A home warranty is meant to protect us from repair and replacement costs of home appliances that fail due to normal wear and tear. Unfortunately, a lot of policyholders feel let down by the results after filing a claim with their warranty company. Some people are unaware that they have the power to dispute the outcome of a claim, however many policyholders have managed to successfully dispute claims and won. The procedure involved in disputing a claim can be extensive but worth the time investment. This is where you will have to learn how to fight a home warranty company to get your fair due. But before that, let's have a look at reasons for the denial of a home warranty claim.
A home warranty is a service contract that covers systems and items in your home that are usually not covered by homeowner’s insurance. Furnaces and outside air conditioning units, plumbing and electrical systems are items commonly covered under a home warranty protection plan. The homeowner requests a claim with the warranty company when a covered item requires repair. Some home warranty providers repay the homeowner for the cost of the repair while others send a contractor directly to the home for repairs.
You should look at these factors carefully for any items that you estimated to be covered by the home warranty contract you are thinking of buying. Make sure you read the contract several times and understand the reason for denial. In some cases, even courts cannot help you if the claim was denied for a reason clearly stated in the contract.
So what are some of the common reasons for denial of claims on home warranty?
Lack of Maintenance – You are supposed to clean and maintain your appliances. HVAC units must be serviced every year and you should keep maintenance records.
Code Violations – If any of your appliances violate safety and installation codes, they won’t be covered.
Unusual wear and tear – Due to reckless usage etc.
Improper installation – This is where having a home scrutiny done by a professional is so significant. Paying out a few hundred dollars for this kind of assessment could save you from losing thousands of dollars and years of annoyance. For instance, if the HVAC system was not installed properly, or if the defect existed before the new buyer took ownership, the claim could be denied. If the seller is reluctant to deal with issues that are found in a home inspection, think again before you close on that home.
Excluded appliances Clause – Not all appliances are covered. Your service contract lists all covered appliances. Make sure you are okay with the coverage.
Always be polite and be friendly with customer service professionals. They will go the extra mile if they like you. The first step should always be that you speak to customer service supervisors and their bosses who make the decision. Assuming those steps did not result in a favorable outcome, you can escalate as follows:
Step 1: Verify your home warranty documents. The definite steps you have to take with the home warranty company to appeal a petition for denial are listed in the documents.
Step 2: Make contact with your home warranty company. Keep a record of all dates and times you talk to a company representative. Obtain the names of every person you speak to. Inquire for the required paperwork to demand a denial of your warranty plan.
Step 3: Get the problem re-estimated by a third party. Speak to a local contractor or repairman and get a written estimate for the repair. Have a professional written record of what is the reason of the damage.
Step 4: Pursue the warranty company’s appeal process. Some companies want mediation actions to be started by and finished by you before the issue can be taken further. Provide any documentation demanded by the company.
Step 5: Approach Better Business Bureau (BBB) if the company is registered with them. Most companies are willing to resolve your issues and close BBB home warranty complaints to have a clean record.
Step 6: Call your State attorney general’s office. The attorney general’s office normally deals with home warranty fraud and service denials.
Step 7: File a complaint in small claims court if your claim is small enough. Small claims courts are confined on how much money you can file for a suit.
Step 8: Get hold of an attorney for larger claims. Verify with your local bar association to locate an attorney knowledgeable in real estate and denial of service matters. The permissible charge for an attorney differs by area, but usually you will be able to sue the warranty company for the lawyer charges you paid other than your claim.
This is completely different from pursuing insurance claims.