An awesome business model - cougarguard.com — unofficial BYU Cougars / LDS sports, football, basketball forum and message board

marsupial · 11-01-2007, 06:17 PM

Home warranty companies sure have an awesome business model:

Sell home warranties for like $500. Then when something goes wrong with the house, charge $55 to send someone out to tell the homeowner that the thing broken is not covered under the warranty. If, against all odds, the thing broken actually is covered under the warranty, then offer to replace the broken thing with a cheap and tacky substitute that the homeowners will refuse to have in their home. As an alternative, offer a cash buyout that amounts to about one-tenth of the actual replacement cost of the broken item. Grrrrrr. I hate First American Home Warranty.

11-01-2007, 06:17 PM	#1
marsupial Senior Member Join Date: Jan 2007 Location: M-I-S-S-I-S-S-I-P-P-I... Isn't it so fun to spell? Posts: 1,701	An awesome business model Home warranty companies sure have an awesome business model: Sell home warranties for like $500. Then when something goes wrong with the house, charge $55 to send someone out to tell the homeowner that the thing broken is not covered under the warranty. If, against all odds, the thing broken actually is covered under the warranty, then offer to replace the broken thing with a cheap and tacky substitute that the homeowners will refuse to have in their home. As an alternative, offer a cash buyout that amounts to about one-tenth of the actual replacement cost of the broken item. Grrrrrr. I hate First American Home Warranty.