the defect so they are still protected.
- Homeowners Insurance Applies
Problem: Homeowners sometimes submit claims for damages that should go toward their insurance policy. For example, water intrusion from a construction defect falls under the home warranty whereas damage caused by a storm becomes an insurance claim.
What You Can Do: Clarify the distinction between what the home warranty covers and what applies to the homeowner’s insurance. Quickly address any issues that do fall under the warranty agreement. Reassure the homeowner that while the home warranty does not cover the problem, their insurance provider is equipped to resolve the claim.
- The Warranty Period Is Over
Problem: All good things must come to an end. A typical builder warranty spans 10 years or through the statute of repose for the state where the home is located. However, during a builder’s warranty period, coverage changes, with fit and finish and systems coverage lasting one to two years. If a homeowner’s claim falls outside of the designated warranty period, the issue is not covered.
What You Can Do: Empathize with the homeowner but be firm on the warranty’s terms. Offer advice on next steps, such as recommending a reliable contractor or providing DIY instructions. Proactively address this kind of challenge by making homeowners aware that their warranty or a portion of the coverage is about to expire. Provide guidance on what issues to check for and the deadline for submitting a claim.
- The Issue Stems from a Lack of Maintenance
Problem: Warranties require homeowners to actively maintain the property. This includes preventative maintenance, actively servicing systems and appliances as required by the manufacturers’ warranties, and using things properly. For example, a manufacturer may deny a faulty water heater claim if it wasn’t drained every year as directed. Or let’s say little Joey has been flushing his toys and the plumbing backs up. The home warranty does not apply.
What You Can Do: The best offense is a good defense. Proactively educate homeowners on seasonal maintenance practices to help maintain their home. Outline how to properly extend the life of their systems and appliances, like regularly changing furnace filters, quickly fixing plumbing leaks, and maintaining proper lawn grading. This should help prevent these types of claims, but when one does come in, communicate why the issue is not covered by the warranty and offer guidance on how to avoid similar issues in the future.
- The Claim Isn’t Covered by the Warranty
The Problem: Sometimes a claim simply doesn’t fall under the warranty coverage or is explicitly excluded from the policy. For example, many warranties cover garage door openers, but not the door itself or the remote.
What You Can Do: First, ensure your team knows the specific terms of your warranty and can direct homeowners to that portion of the agreement for validation. Customer care teams who make it a habit to use the warranty document and identify specific coverage terms in their replies are proven to resolve claims faster with higher satisfaction rates. Help the homeowner find an alternative solution to make the repair, like recommending a contractor or offering DIY maintenance suggestions that commonly fix the problem.
Preserving Relationships While Protecting Your Business
Saying no to a homeowner’s claim doesn’t have to lead to conflict. By clearly communicating the reasons for the denial, offering helpful advice, and showing that you care, you can maintain a great relationship with the homeowner while still doing what’s best for your business. The goal is making homeowners feel supported, even when the answer isn’t the one they were hoping for. And, if your team could use a little support of their own, PWSC is here to help! Our FirstLink service ensures every request is handled quickly, professionally, and thoroughly.
