How to Safeguard From Prospects with Home Warranties?

A Contractor University Member recently utilized the Ask-The-Expert Q&A feature within the member dashboard by submitting the following question and received the response below.

Contractor Question:

“What should we do to protect ourselves from customers who try to use home warranties after the fact?”

Contractor University Expert Response:

“The real issue isn’t just what happens after the fact, it’s putting the right safeguards in place before you ever run the call. Here are some best practices to protect your business and avoid unnecessary losses:

1. Require a Credit Card for New Clients

For every new client, collect a credit card and place an authorization (not a charge) before dispatching a technician. This ensures you have a secure method of payment regardless of what happens during the call.

2. Use Flat Rate Pricing with Signed Approvals

When the technician arrives, they should present flat-rate pricing upfront and require the customer’s signature before beginning any repair. The approval form should include options such as:

“I agree to the quoted price.”

“I decline membership recommendations.”

“I do not want to proceed with this repair.”

If the customer refuses to sign, the technician should walk away and charge a diagnostic fee only. This prevents disputes later, especially if the customer was not upfront about having a warranty.

3. Bill Immediately After the Repair

Once the repair is complete, bill the authorized card before leaving. This closes the loop and reduces the chance of collection issues or warranty disputes.

4. Verify on a Recorded Line

During call intake, ask: “Do you have any warranties we should be aware of?” If the customer answers no, that recording becomes part of your protection. Recording is legal as long as you disclose it, and many service businesses do this as part of standard operating procedures (SOPs).”

Contractor University members can click here to log in to their member dashboard and submit a question through the Ask the Expert portal.

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