What a ripoff! Home Warranty of America ("HWA") charges you $400 for a home insurance/warranty policy. They call this fee a "premium", which implies they are actually providing some sort of insurance/warranty coverage.
We recently sold our home, so we cancelled our policy. With most insurance/warranty providers, when you cancel your policy, you are entitled to a refund of the prorata "premium" you paid in advance for the unused/remaining term of your policy.
Guess what? — when we sold our home and cancelled our HWA policy, they made us pay back the claims they had paid during the life of the policy. What a scam!
Imagine you had a car accident and filed an insurance claim. Then suppose 6 months later you sold your car and cancelled your insurance — and suppose the insurance company made you pay back the money they paid out on your claim 6 months ago! Unbelievable!
Insuring against "claims" is the whole reason people purchase insurance/warranty policies in the first place! Insuring against these situations is why people pay the insurance/warranty company a premium! This company is despicable.
Since you are forced to repay any claims when you sell your home and cancel your policy, in essence, HWA is NOT even an insurance/warranty provider. They basically just charge you an annual fee. They provide no insurance or warranty because once you sell your home and cancel the policy, they are going to get paid back all the claims they paid.
I'm just lucky I discovered all this before something really terrible went wrong with my home, only to find out I had no real coverage.
In sum, I guess as long as you NEVER sell your home, you should be in good shape with these scumbags. Unbelievable.
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