Insane!!! Free Home Warranties for all InterNACHI-only members and all their clients.

[Nick Gromicko]

Remember, I helped build MW for inspectors. We have no interest in selling warranties to homeowners. We want to give warranties to InterNACHI-only member's clients.

--If the inspector finds a potential problem and warns his client about it... his own inspection report saves his ****.
--If he fails to find a problem and fails to warn his client about it... MW covers it.

[Nick Gromicko]

And lastly, we built MW so that inspectors (who mostly don't live in areas where all the sellers buy warranties for all the buyers) can afford to add it into their inspection fee. I really don't think our inspectors will raise their prices $500 to pay for a similar coverage (at best) warranty. $17 is tough enough.

[Billy Boerner]

It's simple. Nick is stating this policy "MAY" cover your assets in the event you were negligent. If it doesn't now the lawsuit kicks in and E&O takes over along with the heavty deductible most people are required to carry. I can see it giving a home buyer some piece of mind however if I decide to start pushing them my website will explain in detail what's covered and what's not.

[Nick Gromicko]

The main reason to buy a Mountain Warranty is not to reduce your liability... although it does that anyway.

The main reason is to increase sales.

Think about it... your profit margin on a home inspection should be close to $150. Your risk cost should be less than $5 (a typical E&O policy for an inspector who performs 300 inspections a year sells for $3,000 which is at least twice the actual cost to insure the risk).

In other words, every inspection you perform comes with $150 in profits and $5 in risk costs.

Even if you think the warranty DOESN'T reduce your liability and even if you raise your fees only $17, just enough to cover the warranty... you still earn $145 on every inspection that touting the "free home warranty" brings in.

At $17, the math works.

[James H. Bushart]

Originally Posted by whandley

I'm guessing the large majority of NACHI membership will not involve themselves with something as questionable as this limited warranty program.

Which probably explains the "strategy" of giving away what cannot be sold.

In these days of homeowner discontent, mortage fraud and questionable real estate practices coming under federal scrutiny....the last thing most of us want or need is increased propensity for accountability for the actions/inactions of others.

Warranty companies do not make money from "paying out". The mystery Nick presents as to how they can profit from "giving away" a free warranty even adds to the loss of paying on a claim.

Why...after the inspection is over and I have moved on to other business...do I want to be called back and have to deal with an unhappy client who is upset that "the warranty I gave them" is worthless...in their opinion...because it will not cover the cost of replacing a sewer lateral that I had already disclaimed in my report?

[Nick Gromicko]

Well if you don't like Mountain Warranty... you'll really hate AHS.

My bet is that you don't ever offer any warranty Jim.

Fact is, offering a warranty increases sales and lowers liability. Business is not much more than simple math.

[David A. Andersen]

In the 10(+) years that I've been inspecting homes, I have yet to find a real warranty that protects everything in the house carte blanche!

I won't waste your time on the numerous stories about alleged home warranties. Of the several close calls my business experienced because of situations where the client's expectations were not met. The times that I received notices from a lawyer concerning lawsuits after the client failed to receive a claim on a pre-existing condition that was reported during the inspection.

I won't talk about the real estate agents that think home warranty covers everything and a home inspection is not needed. I won't talk about the irate telephone calls from some of these real estate agents I received when I mentioned the fact that the client should read carefully, the home warranty because everything is not covered the same.

I won't talk about my personal conflicts with home warranty companies (though they are posted elsewhere on this board).

Why are we trying to compare apples and oranges?
How can we expect a home warranty to cover something beyond its useful life? How can we expect a home warranty company to insure something "sight unseen"? How can we not expect the home warranty to hold some restrictions in exclusions to their coverage and stay in business?

The point is, home warranty companies pay out big bucks in repairs but they don't cover everything. The most important point is that you must understand what you're purchasing. My clients say "that's okay I'm getting a home warranty anyway", but none of them can tell me what their coverage is when asked! They're just told by their realtor, "that's no problem you're getting a home warranty anyway".

These warranties are useful to cover explicit problems. They all have their advantages and their restrictions and must be tailored to fit the particular clients needs. A one-year warranty on new appliances and new construction is unnecessary because there are already under warranty. But on the other hand, how can we expect insurance on a 21-year-old refrigerator in a 100-year-old house?

As Nick said, it's about marketing your services with a warranty.
As Billy said, he is going to put all the information on his website.
Mountain provides a short-term insurance policy on items not covered in other policies. Who does the short-term policy really protect? The home inspector. The guy that had something break as he walked out the door! Has anyone ever received a phone call stating "it worked before you got here"?

When you buy life insurance you have several options. Term life insurance is the cheapest but does not cover everything that other types of policies will cover. This is the same thing. It provides very economical coverage in the event of specific occurrences. If you want more, you need to pay more for the risk factor.
Again, this is about marketing. How many of you put on your website that you guarantee your service?

This is an inexpensive option that adds a warranty to your service.
If they already have a warranty, then the service is unnecessary.
If that warranty is so great, then there's no reason for a home inspection is there?
Warranty programs that base their paid claims on items that must be inspected first are the only warranties that are not going to come in looking for that speck of rust to deny the claim. They deny claims for a service man's comment that required maintenance has not been maintained. When your air-conditioner breaks, you had better call in air conditioning company and completely dismantle and clean and paint the unit before their service provider or arrives or they can simply say the unit has not been maintained.

Offering warranties can open up a can of worms for the inspector if not used properly, so they should be used with caution. If you advertise and use a warranty to make yourself "bulletproof" you'll probably get in trouble. These are the guys that will not fill up the whirlpool tub and turn on the jets because nobody will really know or complain that they didn't do it and they have a warranty to cover that stuff anyway.

It's always in the back of my mind when I close up an HVAC system after an inspection, what if someone topped off this unit with refrigerant just prior to the inspection so it's running properly for the time being? What can I say when the client calls several weeks later after the close of escrow in the unit no longer cools? How can I prove that it was okay at the time of inspection? How can I prove that I'm not responsible for the equipment that fails to operate?

Just as the roof may have water stains on the rafters, but it hasn't rained in 60 days, it's 140° in the attic and there is a new roof installed. Is the stain indicative of an active leak or is it from leakage of the previous roof, or did the new roofer screw up the flashing? Maybe a roof jack requires replacement.

Wouldn't it be nice to just turn this stuff over to a warranty company?

I hate warranties! I never purchase extended warranties unless it makes perfect sense to do so. So I'm not here trying to promote anyone's product. I'm just trying to promote a perspective.

But for the price, I have considered offering a warranty that requires prior inspection.

[James H. Bushart]

Originally Posted by gromicko

Well if you don't like Mountain Warranty... you'll really hate AHS.

My bet is that you don't ever offer any warranty Jim.

Fact is, offering a warranty increases sales and lowers liability. Business is not much more than simple math.

Time will tell.

[Nick Gromicko]

Excellent post David. I hate warranties too. But I like success.

Develop a widget that increases my profits through increased sales without increasing my costs... and I'm all ears.

[Dave Bush]

The way the disclaimer at the bottom reads, is IF an inspector calls out anything than it is not covered. In other words, if a perfectly good roof leaks then they will cover it, if you say there is anything wrong with the roof, they will not cover it. If you call out a furnace should be monitored because it is older but functioning it will not be covered. So if the roof is perfect and the furnace is new but quits or leaks, they will cover it.

[James H. Bushart]

Originally Posted by gromicko

Excellent post David. I hate warranties too. But I like success.

Develop a widget that increases my profits through increased sales without increasing my costs... and I'm all ears.

LOL...I think I just received an email from someone with the same philosophy.

FROM: DR. Micheal Ezikiel

AUDITING AND ACCOUNTING UNIT.
BANK OF AFRICA. (B.O.A)
OUAGADOUGOU BURKINA-FASO.


Dear friend,

I am Dr Micheal Ezikiel
the director in charge of auditing and accounting section Bank of Africa Ouagadougou Burkina-faso in West Africa with due respect and regard. I have decided to contact you on a business transaction that will be very beneficial to both of us at the end of the transaction.

At the bank's last accounts/auditing evaluations, my staff came across an old account which was being maintained by a foreign client who we learnt was among the deceased passengers of a motor accident on November,2003 and the deceased has been unable to run his account since his death.

The account has remained dormant without the knowledge of his family since it was put in a safe deposit account in the bank for future investment by the beneficiary.

Although personally,I keep this information secret within myself and partners to enable the whole plans and idea be Profitable and successful during the time of execution. The said amount was U.S $19.3M (ninetheen million three hundred United States dollars).

As it may interest you to know, I got your impressive information through the Bukinab chamber of commerce on foreign business relations here in Ouaga. Burkina-faso.

Meanwhile all the whole arrangement to put claim over this fund as the bonafide next of kin to the deceased, get the required approval and transfer this money to a foreign account has been put in place and directives and needed information will be relayed to you as soon as you indicate your interest and willingness to assist us and also benefit your self to this great business opportunity.

In fact I could have done this deal alone but because of my position in this country as a civil servant(A Banker),we are not allowed to operate a foreign account and would eventually raise an eye brow on my side during the time of transfer because I work in this bank.

This is the actual reason why it will require a second party or fellow who will forward claims as the next of kin with affidavit of trust of oath to the Bank and also present a foreign account where he will need the money to be re-transferred into on his request as it may be after due verification and clarification by the correspondent branch of the bank where the whole money will be remitted from to your own designation bank account.

I have decided the sharing as follows:I will not fail to inform you that this transaction is 100% risk free. On smooth conclusion of this transaction, you will be entitled to {39%}being (US$7,527,000.00)will be your share in respect of the account provision and your assistance rendered during the transfer of the fund into your bank account,{ 52% } being (US$10,036,000.00) will be my share being the codinator and the pillar of the transaction while the rest { 9% } being (US$1,737,000.00) will be shared to the respectable Organisations Centers such as Charity Organisation, Motherless Babies homes, and helpless disabled people in the World.

I will be monitoring the whole situation here in this bank until you confirm the money in your account and ask me to come down to your country for subsequent sharing of the fund according to percentages previously indicated and further investment, either in your country or any country you advice us to invest in. All other necessary vital information will be sent to you when I hear from you.

And i want you to assure me solemnly that you are a trsutwothy,reliable,honest and capable to avoid cheating me in this business.If you are really sure of your integerity,

Reply me through this my private Email michealezikiel92@yahoo.com <mailto:michealezikiel92@yahoo.com> immediatelly you receive this mail for more detailed information on how to process the transfer of the fund into your account will be.Am looking forward hearing from you.I look forward to receive your phone number and email so that I get back to you.
Yours faithfully,

Dr. Micheal Ezikiel

[David A. Andersen]

As far as I'm concerned...

If you call out a furnace should be monitored because it is older but functioning

...You should not be calling out a functioning piece of equipment.
All this "calling out" is just an attempt to cover your butt. Cover it with a warranty.

If it's that old the warranty won't cover it anyway.

When a warranty won't cover a unit because of its age, it also supports home inspector against claims because the equipment failed due to age rather than inadequate evaluation by the home inspector.

If a warranty won't cover it, why should you be expected to?

[nwagner]

The warranty is only for 100 days. How is this going to help the inspector who gets a call from a client on Day 115 demanding compensation for his 7 year old water heater that has a failed heating element?

[Nick Gromicko]

The warranty is only for 100 days. How is this going to help the inspector who gets a call from a client on Day 115 demanding compensation for his 7 year old water heater that has a failed heating element?

MW will help the inspector by explaining 2 things to the client:

1. A failed heating element in a 7 year old water heater is nothing that could have been discovered by an inspector 115 days before the failure.

2. The 100 day warranty is for 100 days.

Even an E&O policy wouldn't cover it.

[James H. Bushart]

Originally Posted by gromicko

MW will help the inspector by explaining 2 things to the client:

1. A failed heating element in a 7 year old water heater is nothing that could have been discovered by an inspector 115 days before the failure.

2. The 100 day warranty is for 100 days.

Even an E&O policy wouldn't cover it.

"Explanations" be damned. The client is still going to resent the "worthless" warranty passed on to him by the inspector. There are already "investigative news reports" on this.

Many of us go through great pains to explain to the client that the inspection is NOT a warranty. To turn around and provide one...one that covers only brand new items until they break...is a silly way to invite the client to expect more than just a home inspection.

If it were a good idea...I don't think you would be forced to give them away. You would find plenty of folks willing to pay the mere $17.