NHSCA Announces Accreditation Program for Home Service Contract Providers

Sept, 2019 – Lorna Mello, President of the NHSCA announced this month “The NHSCA is taking a major leap forward with its accreditation program.  Regulators and Legislators have asked the NHSCA to develop a formal program of compliance and standards within the home warranty industry, and we responded.”  On September 5, the NHSCA Board of Directors adopted the program for implementation immediately.

“The new NHSCA accreditation essentially becomes the “good housekeeping” seal of approval for serious and responsible home warranty providers” reports Richard Adams, NHSCA Vice-President and principal of National Home Guaranteed of Utah. Adams added “My company has already been through the process and among the first to be accredited. I am proud of that.”

Art Chartrand, Executive Director and Counsel for the NHSCA reports the program is designed to benefit not only providers, but also to assure the consuming public and regulators as well.  “The home service contract industry is regulated in every state by various agencies, but they cannot do all the review and monitoring. They have to rely upon the legitimate industry to help police itself.”   Chartrand says the program is a positive thing and even the best of companies will benefit from a top to bottom review of laws, regulations, contracts and compliance.

“The award of the NHSCA accreditation logo demonstrates to consumers and the industry our membership’s commitment to proper regulation and compliance” says John Walsh, General Counsel for NHSCA member Cross Country Home Services, Inc. based in Florida.  Walsh, also the NHSCA Treasurer/Secretary added “NHSCA membership is what REALTORs look for when recommending a home warranty provider. This program is just another step forward to assure regulators and consumers we take our responsibility seriously to meet their expectations.”

Current NHSCA member companies have until May 1, 2020 to complete the audit and receive accreditation. The first phase of accreditation is voluntary and good for five years. For new applicants to the NHSCA,  the audit and accreditation will become mandatory including an on-site stand down review of operations.

About the NHSCA

The National Home Service Contract Association (NHSCA) is a non-profit 501(c)(6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry and consumer information, visit http://www.homeservicecontract.org.

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Home Care Made EZPZ

Homes need constant care and home service contract makes budgeting “EZPZ.” by: Arthur J. Chartrand*

Buying a home can be a challenging process but selecting a home service contract shouldn’t be. Thankfully the National Home Service Contract Association (NHSCA) has made the process easy. As a matter of fact, they have made it “EZPZ” for you. (Easy Peasy, if you are not into the acronym thing.)

Homebuyers need only look for the NHSCA logo which is granted to member companies that agree to adhere to sound and ethical business practices. No company can buy an NHSCA logo¾they have to earn it. Companies are vetted by peer review which means that even their toughest competitors have to approve of them. Onsite office audits and visits to member offices by NHSCA counsel are common. Adhering to a code of ethics, compliance with all state laws and regulations and fair advertising practices are just a few of the requirements.

We tend to trust when an electrical appliance is “UL certified” or a household product gets the “Good Housekeeping Seal of Approval.” The NHSCA is the seal of approval for the home service contract industry (often referred to in real estate circles as a “home warranty”).

Media often cover stories about consumers being ripped off by an unscrupulous financial adviser, home contractor or auto mechanic.  Is everyone in these professions bad?  Clearly not. The consumer simply lacks a knowledgeable reference or takes the wrong approach. Asking for input from a trusted neighbor or a real estate agent is also a good idea. Caution should be utilized when using online sources where marketing and advertising dollars can impact ratings.

The same goes for Google searches. Trusting a company just because they pop up as the number one ad sponsor does not mean they are the best choice.  Unfortunately, some companies spend millions of dollars on meta data and search engine optimization rather than focusing on good service.  If you research Google to a greater degree you will note government sanctions against home warranty companies with names like “select,” “secure” or “choice” in them.  Educate yourself and read the full story.

The NHSCA represents the highest standard in home service contract protection and works to promote the same throughout the industry. There are a few very good companies who are not yet members of the NHSCA. Accordingly, the NHSCA is constantly reviewing companies and targeting the finest, legitimate and responsible companies for membership.

The NHSCA takes fraud seriously. It continually monitors the industry and works cooperatively with government officials as well as consumers in a robust effort to combat fraud.  To see its most recent effort simply visit www.homeservicecontract.org  Marginal providers just won’t come near the NHSCA.

NHSCA members serve nearly five million households and pay out nearly two billion dollars in service claims every year. If a consumer ever has an issue with a service by an NHSCA member, the NHSCA website provides an avenue of communication direct to the top of its member companies.

So look for the NHSCA logo when picking a home warranty company. Or just think  “EZPZ.” In fact, if you forget NHSCA or www.homeservicecontract.org, just remember “EZPZ.” Go to EZPZhome.organd you will find the most qualified and reliable providers in the industry. If that isn’t easy enough, visit EZPZhome.org.  How EZ is that?

The NHSCA is an IRS registered 501 (c)(6) trade group of highly selected and premier providers of home service (warranty) contracts. The NHSCA is based in the heart of Americaat 10000 Marshal Drive, Lenexa, KS 66215 with members serving consumers throughout the United States.

For more information or an interview, contact:
Joy L Moore, Chief of Staff NHSCA
10000 Marshal Drive
Lenexa, KS 66215
Ph: 913.871.5600 FAX: Use Email
joylmoore@mac.com

* Arthur J. Chartrand is an attorney, consumer rights advocate, former national radio talk show host and counsel to the National Home Service Contract Association

Email him at: artchartrand@mac.com

 

 

 

 

 

 

NHSCA Officers Elected

Lorna Mello, Senior Vice President of Sales & Marketing for Old Republic Home Protection Elected President of National Home Service Contract Association. Richard Adams elected VP and John Walsh, Secretary Treasurer.

June, 2018 – Lorna Mello, a highly experienced veteran and leader in home service contract sales and marketing was elected President of the National Home Service Contract Association (NHSCA) at its national meeting June 21 in Michigan.

Mello is Senior Vice President of Sales and Marketing with Old Republic Home Protection Company, based in San Ramon, California. She succeeds Mike Bartosch of 2-10 Home Buyers Warranty of Denver who completed a two year term.

“Lorna has been a national leader within the NHSCA for many years and served in numerous lead roles. It is hard to think of anyone more capable and knowledgeable,” commented Art Chartrand, Executive Director and Counsel to the Kansas City-based trade group.

“The home service contract business faces unprecedented demand and growth in the next few years. Supported by the internet, consumers now have unlimited access to compare products, coverage, and price, at their convenience.  As a result, it is imperative that the NHSCA help provide protections for our industry’s consumers, ensuring they are served by reputable providers” said Mello. “Working through the NHSCA and closely with state regulators, we will meet that challenge. Consumers need to feel confident that when they purchase a home service contract the company can be trusted to deliver on their commitment.  Always be sure the home service contract provider is a registered member of the NHSCA.  Be sure to look for the NHSCA logo on their brochure, or visit www.homeservicecontract.org for a list of member companies.” Mello advises.

Mello echoed the words of Bartosch noting that today, people fall into three categories when it comes to protecting the condition of their home.  1) those that want to but no longer can; 2.) those that can but don’t want to or have time to; and 3.) those that simply have no idea how.

Richard Adams, CEO of Utah based National Home Guaranteed was elected Vice President and John Walsh, counsel for HMS Cross Country was elected the group’s secretary/treasurer. “These are not only great business people, but great family people. They understand consumers and work hard to meet consumer expectations in this ever important and growing  industry, ” said Chartrand.

NHSCA members are the nation’s leading providers of consumer contracts to service, repair, or replace household systems and appliances that fail due to normal wear and use. The NHSCA works to improve the public’s understanding of the value and benefits of home warranties (service contracts), and encourages sound and ethical business practices and standards. In 2016, over four million service contracts were sold by NHSCA members, with well over one billion dollars paid at wholesale cost representing hundreds of millions more in consumer benefits and savings.

About the NHSCA

The National Home Service Contract Association (NHSCA) is a non-profit 501(c)(6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry and consumer information, visit http://www.homeservicecontract.org.

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Sales of Home Warranties Soar as Industry Covers Billions of Dollars in Appliances & Systems

The National Home Service Contract Association also reports an increase in consumer knowledge, value & popularity of home service contracts

Lenexa, Kan. –  Sept., 2016  The National Home Service Contract Association (NHSCA), a non-profit 501(c) (6) industry trade organization comprised of member companies representing home service contract providers and consumer interests throughout the United States, announces today that its members sold more than 4 million home service contracts (often referred to as home warranties) in 2015, an 8-percent growth from 2014.

“The NHSCA is an advocate for the home service contract industry and works diligently to further educate consumers about the value that home service contracts deliver,” said Mike Bartosch, president of the NHSCA. “The wholesale value of these contracts easily exceeds $1 billion in savings to consumers annually.”

The home service contract industry provides service, repair or replacement of major household systems and appliances that fail due to normal wear and use. Contracts generally cover items such as dishwashers, ovens, cooktops, garbage disposals, microwave ovens and water heaters; electrical, plumbing and heating systems; as well as ventilation and air conditioning systems (HVAC).

“If a system or appliance stops working, contact your home service contract provider. If a home system or appliance is damaged by a falling tree, catches fire or is subject to vandalism, then contact your insurance agent,” said Bartosch. “Home service contracts and homeowners’ insurance policies are mutually exclusive products in all 50 states. NHSCA members are not insurers and do not sell an insurance product. Further, insurance products don’t cover service, repairs or replacement to home systems and appliances required as a result of normal wear and use.”

The majority of home service contracts are offered through real estate professionals to the sellers and buyers of homes during the resale process. However, direct sales to consumers now account for approximately one-third of all home service contract sales. As with the sale of any warranty contract, buyers should read and understand the coverage afforded, as well as the limitations to coverage. Buyers should not rely solely on others to explain the coverage, as coverage may be inaccurately represented, which can cause frustration later.

While national figures continue to grow, home service contract market penetration differs from state to state. Various sources cite that in California, where the industry began in 1971, more than 90 percent of all home sales include a home service contract.

“Clearly these most recent figures show that consumers trust our members to take care of appliances and systems in their homes,” said Arthur J. Chartrand, chief executive and counsel of the NHSCA. “The members of the NHSCA represent a collective commitment to education, service quality and coverage. These sales figures posted by our member companies prove that our educational efforts are working and consumers are listening. As a result, the industry is positioned for an even stronger finish in 2016.”

Formed in 2004, the NHSCA exists to conduct research and promote education, publications and other methods that improve consumers’ understanding of home service contracts. Its mission is also to distinguish the home service contract industry from insurance, retail warranty and extended warranty and the automobile dealer service business. It also informs members of changes in laws and practices as well as pending legislation that affects the home service contract market nationwide as well as sponsors meetings and educational programs.

In addition to the protecting consumers on the wear and use of a home’s core appliances and systems, many home service contract providers also offer optional items such as swimming pool or spa equipment and other free-standing appliances such as kitchen refrigerators or washers and dryers for an additional fee. Contract terms may be annual and renewable, but many are now offered on monthly terms.

“All parties in a real estate transaction benefit from a home service contract,” said Bartosch. “For real estate agents, the benefits of home service contracts include risk management after the close of the sale, the ability to focus on repeat or referral business, hassle-free home repairs for clients and increased customer satisfaction as both buyers and sellers view home service contracts as a benefit and value the protection they offer.”

Although the term “home warranty” has been used historically throughout the industry, the more correct term is “home service contract.” Home warranty is a descriptive term coined because the home service contract industry evolved by providing contracts purchased by home sellers for home buyers as a form of “warranty” to protect the new buyer should a mechanical problem develop during the first year of ownership.

“Working to improve the overall consumer interface and experience with our providers and local contractors has been a top priority of the NHSCA,” said Chartrand. “Home warranty is a generic term and should not be confused with a new home’s ‘builder warranty’ or ‘extended warranties’ for new consumer goods.”

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. Members of the NHSCA are reputable, licensed home service contract providers in good standing, domiciled in various states across the nation. All members agree to adhere to a code of ethics, which promotes sound and ethical business practices. A current list of member firms are listed on the NHSCA website. For more information, please visit www.homeservicecontract.org or follow the NHSCA on Twitter @coveryourhome.

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The Home Warranty Industry: Bringing Innovation to the Way Homeowners Manage the Care of Their Homes

From Homewarrantyreviews.com – with permission  (2016).  This is a guest post by Arthur J. Chartrand, Counsel, and Administrator for the National Home Service Contract Association (NHSCA) – from Homewarrantyreviews.com

Read original article in full at  homewarrantyreviews.com.

Homewarrantyreviews.com (2016)   As homeowners, you have to live under a rock these days not to have certain lifetime or lifestyle plans in place.  In today’s world, there are many versions of service and warranty plans for life, health, your personal goods and your home. Without them, most would say you are way behind and perhaps even in danger, both financially and physically.

How Can a Home Warranty (Service) Contract Help You?

If you are a homeowner and have experienced the syndrome of costly repairs to any of your home appliances, you would be wise to consider the benefits versus costs of a home warranty contract. Due to the many economic challenges faced by families, many are remaining in their homes for a longer period of time.  This results in aging appliances and the potential for costly repairs. A home warranty (service contract) with a quality member of the National Home Service Contract Association is the solution for homeowners. Before we delve further into the benefits of a home warranty contract, consider how you, the homeowner, currently utilize other products to protect yourself, your lifestyle and your family.

Cases in Point for Homeowners:
Personal Health Plan: This would include exercise and proper diet. Always a complex plan that is hard to apply, yet unwise to ignore.

Health Insurance Plan: Without question, a pressing need for everyone. Health insurance is the main way we handle and budget the care or protection against catastrophe and is increasingly difficult to afford.

Life Insurance Plan:  Often hard to appreciate, hard to buy, and hard to afford. And this is the real fun part, you have to die and others get the benefits.

Long Term Care Plan:
Few plan for it effectively and it is very expensive.

Homeowners Insurance and Automobile Insurance Plan:
These plans are usually either required by lenders or law. With that being said, no one enjoys using them.  While critical, you may never actually need or use them in your lifetime.

Maybe you have a lawn care plan, automobile maintenance plan, pest control program or a home cleaning service? These are nice luxuries for those who can afford it. But what plan is in place for the biggest investment you own that will provide assurance and peace of mind? And, is something you can enjoy now and is affordable?

As a child, I spent countless hours with my Dad learning how to put a fan blower motor on a furnace. I learned what a “heat and limit switch” looked like, what it did and even how to replace one. Dad and I even put a water valve in our old dishwasher once.  Here is the reality. I never taught my son to do these things. My daughter was no more interested than my sisters were in such mundane household mechanics. In today’s world, furnaces and most other major household systems are just too complex to service or repair for even the advanced homeowner.  If a dishwasher breaks, economics often say replacing is a better option.  And let’s be clear, if you need a new gas water heater, don’t even think about letting your son in law give it a try. With all the technology and environmental requirements associated with these appliances, it is far too dangerous for anyone but a professional.

Today, families work long hours and spouses often travel frequently and are not around to work on air conditioner compressors that go bad, or septic tanks that back up into the master bedroom. The reality is most individuals wait until something breaks to call for assistance with many household systems and appliances from glass range tops to water softeners. Back in the day, even when my wonder Dad gave up, we had a family plumber. We also had a family electrician. When a swift kick did not work on the refrigerator or TV (believe it or not these were actual and often effective remedies that often worked in the pre-1980 world), Dad just called my uncle or the guy next door. If old Uncle Hubert does volunteer, remind him that duct tape and bailing wire aren’t very effective these days on your computer chip controlled thermostat.

Today, very few individuals have a trusted family plumber or electrician. Dealing with a broken valve, a cracked heat exchanger, a blown compressor, a leaking gas water heater or a jammed up shower valve is pretty much beyond the skill of today’s homeowner. Homeowners are forced to ask neighbors, post a plea on Facebook or pay some Internet site to suggest a local contractor. None come with anything close to a guaranty. And even if you find a reputable repair person, the cost can quickly escalate beyond your expectations.

The Homeowners’ Solution: A Home Warranty (Service) Contract
A home warranty or service contract manages your home service needs, repairs and replacement of your major household appliances and systems.  By investing about $550 a year in a home warranty, you have an 800 number, answered 24/7. A local service and repair professional will be dispatched to address your needs.  You no longer need a family plumber or a brother in law masquerading as an uncertified electrician. You can avoid a paid referral service to some lady who recommends cake makers and photographers along with plumbers she does not guaranty. Most homes average nearly two service calls a year. A home service contract handles not only what you don’t have time for, but nearly always, what you are unqualified to handle. And don’t forget, members of the NHSCA only utilize quality minded, screened local contractors in your area and stand behind their work.

Comprehensive home warranties cover a wide array of household systems and appliances and are becoming standard on any home sale transaction. However, many providers now offer directly to consumer contracts on your home today. Better yet, providers are increasingly offering you the ability to pick the appliances and systems most important to you as you build and price your own contract. It is just one more way the home warranty industry is bringing innovation to you.

A home warranty contract with a quality member of the National Home Service Contract Association is changing the way Americans live and relax. It is a necessary lifestyle program that you will use, and will enjoy in your lifetime.

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry and consumer information, including short helpful videos, visit  http://www.homeservicecontract.org or call 913-871-5600.

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NHSCA Interprets Washington State Tax Advisory

Appears official that longstanding law of no sales tax upon initial sale of home service contracts is affirmed.

The Washington State Department of Revenue published an Excise Tax Advisory (ETA) on January 12, 2016, ETA 3198.2016 regarding the sales taxation of home service contracts.

This ETA has been in discussion for years with the home service contract industry. The Washington Department of Revenue (DOR) has desired to alter the tax law after decades of audit clearance letters by the DOR approving of no sales tax upfront on the sale of home service contracts. Sales tax has always been collected when local Washington contractors later perform work. Only a handful of states tax the sale of home service contracts at the time of contract sale, and only pursuant to clear and specific statutory authority.

The ETA appears to rely in great part on a wholly unrelated statutory amendment in 2005 that taxed the sale of new product “extended warranties” sold at retail under RCW 82.04.050. Home service contracts do not cover new product, retail sales in any way shape or form. The reliance on the taxation of new products sold at retail, makes the entire basis for the ETA suspect.

Also casting a cloud, is that the DOR has continually assessed a B&O tax on all home service contract sellers at the rate of 1.5%. If home service contract sales were indeed retail sales, subject to RCW 82.04.050, the tax rate should have been the applicable 0.471%. If upheld, may years of refunds would need to be calculated.

Due to these issues, the DOR and the NHSCA cooperated to sponsor HB 1997 in March, 2013 to change the taxation of home service contracts to be more like that of retail goods. The legislature rejected that approach after a full hearing on the issues. This ETA appears to be an overt attempt to circumvent the Legislature.

However, this advisory strains to explain that typical home service contracts that only cover real estate and fixtures (broadly defined as virtually all appliances and household systems) are not sales taxable. So one fair reading is this ETA perhaps continues the decades old interpretation by the DOR and legislature that home service contracts are not taxed at time of sale, but only on work later performed later by a local contractor.

Due to the ETA not being reviewed with industry prior to publication, it contains some odd factual errors including a statement that a warranty can only cover personal property and erroneous legislative definitional references to “warranty” that any real impact of the non binding advisory is difficult to assess. An included discussion of “mixed service contracts” has few definitions and suggests a deminmis or “no tax” tax rule on covered tangible personal property, so it may also suggest no change in policy.

One can only fairly conclude as the Washington Legislature has, that home service contracts are not taxable at time of sale, just as the DOR has ruled for decades. Only the legislature can change the law. The NHSCA remains ready and willing to accept a future change set by the Washington legislature.

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry and consumer information, including short helpful videos, visit  http://www.homeservicecontract.org or call 913871-5600.

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Understanding Home Service Contract Terminology

National Home Service Contract Association defines terms for homeowners, regulators and the media to keep things straight.

(Lenexa, Ks) The purchase of a home may be the largest investment individuals and families will make in their lifetime.  A number of products, such as home service contracts, insurance, builder’s and other warranties exist to help homeowners protect that investment. The key to their effectiveness, is gaining a clear understanding of various industry terms.

The National Home Service Contract Association (NHSCA), a non-profit trade association, is dedicated to educating consumers, regulators and the media so that they clearly understand the the home service contract industry. Clearly defining each is the best place to start.

Home service contract/warranty

  • A home service contract provides service, repair or replacement due to normal wear and tear on major, built-in household appliances and systems. Most cover items such as dishwashers, ovens, wiring and plumbing systems and heating, ventilation and air conditioning systems (HVAC).
  • Many contract providers also offer a menu of optional items such as pool pumps, spas and free standing appliances such as refrigerators and clothing washers and dryers for an additional fee. Rural homeowners may also elect to add septic tanks or well pumps.
  • At an average cost of $550 a year, contracts historically renew annually.  In recent years, many providers have begun to also offer coverage on a month-to-month basis.
  • Contract providers maintain a toll-free service call line 24 hours a day, seven days a week for the convenience of their customers. Dispatch of a trusted local service provider usually occurs within 3-5 business days. Most provide expedited service for true emergencies such as breakdowns that affect life, health or safety.
  • Service calls average approximately $75 and protect the homeowner’s pocketbook as some repairs and replacements have the potential to run thousands of dollars with no contract in place.

Builder’s home warranty

  • As stated above, a home service contract is a renewable agreement for the service, repair or replacement of major, built-in household appliances and systems on existing homes due to normal wear and tear.
  • A builder’s home warranty is very different. These warranties, provided by the builder on a new home, are designed to offer coverage on the actual workmanship and materials used in the home’s construction.

Product and extended warranties

  • Retailers and manufacturers frequently offer warranties on the purchase of on the goods – such as electronics and automobiles – they make and sell directly to the public through retailers.
  • These new product warranties are generally active for a limited time to safeguard against existing defects in the product.
  • Extended warranties are just that – warranties that extend beyond the original warranty period. At purchase retailers may offer to extend a new product warranty for an additional price.
  • These new product or “retail” warranties are part of a separate industry, aside from the home service contracts/warranties.

Insurance

  • There is little similarity between home service contracts and insurance.
  • Insurance protects a homeowner against partial or total damage or loss to the structure itself or possessions in the home. Insurance protects against sudden and fortuitous events such as fire, wind, hail, theft, collision or other accidents.
  • Insurance does not cover breakdowns due to normal wear and tear, while service contracts do. The two products complement each other – they do not overlap.
  • Homeowner’s insurance also provides liability coverage against accidents in the home or on the property.
  • If a tree falls on the exterior air conditioning unit of a home, it’s covered by insurance. If an air conditioner stops blowing cold air, it is covered by a home service contract/warranty.
  • In most states, it is not legal for a home service contract to cover anything which could be covered by insurance unless a specific legal exemption exisits.

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry, media and consumer information, visit  http://www.homeservicecontract.org or call 913-871-5600.

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