Need To Know
Third-Party Solar Warranties & Service Contracts
7 Questions Installers Must Ask
In which states is the provider licensed to issue service contracts or home protection contracts?
Plans that cover home solar system repairs, like extended warranties, typically qualify as “service contracts” or “home protection contracts”, both of which are subject to strict regulations in some states and overseen by local regulatory authorities, such as those responsible for insurance or consumer protection. In most jurisdictions, providers must be approved / registered / licensed. In our experience, not all providers comply with these registration/licensing requirements, which often protect homeowners by ensuring that warranty providers are financially stable and/or have appropriate cash reserves to pay claims throughout the warranty term.
Omnidian: (View Our State Licenses)
Omnidian sells service contracts in 31 states: Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Idaho, Illinois, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas, Utah, Virginia, Washington, and West Virginia.
Most (but not all) of these jurisdictions require a provider to have a license, permit, or registration to sell service contracts, and Omnidian has complied with the licensing / permitting / registration requirement (as applicable) in each of them.
In which states is the provider licensed as an insurance company?
Service contracts and warranties are not insurance. Insurance covers unexpected and unintended accidents that lead to damage (such as a hailstorm) while service contracts and warranties cover events that are somewhat expected (such as equipment aging and breakdown). Only a licensed insurance company can issue an insurance contract or policy. If a service contract or warranty purports to provide insurance coverage, the provider needs to be a licensed insurance company. An insurance brokerage license does not authorize a provider to issue insurance policies in its own name, and a brokerage license does not authorize a business to issue service contracts or warranties in states where a license is required for service contract providers.
None: Omnidian does not sell insurance.
Who is the company signing the legal contract? Are they financially stable?
Omnidian, Inc. issues service contracts in 30 states and its wholly owned subsidiary Omnidian Home Protection Company of California, Inc. issues contracts in California.
Omnidian, Inc. currently manages more than 170,000 solar systems nationwide for Fortune 1000 companies, businesses, and homeowners. Omnidian, Inc. is owned by a group of stable long-term investors including Liberty Mutual Insurance, Microsoft, Activate Capital, IA Capital, and some of the largest utilities in the world (Duke Energy, Avista, Centrica, Evergy, and National Grid Partners.)
How can I trust that the provider will honor its long-term contractual obligations?
If the warranty provider is backed by a third-party insurer, make sure to obtain the name and contact details of the third-party insurer, then make a call to confirm two things:
1) Does the third-party insurer back the full term and scope of the provider’s warranty? There is a chance that the insurance policy does not cover all the provider’s obligations to homeowners, in which case there could be a gap in coverage. For example, if the warranty provider did not receive regulatory approval for its service contract, it is possible that the provider’s insurance policy does not back all of the terms and conditions of the warranty and/or does not cover the full warranty period.
2) Will the third-party insurer accept claims from homeowners, and pay such claims, if the warranty provider disappears? In general, the third-party insurer’s role is to provide insurance coverage to the warranty provider, not the homeowner. Depending on the policy’s terms and conditions, it might not provide any direct benefit to the homeowner if the warranty provider disappears.
Many states require service contract / warranty providers to submit proof of their financial stability to regulators before they can operate in the state. Financial stability is often proven by obtaining an approved insurance policy, by submitting proof of a high net worth (typically, $100 million), or by placing cash reserves in an escrow account and/or posting a security deposit with the regulator.
Omnidian complies with the financial stability requirements in each of the states it operates in, through cash reserves and (where applicable) security deposits. Even in states that do not impose financial restrictions on providers, Omnidian maintains cash reserves for the protection of its customers.
Is the provider accredited with the Better Business Bureau (BBB) and what is their rating?
How many full-time employees does the provider currently have?
If the information is not readily available, a provider’s website and their LinkedIn profile can help estimate their headcount.
Omnidian has over 140 full-time employees, including over 20 software engineers and data scientists who continually improve our industry-leading monitoring, issue detection, remote diagnosis, and false alert filtering technology. (data as of February 2022)
How many incidents/claims has the provider paid so far?
It’s recommended to contact the provider directly to determine their experience.
Omnidian (February 2022):
Omnidian has paid more than 9,000 repair or replacement invoices for the benefit of our clients, for a total amount of $4M in parts and labor.