A trade service fee (TSF) is what a homeowner pays when making a claim on their home warranty. It’s like a deductible that is paid to the service provider. The TSF may also be referred to as the trade call fee depending on what provider you are using.
The Costs of a Home Warranty
A home warranty has certain costs associated with it. In exchange for the costs, the contract states that the warranty company will pay for unexpected repairs to covered systems or appliances. There are two costs that a homeowner should be aware of with a home warranty: the premium and the trade service fee.
The premium is a monthly or annual charge paid regardless of whether there is a claim or not. When a claim is made, the TSF is also paid to engage the services of the repair technician. Depending on the contract terms, there may be additional costs such as the amount over and above the contract caps for certain claims. Remember, a home warranty is not homeowners insurance.
How Much Are Trade Service Fees?
Most companies charge between $75 and $125 for a trade service fee. Though there are companies with TSFs that may be as low as $35. Some home warranty companies will actually offer different premium plans if you choose specific TSFs. For example, you may pay less premium if you choose a $100 TSF versus a $75 TSF.
How a Trade Service Fee Works
The TSF is usually paid directly to the home warranty company when you call to file your claim. These are the first dollars paid to get the service provider out to the call. When the service provider arrives, he will determine what repairs are needed and bill the home warranty company for them. If the repairs are above the contract caps, a homeowner may have to pay out-of-pocket for the remainder.
It’s important to keep in mind how multiple trade services fees may apply to the same issue. If two different service providers are needed to rectify a problem, there may be a second claim with a second trade service fee to be paid. For example, assume the over breaks and you file a claim for the repairs. You pay your first TSF and the technician comes out. In determining the problem, he realizes there is an issue with the electrical outlet that the oven is plugged into. An electrician is now called and you need to pay a second TSF.