Let’s talk numbers.
Literally just about every household — 92% or so — in America owns at least one car. This pervasive ownership has led to a market saturated with VSC sellers and administrators. The competition is fierce. And margins are getting tighter by the year.
But you know what else Americans buy? Homes. Appliances. Electronics. RVs.
These other warranty verticals represent more than $40 billion of potential revenue.
And the administrators who push to make their presence known for these additional coverages are priming themselves for exponential growth.
Let’s dig into why you should be eyeing multi-vertical expansion — and the extended warranty software you need to fulfill sales.
The Status "Don't"
We understand sticking to what you know. It’s called a “comfort zone” for a reason. Most VSC companies are just fine staying in one lane and one lane only because they:
Understand the auto dealer landscape
Have established service partners
Have a process already in place
Feel no need to fix what ain’t broke
But the Auto Market is Shifting
New cars are increasingly unaffordable
Inventory can be cyclical
OEM-backed programs are rising in popularity
More EVs = less common issues like powertrain malfunctions
Another Extended Warranty Opportunity: The Home the Car is Parked Under
Remember the 90% car ownership stat above? Oddly enough, only a fraction has warranties that cover their most valuable asset: their home.
That’s right: A mere 20% have a home warranty — meaning 80% of households are waiting for someone to market to them.
Even more compelling? The extended home warranty Compound Annual Growth Rate (CAGR) is projected to outpace the auto space probably because…
Homeowners spend about $14,000 a year on improvements, maintenance and emergency repairs
The median owner-occupied home is 40 years old
HVAC claims make up more than 50% of home warranty service requests
- 60% of homes were built before 1980
Aging homes stand to have older appliances and more problems. And that’s where you’ll find opportunity.
Why Are There So Few Extended Home Warranty Customers?
Two reasons stick out:
Scattered servicers and providers — especially in rural or remote areas
Less than 50% of home warranty customers are satisfied with the outcome of their most recent claim
Forming that network, not to mention winning the battle of shifting perceptions, is enough to ward off newcomers to the industry.
How to Capitalize?
Administrators who can build a network of reputable contractors, especially in sparsely populated areas, have better odds of succeeding than most.
Another Extended Warranty Opportunity: The RV Parked Next to The House the Car Is Parked Under
RVs are essentially homes on wheels. Not only do they have engines and transmissions that need repairing — they also have plumbing, appliances, HVAC and all the rest.
Talk about a potentially lucrative two-for-one policy you should sell!
And not only do more Americans own an RV than ever, those RVs are notoriously expensive to maintain:
30% suffer a major failure by year 2
80% experience a major failure by year 5
Nearly 100% need serious attention by year 8
And the annual maintenance and repair costs? Well, labor itself can cost $200 an hour, meaning this type of policy can pay for itself — fast.
How to Capitalize?
If you sell VSCs, odds are you already have a network of mechanics you can trust — and that network might already include technicians who can service RVs.
Selling Multi-Vertical Extended Warranties Has Benefits…
More stable revenue from multiple sources
Lower acquisition costs due to multiple offerings
Higher growth ceiling by tapping into related markets
But It Also Comes With Challenges...
- Developing a go-to-market marketing plan
- Finding and vetting new vendors or suppliers
- And — most importantly — accessing administrative technology that manages contracts, processes claims and handles the financials for additional extended warranties.
Most Extended Warranty Software Only Handles Autos
And that technology is often legacy, meaning it knows nothing other than 17-digit VINs.
That means it can’t handle serial numbers of an appliance. It can’t decode the model numbers of an HVAC. And property addresses as the coverage item? Not possible.
Now, you could use a separate admin system for each type of policy… but you’d probably want to tear your hair out soon after. The time you’d waste jumping back and forth from one system to another would mean you’re paying a hefty “lack-of-integration” tax.
Inline Admin Isn’t Like Most Extended Warranty Software
From built-in servicer network management to automatic payouts, we designed our system to be multi-capable for multiple verticals.
Get in a different lane. Break out of your comfort zone and try it for free with no obligation today.
