Service America home warranty plans provided good customer service on home repair and replacement work for over 40 years. The company—which thrived within localized markets—lost out to what has become a very competitive home warranty industry. We have taken a closer look at what happened to Service America and recommend other top home warranty companies for coverage.
Service America overview
For many years, the Service America name gave home warranty customers peace of mind. Service America Enterprise, Inc. was a contracting home service company offering service on home systems and appliances for a set fee. Service America, like other types of home warranty companies, didn’t provide insurance policies, but rather home service contracts. The company was also in the business of selling some home products and servicing commercial buildings.
Founded in the 1970s, Service America was headquartered in Fort Lauderdale, Florida, when it went out of business at the beginning of 2019. At one time, Service America was the largest provider of residential home warranty contracts in the state of Florida, serving over 50,000 customers.
However, in November of 2018, Service America attorneys informed the state of Florida per state law that the company would close. Service America only had offices in Clearwater, Florida, and Fort Lauderdale, Florida, at the time. Those offices shut down and all 161 employees lost their jobs in January 2019.
Why Service America went out of business
In 2006, Colliers International Group Inc purchased Service America. Colliers is an international real estate services company based in Canada that operates real estate firms and brokerage services in several local U.S. markets. Despite the influx of financial support and resources from this global corporation, Service America still experienced a steep decline from 2006 to 2018 when it finally shuttered its doors.
The reason for Service America’s decline was due in part to many of the same challenges other home warranty companies face today:
- Rising costs—Higher costs on parts and materials needed for the construction of appliances have caused the price of new appliances to rise. The rising cost of skilled labor makes the home warranty model less profitable.
- Inefficiency—Companies that don’t keep repair parts available are less efficient. When a company has to send out a repair technician more than once to complete a job, it costs the company and the customer money.
- Not keeping up to date with customer service—Getting customer service right is important. In today’s market, new technology has caused expectations of customers to change quickly. Companies not on top of innovation and technology can’t provide the 24/7 customer service that consumers want.
- Competition—Larger companies with lower overhead and more modern business models moved into the home warranty market, while unsatisfied customers moved along to other providers.
These types of challenges led to a poor outcome for Service America customers. The experience of Florida resident Burt Allen is a good example of what some customers faced in late 2018 and early 2019. Allen reported to his local NBC Affiliate station that he started having problems with his refrigerator.
The call on his Service America contract for customer service started out normally. The service technician came out and he paid a $50 service fee. He was told the refrigerator could be fixed, but he had to wait for a part—which the service technician promised to order.
After finding out the company was shutting down, he had no way to get the repair completed. He was out the money and his refrigerator was still broken.
“There is no way I would have access to reach anyone in authority about any of this. I couldn’t even reach mid-level managers,” Allan told NBC 6 at the time.
Customers report similar difficulties getting in touch with other home warranty companies that have gone out of business, such as Pride Home Warranty.
One drawback Service America experienced in particular was a failure to adapt its business model to modern times. Many competitive home warranty companies save costs today by having professional technicians operate as sub-contractors for their home warranty plans. Staff technicians—like some of those used by Service America—cost a company more money than independent contractors. The extra costs of having an employee (benefits, insurance, and retirement) keep a company from being able to afford competitive pricing for customers.
As the company began having problems, the experience of Burt Allen became common for customers. Customers reported customer service started to decline when it was purchased by Colliers International Group Inc in 2006 and employees said the work environment went downhill quickly. The service levels were particularly bad in the time period from 2016 until 2018 when the company closed down.
Among complaints submitted to the Better Business Bureau before the company closed are concerns about poor customer service, false charges for service contracts, and air conditioning problems and other home repairs going for a week or more without response. Even long-time customers seemed surprised by this turn of events as they reported the bad news.
- Cherise M. in August of 2018—“I have been a customer for over 18 years and in the last 2 years have experienced a steady decline in their customer service. It now takes at least an hour if not more to merely schedule a service call!”
- Ron M. in August 2018—“Very poor customer service. They will sell you a contract…but when you try to schedule service…it is a nightmare!”
- James P. in November of 2018—“Service America is one of the worst companies in existence! No customer service at all. Continuous hang-ups [and] lots and lots of no shows with no phone calls.”
The same company had been formerly rated highly by customers. An average of 183 BBB reviews for the company dating back to 2016 averaged into a high 4 out of 5 star rating. Service America was still getting some five-star reviews from customers well into the middle of 2018. Most of the good customer service was attributed to the technicians, rather than the process of working with the company.
- Willmour & Gayon in October 2016—“Service America in my area works great!!! I have all my appliances and plumbing serviced through them. All of the technicians that provide service at my home are knowledgeable and get the job done quickly.”
- Maxine H. in October 2016—“Technician very courteous and helpful. Gave good advice.”
- Bob R. in November 2016—“The technician was on time and resolved the problems quickly. He also offered advice on how to avoid future problems and better take care of our plumbing.”
Note: The Better Business Bureau does not recognize Service America as an accredited company at this time.
Looking for information on more home warranty companies? Check out some of our other expert reviews to get all the details you need. Remember, each of these companies gives a free quote.
- Choice Home Warranty review
- American Home Shield review
- Select Home Warranty review
- Amazon Home Warranty review
- First American Home Warranty review
- Liberty Home Guard review
Our top-rated alternatives to Service America Home Warranty
With Service America leaving the home warranty industry, other companies have stepped up to fill the gap. These companies have worked hard to overcome the same issues that lead to Service America’s inability to provide good service and a long-term successful business plan for customers. Before buying a home warranty, compare the following providers: