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Home Warranty Lawsuit (Extended Warranty Contracts)

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Lawsuits have been filed against various home warranty companies alleging the companies practice bad faith insurance. Specifically, customers allege in these home warranty lawsuits that home warranty providers—that is, third party administrators (TPA) that offer extended warranties—illegally deny claims, a situation similar to having an insurance claim denied.

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Home Warranty & Extended Warranty Companies

americanhomewarrantyclaimform Home warranty companies offer extended warranty service contracts to cover the repair and replacement necessary to keep appliances and other mechanical systems in a home in working order. Often, a retailer such as Best Buy, Wal-Mart, Sears or Home Depot, will offer customers an extended warranty that would provide insurance coverage on their purchase beyond the typical one-year warranty coverage that the manufacturer (e.g., Amana, Maytag, Whirlpool, Viking, Miele, Kenmore) would provide. The extended warranty is not managed by the retailer—it's simply offered by the retailer at the time of purchase. The companies that provide extended warranty contracts are called third party administrators (TPA), some of which are listed below.

Systems and appliances that may be covered by a home warranty include heating systems, central air conditioners, garbage disposals, ovens, dishwashers and refrigerators. Optional coverage can often be purchased on pools, spas and other devices.

Home warranties are meant to cover damage caused by normal wear and tear, not damage that involves pre-existing conditions, owner's negligence or extraordinary use. Furthermore, home warranties are not meant to overlap with a manufacturer's warranty or homeowner's insurance—that's why they are often referred to as extended warranties—they "extend" beyond the warranty coverage provided initially by the manufacturer.

Home warranty insurance or extended warranty contracts are provided by companies such as American Home Shield, First American Home Buyers, Old Republic Home Protection, Cross Country Home Services, Fidelity National Home Warranty and 2-10 Home Buyers Warranty.

Home Warranty Bad Faith Insurance



Home warranty lawsuits have been filed against various home warranty companies alleging they are guilty of practicing bad faith insurance. Bad faith insurance occurs when a policyholder's claim is improperly denied or delayed by an insurance company. Bad faith insurance can include practices by the insurance company such as not filing out paperwork in a timely manner, failing to conduct a proper investigation into a claim or using unreasonable grounds to deny a claim.

Home Warranty Lawsuits

In June 2011, a lawsuit was filed against American Home Shield by a couple who alleged the company improperly denied claims on the grounds of "lack of maintenance" or "preexisting condition," even though no inspection of the appliances in question was carried out at the time the policy was issued. The lawsuit, which seeks class-action status, further alleges that contractors were paid a bonus for denying claims.

americanhomewarrantytechnician In 2009, a lawsuit was filed against First American Home Buyers Protection, alleging the company employs third-party contractors—some without licenses—to service customers' claims. Because the company pays its contractors so poorly, according to the lawsuit, the only way the contractors can make money is to cause a denial on claims, refuse expensive claims or perform cheap fixes. The lawsuit further alleges that First American trains its employees to deny legitimate claims, refuse to authorize necessary repairs and replacements, and delay the claims process for so long that the customer gives up and pays out of pocket to cover repairs that should have been covered by their extended warranty.

In 2010, a lawsuit was filed against Fidelity National Home Warranty Company, alleging the company improperly rejected claims made by customers. Furthermore, the lawsuit alleges that the company denies legitimate claims and trains its service providers to do so while refusing to authorize replacement of appliances.

Home Warranty Insurance Legal Help

If you or a loved one has suffered damages in this case, please click the link below and your complaint will be sent to a Home Warranty lawyer who may evaluate your claim at no cost or obligation.

Last updated on Apr-1-14


HOME WARRANTY INSURANCE LEGAL ARTICLES AND INTERVIEWS

Customer Says She Unknowingly Paid for Home Warranty Insurance
Customer Says She Unknowingly Paid for Home Warranty Insurance Lynn Haven, FL: A bank customer says she was unknowingly paying for home warranty insurance for almost four years, despite not having enrolled with a home warranty company [READ MORE]

Plaintiffs Seeking $22 Million in Home Warranty Insurance Lawsuit
Plaintiffs Seeking $22 Million in Home Warranty Insurance Lawsuit San Diego, CA: The thrust and intent behind home warranty insurance is to protect the parties involved from defects in workmanship and materials. New construction is usually accompanied by coverage warranting against defects from initial occupation until an agreed period of termination, at which time many homeowners will seek out home warranty companies vending extended warranty coverage, should hidden defects come to the fore later in a structure’s initial life cycle [READ MORE]

Consumers with Home Warranties Find Repairs Hard to Come By
Consumers with Home Warranties Find Repairs Hard to Come By San Diego, CA: For many people who purchase home warranty insurance, there is peace of mind in knowing that if something goes wrong with an appliance or a system in the home, their finances will not be drastically affected. That is why they buy an extended warranty in the first place. But complaints against home warranty companies show that as far as some consumers are concerned, the situation can be more complicated than that [READ MORE]



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