Why Home Inspection Warranties Might Be Hurting Your Real Estate Practice

At one point, warranties were a cornerstone of our business. We believed they added value, reinforced our commitment to our clients, and differentiated us in the marketplace. But after conducting over 15,000 inspections, we learned—sometimes painfully—that including warranties was a huge mistake. Here's why we've stopped offering them and why you might want to think twice before aligning your real estate practice with inspection warranties.

They Don't Deliver What They Promise

The average inspection warranty costs $30–$40. For that price, they claim to cover roofs, sewer lines, mold, structural issues, and more. But consider this: reputable home warranty plans cost $500–$1,000 per year, and insurance policies that cover catastrophic events like fire or water damage cost thousands. So how can all of that be truly covered for just a few bucks? The truth is, it can't. And it isn’t.

These warranties offer a false sense of security. Most claims get denied due to fine print, exclusions, or loopholes. For example, a plumbing leak inside a wall is typically excluded, despite being one of the most common post-inspection issues. There are caps, deductibles, and countless ways to avoid payout. In 2021, we paid over $100,000 to warranty providers. They paid out around $5,000—to our clients. That’s a 3% return, and not without battles.

They Damage Your Reputation

When these warranties fail to deliver, the blame doesn’t fall on the warranty company—it falls on you, the real estate agent, and us, the inspection company. Clients sit on hold for 30–50 minutes per call. Claims can take 6–10 months. The customer service is abysmal. Even when a payout happens, it’s usually partial and leaves the homeowner frustrated.

Suddenly, you’re getting calls post-closing from a client with a plumbing issue or roof leak, wondering why their warranty isn’t covering it. Your reputation, trust, and future referrals are now on the line for something you can’t control.

Inspectors Aren’t Insurance Companies

Home inspections are a snapshot of a property’s condition at a specific point in time. A great inspector with modern tools—thermal cameras, moisture meters, drones, and advanced training—will provide a thorough assessment. But they cannot predict the future. Nor should they, or their agents, be expected to make good on events that happen post-closing.

Warranties were sold to us as protection against missing something. But if you have trained, experienced inspectors, that protection is unnecessary. Worse, if something is missed and you tell the warranty company, they often say, “Sorry, not covered if it was missed.” It’s a lose-lose scenario.

It Hurts the Client Too

Your clients are left feeling misled. Even when they receive a partial check, they’re upset about what wasn’t covered. The frustration grows and it reflects poorly on everyone involved. And most clients don’t understand that you, the inspector, and the agent aren’t liable for future homeownership problems. The expectation, created by the warranty, is now your problem to manage.

True Stories from the Field

Story #1: A post-closing leak led to water and mold damage. Our report had video and thermal images proving the issue was new. Six months of fighting later, the client got a $500 check—well below the repair cost. The mold claim was denied.

Story #2: A sewer line issue required major exploratory work. The warranty advertised “We’ll dig it up and fix it,” but only paid for the exact break. Not the digging. Not the diagnostics. Everyone wasted time for minimal payout.

Story #3: A second-floor shower drain leaked. Thermal images and video from the report proved it was new. The claim was denied because the leak was behind drywall. After intervention from our owner, they covered the leak repair—but not the drywall. The client, and everyone else, was frustrated.

Let’s Stay in Our Lane

As inspectors and agents, our job is to protect clients during the home-buying phase. We ensure they don’t unknowingly inherit problems. But once they own the home, normal maintenance and unexpected repairs become part of homeownership. That’s what homeowner’s insurance is for.

Warranties mislead clients into thinking someone else will deal with the problems. When that doesn’t happen, they turn to you. And the cycle of disappointment begins.

The Better Option

If you want an inspection partner who delivers thorough, clear, and professional evaluations—without overpromising—Inspections Over Coffee is the ideal choice. We go above and beyond state and national minimum standards. Our technology, training, and reporting are best-in-class, and our mission is simple: help your clients understand what they’re buying—nothing more, nothing less.

Skip the gimmicks. Skip the fine print. Skip the disappointment. Let’s focus on what actually helps your clients.