I actually negotiated a deal where I often get paid more by the warranty company than I would have by the customer. They have this county broken up into four sections. I don't charge them a trip charge for my immediate city. But for some reason they have a penchant for sending me to parts of the other three areas, much of which is 20 minutes or less away. For example today I had a no cooling call from that warranty company that was a 15 minute drive at most. When I got there it was working fine. I had a pretty good suspicion what it was but couldn't confirm. A full priced customer would have paid X amount. But with the trip charge, the home warranty company owes me X + $20. Given all the trip charges I've been imposing, I'm not making much less than I would have otherwise. When you factor the cost of advertising that I don't have to spend on these customers, it isn't bad.
It's nice also in the sense that they provide me a source of service calls. I was a full time service man and didn't care for install. Running a one man shop now means way fewer service calls and a lot more installation work. Since I negotiatied in my contract that I would not replace furnaces (literally couldn't make money at their rates), they basically provide me with nothing but service calls.
And of course the original reason why a lot of new businesses deal with home warranty companies: new customers. I've made numerous new contacts. Two different realtors that I met through warranty work have already referred me out to their clients and coworkers. It's not hard to make them happy. I seem to get a lot of second opinion calls. When the customers have had to deal with the utter bufoons that the warranty company dispatched before me, they customers think me an HVAC god (little "g").
It's only been six months. I'm sort of waiting for the excrement to hit the fan. But it hasn't so far. I realize my situation is the exception. But I wanted you to know it's not all bad out there.
[Edited by Irascible on 08-01-2004 at 02:39 AM]