ACHRNEWS

Texas home warranty calls on the rise

August 9, 2000
DALLAS, TX — The Texas Warranty Association (TWA) reported that service calls from residential service contracts have more than doubled in the past five years. According to TWA data, Texas homeowners made 548,324 service calls in 1999 compared to 253,553 in 1995.

The amount of money paid out in claims in Texas during 1999 also rose dramatically, according to the TWA. Approx-imately $62 million was saved by Texas consumers on repairs and replacement last year, well over three times what was paid out in claims during 1995.

“The dramatically increasing use of residential service contracts by individual Texas homeowners reflects a growing understanding of the coverages and provisions of our product and the value-added benefits they provide,” said Sharon Harrison, TWA president and owner of Nation’s Preferred Home Warranty.

Harrison added that there is a growing awareness among consumers that there is a high likelihood (in over 60% of sales) of an average of two major items in the home failing during the first year of ownership. TWA figures showed that nearly two service calls are made per household per year with the average claim in 1999 being $112.98.

Harrison added some other reasons for the surge in service calls. “We have an average of 300 families moving to the Dallas area every month,” she said. “We are also seeing an increase in the number of renewable warranties, which people keep after a home has been sold, for example.”

She said she works with four contractors in the Dallas area and guarantees them a yearly income.

“I pay technicians for each house for an entire year, not per call,” she added. “So every month they get a check from me, even in slow times.”

Harrison also noted that the consolidation trend in the hvacr industry has drained the availability of experienced technicians, driving up the cost of contractor-supplied warranties.