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When It Comes to Home Warranty Companies, Not All Are Created Equal

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Sparks, NVWhen consumers purchase home warranty insurance, the expectation is that the home warranty companies that offer the warranties are properly licensed and able to conduct business. Unfortunately, some consumers find out too late that their home warranty company is improperly conducting business in their state, sometimes leaving the home owners paying for repairs they thought were covered by their home warranty.

KUTV (9/12/13) reported during its “Get Gephardt” segment about a homeowner who purchased a home warranty from Sensible Home Warranty and then had his furnace die. The homeowner was told by the warranty company to find a repairman, pay the bill and then file for reimbursement. When the homeowner sent in the receipt for the $661 furnace repair, he did not hear back from Sensible Home Warranty. Gephardt, however, learned that the home warranty company was not allowed to conduct business in Utah because they did not have a proper license.

But Utah is not the only state in which Sensible Home Warranty was allegedly operating without a proper license. According to documents filed by the Oklahoma Insurance Commissioner, John Doak, Sensible Home Warranty LLC was operating without a license in that state, as well. The claim (case no. 13-0051-DIS) alleges Sensible Home Warranty did not file its 2012 Service Warranty Annual Financial Statement, which was due on or before May 1, 2012, and failed to file its 2012 Service Warranty License renewal before the due date. As such, the documents state, Sensible Home Warranty was “acting as a service warranty association in Oklahoma without licensure.”

The Commissioner found that Sensible Home Warranty’s failure to file its annual statement and failure to renew its license in Oklahoma, “are business practices that pose an imminent threat to the welfare of the residents of this state.” As such, Sensible was ordered to stop selling and renewing contracts in the State of Oklahoma.

In 2012, the State of Washington sent a “Cease and Desist” letter to Sensible Home Warranty, demanding that the company stop conducting insurance business in Washington because the company was not authorized to conduct insurance business in the state. The letter noted that Sensible Home Warranty had sold approximately 140 home warranty service contracts in the state since 2009.

And in Utah, where the KUTV report originated, the Insurance Department alleged Sensible Home Warranty was operating without a proper license and “failed to pay legitimate claims made on home warranty contracts sold in the State of Utah, or pay them in a timely manner,” (according to documents). The Insurance Department ordered Sensible Home Warranty to cease and desist all insurance or home warranty business in Utah. It also ordered the company to pay all claims related to its home warranty contracts in a timely manner or refund 100 percent of the amount paid by the contract holder if the contract holder should decide to cancel the contract.

Licensing requirements for insurance and home warranty companies vary by state. For its part, KUTV’s report did result in the homeowner receiving his reimbursement, albeit months after he first filed his receipts.

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READER COMMENTS

Posted by

on
My story is like the rest. I bought a two year warranty for 700.00 and NEVER used it and when my A.C. Unit stopped working properly I called to no response and a genetic email that they had to close their doors. I want to know if there is a class action lawsuit that I can get my name on so that I can try to get my money back. Anyone know of such a lawsuit that has been started?

Posted by

on
ok smart computer person out there.....do your thing....find out the email or phone number of the owners of this company and give them to everyone so we can all send them thousands of crank calls and emails.....we are stuck with our bills ( they just announced they "regretfully went out of business" but at least can get some satisfaction from annoying the guys who ripped us off.

Posted by

on
This is ridiculous. I cancelled my policy within the cancellation window in January 2014. Everytime I call I get the same thing, we will send an email to billing. Now I go to the website and they have "shuttered their operations". This is crazy. I want my money back!!!! I can't believe this happened.

Posted by

on
I have spent the last six months trying to get a claim reimbursement.

Their website now states they are no longer in business. If you call, once you choose from the menu you are disconnected.

It seems that none of us will be getting claim reimbursement nor policy reimbursement.

Posted by

on
Sensible Home Warranty is a total scam outfit. I bought a 3-year policy in September, 2012 for $900, and used it twice. The first time I ended up getting my hot water heater replaced, which was good, but found out later that the plumbing company had enormous difficulty getting reimbursed. They ending up calling Sensible Home Warranty multiple times a day for weeks on end until they finally managed to get paid, and of course vowed never to do business with Sensible again. The second time an electrician fixed a wiring problem, but again wasn't getting reimbursed. The electrician sent letters to me and other Sensible customers he'd done work for, threatening to put a Mechanics Lien on our properties. He didn't want to do that, but felt he had no choice; if he had waited any longer the legal deadline would have passed. After enormous efforts, including me making numerous calls to Sensible to demand they pay him, they finally ponied up.

At that point I cancelled my policy which had two years left on it, and asked for a pro-rata refund as specified in my contract. After several email exchanges, their salesman agreed that I was due the money. But of course they never sent it. I called and emailed repeatedly, and was told it was on its, or that it would take 10 business days, or that the service representative would contact the billing department, but nothing ever happened. When I asked to speak to a supervisor, the supervisor was always at lunch or on break and would call me back later but never did. I'd be given the billing department's phone number and always get it's voicemail and never a call back. I considered filing a small claims court lawsuit, but would have had to try to serve notice in New York (I'm in California) at considerable cost. And even after winning such a lawsuit I probably couldn't have attached any assets to get Sensible to pay the judgement.

So it looks like Sensible Home Warranty will get away with screwing another customer (me). I can only hope that they will quickly go bankrupt before they rip off too many more people, and perhaps one day the company officers will go to jail for fraud. In the meantime, I'll add my voice to the many other warnings, so that potential buyers will know the mess they will be in for and potential contractors will know to avoid Sensible Home Warranty like the plague.

Posted by

on
I am in Arizona and it's now been a year without payment of $200 on my microwave. If I call I only get to hear they will send an email to billing. You can never speak directly to billing office and the manager are always at lunch or a meeting at all hours of day so don't bother. For awhile I was communicating with billing via email finally and they said my check would arrive October 2013 when that came and went they no longer would respond again. The contractor that came out has not been paid either and has told me he is placing a lien on my house for payment.

Posted by

on
Sensible Home Warranty is not SENSIBLE at all. THEY sent a representative out to fix my heat in Nov. 2013. After it was fixed, and the company was calling to collect, they told the company to contact me for collection of payment. I almost paid them but realized that I didn't call them, the SHW did so therefore they should pay them. I cancelled my policy after that and here it is Feb 2014 and I haven't gotten a refund yet. Called several times, emailed this "so called" billing department and nothing. Filed with BBB twice and they never responded! I'm hoping this lawyer contacts me because I'm highly upset about this outcome and this company! Want the world to know how bad they really are!

Posted by

on
Sensible Home Warranty totally screwed me the same way and trying to deal with the Better Business Bureau they just lied to them for months saying "the checks in the mail".

Posted by

on
Some one needs to shut this company down. I live in the Tampa Florida area. Same thing happened to me. It was on my garage door. I sent over 50 emails and made over 100 phone calls. I finally received my reimbursement check 10 months later. Company is a huge scam!!!!!!

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