Archived Copies of Warranty Week

December 2002 to Today

Nine-Month New Home Warranty Report: Claims, accruals, and reserves continue to see a pattern of steady growth, despite many economists' predictions of an impending recession. Accruals per home sold continue to increase, though inflation and rising home prices mean that the accrual rate per dollar of revenue has decreased.
January 19, 2023
Mid-Year HVAC & Appliance Warranty Metrics: The totals and averages are moving in response to the ups and downs of the top manufacturers. But they didn't move much in response to the pandemic or the lockdowns that follows. At the same time, for at least one top home improvements retailer, the extended warranty business is booming.
October 21, 2021
Mid-Year New Home Warranty Report: Some homebuilders hit the bullseye every quarter with their warranty accruals. Others oscillate wildly, allocating way too much one quarter and next to nothing the next. And while new home sales are soaring, warranty expenses are not, suggesting either exemplary levels of quality or more inefficiency. gyrations.
September 23, 2021
American Home Shield During the Pandemic: While sales of existing homes dipped during the worst of the lockdowns, they soared for the rest of last year. But while home warranties have historically been closely tied to the sale of existing homes, American Home Shield has moved on to selling the annual policies directly to homeowners staying put, and then encouraging those homeowners to renew year after year.
June 10, 2021
New Home & Building Materials Warranty Report: What you won't see in this week's collection of warranty expense reports are soaring or plunging warranty metrics. Most of the building trades' warranty expenses were fairly stable in 2020, with those metrics generally rising or falling by 10% or less. But just as there are exceptions to every rule, there were also a handful of big moves up and down last year.
May 6, 2021
New Home Warranty Report: Because new home builders were so thoroughly mauled by the effects of the Great Recession, one would think they would also have suffered greatly during the pandemic. But one would be wrong, because sales are up, and warranty expenses have more or less kept pace.
March 11, 2021
High-Tech Electronics Warranty Snapshots: While the pandemic of 2020 affects everyone all over the world, not every company or industry has been equally affected by all the stay-at-home orders. Product sales and warranty accruals traditionally move up or down together, but that's not happening to every company or every industry this year. Instead, some are up and some are down, with no visible pattern.
December 3, 2020
U.S. New Home & RV Warranty Report: Last time, the recession hit these industries hard. This time, there's been an impact, but not as severe, at least when looking at their warranty metrics. RV sales have tanked again, but new home sales are actually rising, even in the midst of the pandemic lockdowns and the work-at-home mandates.
October 15, 2020
Homebuilder Warranty Report: As happened in 2007, the warranty metrics of the U.S.-based single-family home builders seem to have hit a bit of a plateau in 2019. Unit sales and warranty claims are up, but all the other metrics are little-changed from 2018 levels. And now, it's hard to imagine how 2020 will turn out.
March 12, 2020
OnPoint Warranty Aims for the Connected Home: Not only is Louisville the headquarters for so many warranty experts, it's also the city they return home to after their excursions to other cities. OnPoint, in fact, launched last year after two of its co-founders who were on opposite coasts simultaneously realized there really is no place like home.
December 12, 2019
CCHS Changes Name to Cinch Home Services: Cross Country Home Services, a top home warranty provider, has changed its name to highlight its effort to leverage web and mobile technology to improve the customer experience and make its services a cinch to use.
October 31, 2019
Homebuilder Warranty Report: All the metrics were up in 2018, and the growth continued into the first quarter of 2019. Claims and accruals are back to pre-recession levels, and warranty reserves hit a new record high. Meanwhile, the level of warranty expenses per new home sold show some curious and sudden spikes for some builders and long-term stability for others.
June 13, 2019
Home Service Technology: How Smart is Your Home? The Top 5 Ways Technology Will Transform the Home Warranty Business
January 3, 2019
New Home Warranty Expense Rates: Some industry metrics are at their highest level in more than a decade, and one set a new all-time high. And none of the builders are using the sleight-of-hand accounting tricks they employed before the last recession. So is there any substance to these talks of an imminent industry downturn?
November 29, 2018
ServiceBench Signs HomeServe: When it came time to upgrade its field service management system, the home warranty company turned to Asurion's ServiceBench unit for a cloud-based service platform that could connect its customers, contractors, and service center team, helping them to make sure that the right contractor is assigned for the job and that they show up at the appointed time.
August 23, 2018
Mobile Home Warranty Expenses: While much of the industry collapsed a decade ago, the five large manufacturers that remained in business have made a steady comeback. Last year, claims and accruals finally surpassed their pre-recession peaks, even while most of the remaining manufacturers have been able to keep those expenses steady as a percentage of sales.
August 9, 2018
Homebuilding Warranty Report: Warranty expenses are rising but so are new home prices, keeping the average amount of money accrued industry-wide after each closing relatively steady, and allowing the accrual rate as a percentage of revenue to actually decline a bit. But many homebuilders continue to raise and reduce their warranty accruals rather impulsively, and sometimes skip them altogether.
June 28, 2018
ServiceBench Signs Cross Country: While the appliance service contract and home warranty businesses have remained separate and distinct, the products they protect are frequently the same. Now, the crossover between the two is increasing, with home warranty companies linking to the network used by many service contract administrators, and retailers selling home warranties in their stores.
February 8, 2018
Service Contract Market Size: There are signs that the market is topping out at current levels, although home warranty sales continue to soar. Other types of protection plans, such as vehicle service contracts, mobile phone insurance, and extended warranties for brown and white goods, are no longer growing like they used to, though jewelry and furniture protection programs showed slight growth.
February 1, 2018
Aviation Warranty Association: Commercial airline warranty managers met in Chicago to discuss issues with plane and parts manufacturers. Also, some tips on home warranty regulations, and links to a guide to how each U.S. state oversees consumer service contract companies operating within its borders.
December 14, 2017
New Home Warranty Expense Rates: Last time there was a recession, the warranty metrics of new home builders flashed danger signals more than a year before it officially started. Currently, there's nothing to worry about, by the looks of the latest industry data.
October 12, 2017
Service Contract Insurance Stocks: Though there are very few publicly-traded companies that derive most of their revenues from sales of extended warranties, almost a dozen public companies have a significant share of the business. Whether it's from home warranties, auto, electronics or mobile phones, the success of their protection plan sales efforts provide investment opportunities to outsiders.
September 28, 2017
New Home Warranty Report: With products such as single-family homes, it's possible to measure warranty accruals not only per dollar of revenue, but also per unit sold. And then it becomes clear which companies have mastered their warranty cost estimation process and which are still making it up as they go along.
June 8, 2017
Building Trades Warranty Report:  Unlike most other industries, in the new home construction business, the builders have lower warranty expense rates than many of their suppliers. But the makers of appliances and heating/cooling systems are now cutting their costs and narrowing the gap between their expense rates and those of the makers of fixtures, furniture, and building materials.
April 27, 2017
New Home & Building Materials Warranty Report: The name of the game is stability. Some of the builders and their suppliers have gotten very good at accurately predicting their future warranty costs and keeping them stable. Others let them rise and fall without much of a thought about warranty management. And it's easy to see the difference relatively quickly in a chart.
May 26, 2016
Appliance Protection Plans: When it's all counted together, a huge amount of money is being set aside to pay for product repairs. Manufacturers finance their warranties and consumers can purchase additional protection through either service contracts or home warranties. It all adds up to about $6.77 billion spent last year on protection plans.
January 28, 2016
Home Warranty vs. Homebuilders' Warranties: When it comes to protection plans, consumers spent over $2 billion on home warranties last year while builders spent roughly $1.5 billion on warranty claims. Home warranties are an essential part of a sales transaction in some states, and homebuilder warranties are a major attraction for new home buyers. But most existing homes aren't covered by a protection plan, and the warranty costs for most new homes aren't reported publicly.
January 21, 2016
Warranty Accruals for New Homes: When a new home is sold, the builder sets aside a specific amount of money in the form of warranty accruals to cover its predicted warranty costs. Some builders do a consistently good job, accruing roughly the same amount per home sold from one season to the next. But others raise and lower their accrual rates over incredible ranges that seem to have little to do with predicted warranty costs.
August 13, 2015
Home Appliance & HVAC Warranty Report: There are a few very large companies with operations in multiple industries that make it difficult to examine just the warranty expenses of the major appliance and HVAC companies. But if we set them off on their own, we can calculate industry averages for the expenses of others.
June 4, 2015
New Home & RV Warranty Report: Put a home on wheels and its warranty costs rise. While the warranties on traditional site-built homes typically cost the builder about one percent of selling price, the warranty cost of mobile homes is somewhat higher. And the warranty cost of modular, prefabricated homes may be highest of all.
May 21, 2015
New Home Warranty Accruals: While the average homebuilder sets aside about one percent of revenue to cover warranty costs, the average new home is expected to cost around $2,500 over the life of its warranty. Luxury homes will cost more, but even some average-priced units have high warranty costs. It all depends on the builder.
December 18, 2014
Warranty Accruals for New Homes: Sometimes they set aside too much and sometimes they set aside too little. All but a few homebuilders seem to lack any sense of aim when it comes to determining how much to accrue for each new home they sell.
July 24, 2014
Aerospace & Appliance Warranties: From airplanes to air conditioners, each industry has a typical cost of warranty based on the product it makes and what kind of customer it attracts. Business-to-business products such as airplanes have lower expense rates than consumer-facing products such as home appliances.
February 6, 2014
New Home Warranty Report: Sales are rising and home prices are increasing, but warranty costs are remaining the same. So the cost of new home warranties as both a percentage of sales and on a per-home basis are declining, in some cases to record low levels. Is this the beginning of a long-awaited recovery in the new home industry?
January 30, 2014
Food Service Equipment Warranties: The commercial appliances used in restaurants cost more to buy but less to keep in good working order. Over the past 10 years, the average warranty expense rates for professional food service equipment has been less than half as much as for home kitchen appliances.
June 13, 2013
New Home Warranties: Sales are rising and so are some warranty expenses. Builders and their suppliers, slammed by the recession, are getting back to normal. But who is figuring out their accruals per home and why are they doing it so badly?
April 18, 2013
Homebuilding Warranties: The data has yet to take an upturn, but at least it's not getting worse. Still, during the depths of the recession some of the homebuilders made some curious decisions about how much warranty expense they expected per new home sold.
August 16, 2012
New Home Warranties: The new home industry is like the car industry without a bailout: stuck at the bottom with no improvement. Warranty expenses continue to contract, but so does sales revenue. And some companies seem to be artificially managing their accrual levels.
May 10, 2012
New Home & RV Warranties: When sales were falling, builders cut their warranty accruals. But, worried by claims payments that didn't fall as fast, they didn't cut accruals enough. So now some have built up excess levels of warranty reserves that may be in the multiple millions of dollars for at least 10 homebuilders.
January 5, 2012
New Home Warranty Report: New home sales continue to fall and so do warranty costs. As homebuilders wonder if this is the bottom of the economic cycle, we wonder whether they may be keeping more warranty reserves on hand than they need.
September 8, 2011
Appliance & HVAC System
Warranty Report: Every journey includes a few bumps, and both appliance and HVAC makers have hit a few in the past couple of years. But like other building material suppliers, they're doing much better than the homebuilders, because they have both home renovations and replacements to fall back on.
June 2, 2011
Fixtures, Furniture & Building
Material Warranty Report: Sales have fallen but warranty costs aren't falling as fast. Still, it's not as bad as things in the new home industry, because suppliers can fall back on existing home renovations.
May 26, 2011
New Home Warranty Report: Though sales keep falling, claims are rising after several years of declines, and the accrual rates are holding steady. So is the worst over? Or are there homebuilders out there with bigger problems ahead of them?
May 19, 2011
Home Warranties for Appliances? Though home warranties are mainly for heating and cooling systems, and are closely tied to resales of existing homes, their ability to cover major appliances overlaps somewhat with store-bought extended warranties. Or does it?
January 27, 2011
New Home Builders & RV Makers: Even among the survivors of the Great Recession, warranty costs are now rising to alarming levels. And for some builders, home sales are still falling year-over-year. The result is a state of affairs where warranty work is financed from a shrinking pool of reserves.
October 14, 2010
GMAC Service Contracts: While the huge downturn in GM's auto sales hurt GMAC's service contracts, what forced the finance company to seek a TARP bailout was a really bad bet on home mortgages. Now the government-owned company has become a bank and is pursuing non-GM dealerships.
June 17, 2010
Motorcycle Service Contracts: As with passenger cars, the policies exclude consumables, accidental damage, and routine maintenance. And as is done with RVs, they are starting to cover perils such as being stranded far from home. But some say that takes them dangerously close to the line between service contracts and insurance. Others wonder if these new bells and whistles are all that necessary.
May 6, 2010
Home Warranty Market Share: While American Home Shield continues to dominate, electrical and water utilities are shaking things up with the growth of their wire and pipe protection services. And despite a continuing multi-year dip in home sales, the home warranty industry set a record this year with $1.5 billion in premiums paid by consumers.
December 22, 2009
Home Warranties & Foreclosures: As the industry looks for a way up from the bottom, home warranties may become a valuable selling tool. Buyers, worried about the damage done by departing owners, vandals, and the weather, might appreciate the coverage of a home warranty. Industry insiders, meanwhile, report that claims costs on foreclosures aren't that different from their other policies.
December 3, 2009
Home Warranty Insurance: While our American readers go on holidays to eat turkey and watch football, we're shifting our focus to how the governments of New South Wales and Ontario have gotten deeply involved in new home warranties. Both require those warranties to be insured, but that hasn't worked out as well in Australia as it has in Canada.
November 25, 2009
Home Inspection Warranties: It seems like a natural pairing. First the home inspector eyeballs the appliances, and then the home warranty company agrees to cover them. But it's not so simple in a business where honest advice is hard to find, and wariness about conflicts of interest is everywhere.
November 19, 2009
Home Warranty Association: Why are at least 90% of existing home sales in California covered by a home warranty? A mix of court rulings, government regulations, and industry response seems to have reassured home buyers that home warranty companies are both willing and able to pay claims. And thanks to a statewide educational effort, the realtors are able to explain how it all works to their clients.
November 12, 2009
Home Warranty Scam? There are good extended warranty companies and there are bad extended warranty companies. One of the worst seems to have a policy of denying all claims over $100 for what at first seem like legitimate reasons, and then hiding from the angry mob behind the anonymity of its web site, toll-free number, and post office box.
November 5, 2009
New Home Warranties: One CEO recently said the worst of this cycle may be behind us. In terms of sales decreases and price declines, maybe so. But in terms of warranty costs, the worst is right now, as builders have less cash to pay for warranty work on units they sold at the end of the boom years. And then there's the question of how costly the defective Chinese drywall will turn out to be to replace.
September 24, 2009
Automotive Warranties: With GM now government-owned and several mobile home makers trapped in bankruptcy, industry-wide warranty statistics are losing their meaning. And thanks to the distortions caused by massive sales declines this year, claims rates have also lost much of their relevance during this recession. But among at least the well-run warranty providers, accrual rates have remained proportional to sales rates and quality levels.
September 10, 2009
Homebuilders' Warranty Accruals: Rather than looking at warranty costs as a percentage of sales, would it be valid to calculate warranty costs per home? Using such a metric makes some homebuilders look very precise and consistent, while others look like they're just guessing how much to accrue per home.
April 23, 2009
Flat Rate Extended Warranties: For shoppers, the choice at the cash register is to say yes or no. The competition is between administrators vying for exclusive contracts with the retailers. But now there's a new choice, for consumers to go home and buy their extended warranties over the Internet.
August 7, 2008
RV & New Home Warranties: Sales are declining so claims rates are rising. But a few homebuilders have radically cut the amount they set aside per unit sold, raising suspicions that they're intentionally estimating low. Meanwhile, homes on wheels continue to show higher warranty costs.
June 20, 2008
Green Warranties, Part Three: To help the environment, extended warranty administrators are stepping up to offer customers gift cards in return for their waste computers and cameras and more energy-efficient replacements for their unrepairable home appliances.
May 30, 2008
New Home & Appliance Warranties: At the midpoint of 2007, sales are falling faster than claims can be reduced, driving claims rate percentages upwards for many companies in the building trades. But unlike in the automotive or computer industries, claims in this sector were always rather evenly distributed among new home builders and their suppliers.
September 25, 2007
New Home Warranties: While sales are declining, warranty accruals are declining even faster. Is it because of warranty cost cutting? Could it be better quality construction? Or are they simply putting less aside and hoping that nobody notices? Also, a letter to the editor about compliance with state laws on service contracts.
August 8, 2007
New Home Warranties: Pre-fab and mobile homes have much higher warranty costs than site-built homes. But even for site-built homes, there are big differences between the builders in the way they save and spend their warranty funds.
April 24, 2007
Television Warranties: Bigger is usually better, when it comes to TV warranties. While the old tube TVs are more or less disposable, flat screen vendors usually either fix them in the home or send someone out to pick up the units that fail. And while a year is the most common warranty period, several TV manufacturers issue multi-year warranties on their premium lines.
September 7, 2006
Warranty Inspections: Crawford and Company, already a major player in claims administration services , and home inspections, wants to go deeper into the warranty business.
May 31, 2006
Warranty Claims Automation: For a motorcycle manufacturer and a home appliance manufacturer, it wasn't so much that their warranty systems were broke or that their costs were rising. It was just that their old warranty processes were inefficient and couldn't keep up with company growth.
April 4, 2006
New Home Warranties: Is there any correlation between what a company spends on warranty and the satisfaction levels of its customers? For some, fewer claims equals happier customers, but for others, there does seem to be such a thing as not enough warranty.
September 20, 2005
Service Dispatch: With home appliances, warranty work almost always involves a housecall. Claims administrator ServiceBench has turned the dispatch of service technicians into a strategic advantage.
November 3, 2004
Home Warranties:  Three decades ago, American Home Shield, now part of ServiceMaster, invented a new category of extended warranties, covering the major systems and appliances in a home but not the home itself.
October 13, 2004
Warranty Promotions: Once an afterthought for both manufacturers and customers, warranty is becoming the simplest way to express the quality of a product. Lengthened warranties, which began as a bid for market share by certain auto importers, are now spreading to computers and home electronics.
September 21, 2004
Home Warranty Claims & Accruals: Homebuilding, heating and cooling each have their peak seasons. But do warranty claims for new homes and HVAC units also have a peak season? Recent data suggests that claims actually peak later in the year, months after sales do.
August 31, 2004
Home is Where the Warranty Is: Most of the major homebuilders recently reported details about their first quarter warranty spending. Here are the results, organized into segments for site-built homes, motorized recreational vehicles, and prefabricated/manufactured homes.
June 16, 2003