Residential Protection Plan. Training Document and Presentation Guide

Transcription

1 Residential Protection Plan Training Document and Presentation Guide

2 The Concept - Plan Overview The Challenge...The Solution - Industry Background The Opportunity - Provider and Consumer Benefits The Offering - Plan Features and Coverage Options The Path - Getting You and Your Customer Started The Stretch - Our Competitive Advantage The Facts - Competitive Information

3 AThe Concept - Home Warranty Plan home warranty plan is a service contract for a new or existing home, which provides comprehensive coverage of a home s major operating systems and appliances, in response to mechanical breakdown. The contract provides for the repair or replacement of covered home systems, such as plumbing, electrical, heating, and cooling systems, as well as major built-in appliances. The homeowner pays only a small service charge for each service call, while the plan provides for the parts and labor necessary to restore the product or unit to normal operating conditions..

4 The Challenge...The Solution - Then & Now The most valuable initiatives emerge as a result of a challenge requiring a call to action. In this case, a challenge within the real-estate industry, specifically evident in California in the 1970 s: that of determining liability and the handling of repair for component and system failure in homes sold. Homebuyers expecting what is termed inhabitability (the proper functioning of core systems upon purchase of a home) were entering into litigation with realtors in order to resolve system issues. The home warranty concept emerged out of a need to mediate these claims effectively.. The Home Protection Act and Home Warranty Association of California were soon to follow, and set the foundation for major Home Warranty providers nationwide. Although the real-estate channel is still the key-operating arena for the industry, major Home Warranty providers are now entering Assurant s traditional distribution channels such as mortgage, bank, consumer finance, and insurance. Regardless of it s source channel, a Home Warranty has become a highly effective means to protect all parties relevant to the real-estate transaction: seller, buyer, and realtor, avoid litigation arising from failure of components, and help expedite the remedy of after-sale problems that occur with home sale transactions.

5 The Opportunity - Reaping the Benefits...as the provider Protecting your customer from the inconvenience and high cost of unexpected repairs, provides you with: - Added revenue opportunity for channel partners - Increased product offerings - Enhanced loyalty from customers - Timely payments of loans and mortgages Adding a home protection plan to your product mix has the dual effect of providing revenue opportunity for you, while your customer enjoys the choice flexibility and the convenience of a single source for multiple financial needs. Moreover, considering you as a single source for a variety of needs automatically translates into enhanced customer loyalty. While minimizing the high cost of unexpected repairs for your customer, a Home Warranty Plan makes it easier for him to maintain the budget predictability that keeps mortgage or loan payments delivered to you on a timely basis. - Reaping the Benefits...as the consumer Planned protection for the handling of home system failures provides your customer with: Peace of Mind - no concern over unpredictable costly expenses Convenience - one toll free phone call does it all Accessibility - to qualified trade professionals Quality - certified/insured service providers Value - savings, one annual fee/small deductible Flexibility - customizable/transferable/renewable plans The purchase of a home protection plan allows your customer to keep his systems/appliances in consistent working order while his budget also remains consistent. And this means peace of mind. When faced with system/appliance malfunction, a simple toll free call renders availability of qualified professionals and service providers for the efficient restoration of the product. All this for a low annual fee and small per service call deductible. The customer has the opportunity to choose a plan that meets his needs, and the flexibility to renew it at regular intervals and/or transfer the contract with the sale of a home.

6 The Offering - Residential Protection Plan Features The Residential Protection Plan is a total home protection program providing mechanical breakdown coverage for a homes major systems and appliances regardless of make, model, or age. Universal Features All Residential Protection Plan Customers receive: - 24 hour, 7 day a week customer service - Toll free access - Personalized customer fulfillment - Quality control of service performance - Contract renewal option - Repair/replacement coverage - Transfer option Coverage Options and Inclusions - Two standard coverage options are available: Essential and Extended. Coverage inclusions for these will follow. - One customized coverage option is available, which allows for the unique tailoring of product configurations to meet client needs, and the option to add additional coverage to our standard Essential coverage.

7 Essential Coverage Plan* Plumbing System leaks and breaks in: water, drain, gas, waste, vent lines (except when caused by freezing or root damage) toilet tanks, wax rings, bowls, seals, and mechanisms shower, tub, and diverter valves riser and gale valves angle stops permanent ground water sump pumps built-in bathtub whirlpool motor and pump assemblies Heating System components and parts for system operation, including heat pumps one 150 BRU input unit or one air-handler with up to 25 kw resistance heater Water Heater One boiler up to 400,000 BTU input $1500 limit on hot water or steam systems Duct Work Ducts from heating or cooling unit to register or grill point of attachment (except asbestos ductwork) Trash Compactor Components and parts necessary for unit operation (doors and seals not covered) Electrical System Components and parts: switches, outlets, receptacles, electrical panels, interior wiring, built-in exhaust fans, etc... Air Conditioning Standard air-conditioning unit or one heat pump condensing unit up to 5 tons single phase, 240 volts One air handler and associated parts Components and parts for cooling operation of unit providing airflow through central ductwork plus evaporative cooler up to $3000 Garbage Disposal Electrical and mechanical components and parts necessary for unit operation Garage Door Opener Components and parts necessary for unit operation Range/Oven/Cook top Components and parts necessary for unit operation (doors and seals not covered) Built-in Microwave Oven Components and parts necessary for unit operation (doors and seals not covered)

8 Extended Coverage Plan* The Extended Plan provides coverage for all of the inclusions listed for the Essential Plan. The following additional coverage is provided by the Extended Plan as well. Refrigerator/Freezer Components and parts necessary for unit operation. Excludes doors, dispensers, and icemakers $100 over term of agreement Food Spoilage Benefit for loss of food resulting from a plan covered failure Clothes Washer Components and parts necessary for unit operation (doors, seals, fabric softeners, soap dispensers not covered) Clothes Dryer Components and parts necessary for unit operation (excludes doors and seals) Dishwasher Components and parts necessary for unit operation (doors, seals, and soap dispensers not covered) Contract Referral Service Access to network of licensed/pre-screened trades professionals Tradesmen Advise Hotline Do it yourself assistance for most home improvement projects Expert Review of Contractor Quotes Access to review and assessment of contractor quotes and job estimates *Exclusions and limitations to all items listed apply. For details, refer to service contract..

9 The Path - Getting you there Pricing Distribution Mortgage Broker/Loan Originator Consumer Finance-Refinance/ 2nd mortgage Escrow or Title Company Banks/Credit Unions Utility Property and Casualty Insurance Agency Developer/Builder Alternate Channels: Retail, Condo Assoc., Property Managers, Home Inspectors, e-commerce partners Sales Point of Sale Event Driven Direct Marketing Missed Point of Sale Renewals Promotions Enrollment Brochures Client Brochures Private Label Programs Telemarketing/Direct Mail/ Net rated or Commission Based Deductible or Trade Service Fee Flexible payment intervals (e.g.. - monthly) Pricing variations by state State specific sales tax inclusion/exclusion of net rate

10 - Getting your customer there Eligibility Choosing the right Plan option Start of Coverage Plan Duration Repair Handling Fees The Residential Protection Plan is available to new and existing single family owned residential homes under 4000 sq. ft. Coverage is not available to commercial properties, or residences used as business. Two levels of coverage inclusion have been pre-designed to meet the majority of customer needs: the Essential and Extended Service Plans. If neither of these meet the customer s specific needs, a completely customized option is available as well. Coverage begins on the effective date specified on the service contract. Monthly plans are subject to a 30-day enrollment period, therefore monthly plan customer claims submitted within 30 days of coverage effective date, will not be paid. Annual plan coverage beginning and expiration dates are specified on the service contract. Monthly plan coverage beginning date is specified on the service contract, and the renewal occurs on a monthly basis upon receipt of payment. Non-payment results in plan termination. Once a system/product failure occurs, the customer calls the toll free number indicated on his service contract. Upon isolating the issue a service provider is then dispatched to schedule an appointment. In an effort to expedite service however possible, special consideration is give when essential systems, and service calls outside of standard business hours, are involved. When the product is deemed irreparable, or not cost-effective to repair, replacement with a comparable item will be considered. If parts required for repair are not available, an allowance (based on equipment age and market value) may be provided to aid in the replacement of the product. There is no limit to the number of claims that can be submitted per year, however please refer to the service contract for exceptions. A $35 trade service fee or the actual cost of service, the lesser of the two, is required for each repair visit. Renewals The Residential Protection Plan is renewable upon approval of - Once approved, the customer will be notified of applicable rates and terms. Transfers Cancellation Upon the sale of a home, the service contract can be transferred to the buying party. A $15 administration fee is required for transfer processing. Cancellation simply requires mailing of a written request, along with the original service contract copy, to -. When cancellation takes place within the first 30 days of service, a full refund (less the value of any services provided) is extended to the customer. When cancellation takes place after the first 30 days of service, a prorated refund (based on remaining plan time less the value of any services provided and an administrative fee) is extended to the customer.

11 The Stretch - Our Competitive Advantage Provider Experience (?) Certified Quality Processes and Service Delivery Rated (?) Guaranteed obligation to every service contract written Consumer Competitive Pricing - Extremely low deductible of? and annual fee of? (add info). See competitive pricing info under The Facts section which follows. Flexible Customizable Plans - 3 comprehensive options (2 standard: Essential & Extended plans, and 1 customized), designed to suit individual needs Comprehensive Plans - many inclusions offering valuable home improvement assistance, such as contractor referral, advise hotline, estimate review service $100 Food Spoilage benefits Extensive basic coverage inclusions (Essential Plan) such as air conditioning Most major appliances covered under Extended Plan, no need to pay additional appliance charges Excellent Service - trained professionals, 24 hours a day, 7 days per week. Expedite dispatches. The Facts - Competitive Information Top 5 Home Warranty Provider Competitive Matrix* Provider Competitive Strength Pricing General Information American Home Shield Oldest/Well known HW provider in US Strong in Real Estate Channel Controls largest market share due to acquisitions $312/year for basic coverage: fort heat/plumbing/elec/ range/oven/cooktop/ built-in MWO/dishwasher/ disposal $412/year for Premier adds ac/fridge/w&d Pool/Spa option for additional $160 Owned by Service Master Self-insured/self-administered Integrated vertically and horizontally Cross Country Home Services (HMS) Shares exclusive marketing arrangement with HMS (leading provider of real estate products) Strong in Real Estate Channel $255-$389/year range $45-$100/deductible range Variations by state Administrator is CCHS Underwritten by Homesure of America in several states First American Home Buyers (First American Title Insurance) Title Insurance is focal area (opens POS Real Estate Channel) $250/year Basic $50 - AC $125- pool/spa $75-Washer/Dryer $25-refrigerator Primary Business is title insurance Acquired Chicago Home Warranty in 1999 Acquired Alliance Home Warranty in 1998 AON Home Warranty Vertical Integration Self-insured Self-administered $389/year for basic (Home Standard Plan) $50 deductible $239.88/year or $19.99/month for premier (Appliance Plan Plus) covers W/D, fridge, WH Range, Heating, and AC Plan underwritten by Virginia Surety and marketed by United Administrators Alliance Old Republic Home Protection Strong in Real Estate Channel $ /year range $35-65 deductible range Owned by Old Republic International which specializes in commercial underwriting * Providers numbered based on market share priority - from 1st to 5th largest provider nationwide

12 Top 5 Home Warranty Provider Product Feature and Market Comparison Target Market Promotion Distribution Product Total Home Warranty including major appliances, HVAC, heaters, ductwork, plumbing, electrical, garbage disposal, trash compactors, exhaust fans. Fixtures Cosmetic items Real Estate Brokers Real Estate POS Strategic Partners Collect 1st year premium at closing Mortgage/Banking Title Insurance and Escrow Company Utility Company Personal Selling in realty channel Direct Mail Telemarketing Internet Private Label Branding Exclusive Suppliership Home Buyer Home Sellers Resale Driven Diversified into financial channel of distribution American Home Shield * (Service Master and Homelink) Cross Country Home Services (HMS) First American Home Buyers (First American Title Insurance) AON Home Warranty * National Realty Cos * Century 21, ERA, Coldwell Old Republic Home Protection