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New Jersey Sues Home Warranty Insurance Provider

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Edison, NJWhile the insurance industry may tell you they suffer from a bum rap from consumers who constantly complain about claim denials, the existence of so many examples to the contrary suggesting a reputation for serial denials after happily collecting premiums is more than just a perception. Home warranty insurance is one sector where many examples of this can be found.

Case in point is a home warranty lawsuit filed by the New Jersey Division of Consumer Affairs against CHW Group Inc. (CHW, Choice Home Warranty), an enterprise issuing extended warranty products to consumers for home appliance repairs. According to the Asbury Park Press (7/30/14), CHW was happy to collect premiums for policies, but was not so forthcoming when a claim related to a failure of an important home system was made.

Air conditioners and refrigerators, for example. In a hot climate air conditioning is not only vital to an individual’s health, a home that is consistently hot can lead to the failure of appliances. As for a refrigerator or freezer, consumers are rightly skittish about filling an appliance with expensive food without the capacity to quickly fix or replace a failed unit in order to avoid spoilage, and any subsequent financial loss.

That’s why consumers turn to home warranty companies.

According to the Park Press report, CHW advertises “home warranties” that provide what is described as “comprehensive coverage” for important appliances and home systems, with a view to repair or replace if something goes wrong. According to the state’s case, CHW advertises “peace of mind” for consumers.

However, according to the state’s extended warranty lawsuit, CHW allegedly denied legitimate claims by employing the use of deceptive practices.

The home warranty lawsuit notes that when consumers submitted a claim for a repair or for a loss, CHW allegedly denied claims due to the defendant’s assertion that consumers had not properly and adequately cared for their appliances. In other cases, consumers were offered cash buyouts that were well below the value that consumers invested in replacing a defective appliance covered by the extended warranty.

The bad faith insurance report notes that The Better Business Bureau (BBB) passed 902 complaints - some of which had already been resolved, according to the defendant - to the division. As of this writing, the BBB listing for Choice Home Warranty of Edison, New Jersey, showed, in actual fact, 965 complaints within the last three years, with 399 complaints in the last 12 months. CHW did not carry accreditation with the BBB, and on a scale of A through F, CHW presented with an “F’” rating.

There were also 116 complaints from consumers in various states, according to the plaintiff. “The division alleges that Choice Home Warranty refused to provide the basic services that consumers were paying for, and pocketed the money paid by consumers,” said acting Director of Consumer Affairs Steve Lee, in a prepared statement.

CHW denies the insurance claim denied allegations.

Consumers will often purchase an extended warranty for their home once the initial warranty issued by a contractor for a new home expires. Similarly, consumers will also purchase extended coverage for important appliances and systems such as furnaces, air conditioners, refrigerators and freezers. When a warranty company reneges on its obligation, home warranty lawsuits usually follow.

READ ABOUT HOME WARRANTY INSURANCE LAWSUITS

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READER COMMENTS

Posted by

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Choice Home Warranty denied our heater and a/c claims. We purchased our home a few years ago (built in 1986). We couldn’t provide maintenance records prior to three years ago so they used the excuse that our 20+ year old unit wasn’t properly maintained. Did I mention the unit is possibly 20+ years old? Oh, and I live in Arizona? They are a JOKE!! All the good reviews are from inexpensive repairs. Just hope it’s nothing over $200-300 or it’s coming out of your pocket because CHW won’t pay it.

Posted by

on
Choice Home Warranty is also denying my claim to fix my air conditioner. We purchased the house September 2016 and had a home inspection,with a separate air conditioning inspection which we paid extra for because we live in a very hot part of the United States, which we have the paperwork for and now the compressor went out on the air conditioner and they are denying the claim saying we didn't properly maintain the air conditioner. If anyone knows who the owner or President of this Company is can you please contact me at my email. I am going to contact our local news and get them involved. I would also be interested in getting a class action lawsuit started against this company.
What a scam.

Posted by

on
I have the same issue with Choice Home Warranty regarding replacing my AC unit. The terrible customer service, the unprofessional technicians and the deceptive practices they continue to do. I can't believe they are still licensed to do business in any state. If anyone wants to file a class action lawsuit. Please count me in. Not only have I paid for this sorry service warranty, I still have to pay out of pocket for something that is clearly covered. They are more of a headache than they are worth. BUYER BEWARE!!

Posted by

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I signed up with Choice Home Warranty June 27th, 2016,on August 26, 2016 my A/C compressor died. The unit was 22 years old and well maintained. I live in Texas and A/C gets plenty of wear and tear. They denied the claim stating that it wasn't normal wear and tear. The A/C contractor said it was normal wear and tear. I have decided to discontinue them and get my money back.

Posted by

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Choice Home Warranty is supposed to cover all major appliances including Air Conditioning Unit. My Air Conditioner was not working well so I called the Home Warranty Company to have it repaired. The repair was requested on July 6th. I did not receive a call to address the claim until July 8th. They were busy and having trouble finding a technician. The technician they assigned was not available until July 10th, now 2 more days. I asked for different technician with faster response. They would not offer another technician. The technician came to my house 6 hours late. He never once called to say he will be late. I wasted entire day waiting for him. Upon inspection, the AC Evaporator Coils were said to be leaking the Refrigerant. I asked the service technician to replace them. He told me he must get approval from Warranty Company. Two more days went by, now July 12th, and no response for the claim. This is six days total. I called to complain and they told me claim was denied. The Home Warranty should cover my Air Conditioning Unit. The Claims Supervisor and Claims Manager both state they will not cover the $2,000-$2500 repair due to general liability exclusions. Also, the service has taken 6 full days. This was considered an emergency situation since I live in Texas and its life threatening to not have air conditioning in summer. Claim Supervisor and Manager denied all claims and were extremely rude. This company is well known for denying all claims. Please contact me if anyone is in process of filing a class action.

Posted by

on
Oh Boy, CHW is still in business??!! I have an appliance repair company in Bergen County NJ and they owe me $1,200! They would approve the estimate, issue an authorization number and then deny the claim! When you call them to try and collect, they would first deny that they issued the authorization, then they get down right nasty and lastly just hang up on you.. I just gave up! They've done this to quite a few companies here in NJ as well! I hope they get what they deserve!

Posted by

on
I purchased a Home Warranty Plan from Choice Home Warranty Company. The first time I tried to use it for AC problems they denied the claim. There policy face document indicates the duct work is covered. Section 4 and 14 of the agreement also spell out such coverage. The back ground announcement when you call there office says "all services are covered and no home inspection is needed". It is almost impossible to reach them by phone once you file a claim. It is very clear the CHW is ripping off people and not paying real claims.

Posted by

on
When my furnace broke down, I left a message for my HVAC contractor. Then, remembering the Choice warranty promising repair for $60 instead of $400-500, I canceled the request and called Choice. The authorized Service Provider collected the $60, but performed no repairs, leaving me without heat in the dead of winter. Four days later he returned, fixed the furnace and demanded $1256 on the spot (I later confirmed the legitimate charge from professional HVAC would have been $450 or less). Two months of trying to resolve the issue with Choice elicited expressions of sympathy, partial (less than 10%) payment, unkept promises to follow up, and a broken settlement agreement. Choice has fired the provider, but I’m left holding the bag for the fraudulent charges. In compliance with Choice’s warranty terms, I gave 30 days notice and have now filed for mediation - another $250.

Posted by

on
Hi Guys,

I am in the same boat as you guys although not as badly affected as some of you. I am going after them as well. They are unethical and fraudulent to the core. When my water heater's anode rod was busted and sprung a leak at that point I called them and they sent a tech guy who said the water heater can't be saved. I call them up and they say sorry case closed as they dont cover the tank. What the F@#$ ? Feel free to reach out to me in case you want to collaborate.

I am an NJ resident. I have filed against them in BBB and also called up NJ consumer affairs division to report this. I should be hearing about the next steps in a couple of days. I am also planning to file with the Federal trade comission as they are in conflict with section 5 of the FTC act.

Hang in there fellas.

Posted by

on
If enough people want to file a class action suit against Choice Home Warranty, please contact me, I'm in. I can not believe in todays society this can happen, this company can rip people off and continue to operate, where is the justice for the honest working people? CHW told me how they were the highest rated with BBB and how they would take care of you. Well when my air conditioner broke down 7 months later, I found out what a piece of shit they were. My 90 year mother was living here plus a 1 year old great grandson and we live in the hottest part of the country in AZ. After 9 days I threatened them with a law suit and they said oh we are going to help. The air conditioner guy comes out informs us we have to pay $536 and to top it off the young guy didn't turn off the breaker before bending down to weld the leak in tube and caught the circuit box on fire. So now we have to wait for electrician to come out at dark and we are told that we will have to pay him $200.00. Called CHW and told them I wasn"t paying it. Then next morning get up and air conditioning isn''t working, call air conditioning company to be told they didn't work weekends. Monday sends out same dumb guy, it's working for 2 hours and breaks down again. Finally after 11 days, it's working. We paid CHW $2475 for a 5 Year plan plus one year free. My credit card company was able to get back $975. from CHW which now being with them 7 months costs us over $2000. I don't want to just get my money back, I want to put this sorry company out of business! I did check out BBB and they gave them a A rating, that is what I went by!

Posted by

on
I have been owed 245.00 since 3/2015. This company a a piece of shit.
I bet they are in northern NJ. That place is notorious for being a "toilet"!!

Posted by

on
We are an appliance repair company in Florida and I have a similar problem. Elrees gave me the same run around as John and It has been over a year and we still have not gotten paid from them. However our invoice total up to be about $10k. No lawyer is willing to take it since its really not worth the money to them. I wish we had enough people to get together in a class action suit.

I would sign up!!!

Posted by

on
We are a plumbing ,heating and air service company in southern md. We signed up last year to run service calls for choice home warranty. Every job we went to we followed procedures and obtained an authorization number from the for the jobs and we gave them the pricing upfront and they each time agreed to the price and issued an authorization number. We paid for the parts and of course we also paid our technicians to perform the work. We did 13 jobs for them totalling over 1400.00 that they owed us collectively. They didn't pay us in the time frame of 30-45 days as promised. When we called the account manager elreese he claimed our prices were too high and that's why we weren't being paid. He demanded that we resubmit another pricing guide with reduced prices and then he would get us paid. This is dishonest as they agreed and authorized our charges prior to us performing any work. We informed another account manager named Scott that we cannot perform any further work for them until we are paid on the outstanding balance. The account manager then said "well if you are refusing work then we will have to turn you off in our system and it will take 365 days to pay you"?????. They have no intention of paying us. We informed them we will file a lien on the property at each home we worked at for the owed money since the homeowners signed our paperwork authorizing the charges as guarantee if the 3rd party doesn't pay. They then threatened our company with a lawsuit of $5000.00 for each lien we file. We have made over 30 calls for payment to this company. Each time they get nasty and make threats. When I asked Scott what's right and wrong he told me he nothing more to say to me and hung up on me. Now they won't answer our calls at all. We have involved an attorney who sent a demand letter for payment.. the demand letter cost us 275.00 .. choice still refuses to pay us. We told them we will sue them... they laughed on the phone and said "go ahead we have lawyers to protect us from that".. Why is this company allowed to be in business. Why are they allowed to steal goods and services from people. We are just a small business . They really hurt us by stealing from us. They are dishonest. I feel that the state of new Jersey should be doing something to help all these other small businesses that have been screwed by choice home warranty. . Someone please help. .. a simple review of their books or computers by the state would reveal all the companies they have screwed and then contact could be made and these companies and even customers can get what's owed to them. The states attorney in new jersey needs to handle this instead of letting more people get ripped off every day. Attention new jersey government. .. shut down choice home warranty.. they are criminals and should be in jail.. pay attention and do the right thing.

Posted by

on
I'm a service provider that worked for Choice Home Warranty. The warranty company not only denies claims submitted by policy holders, but the also screw their vendors. We obtained approvals for 61 plumbing service calls and they did not pay us. They owe us over $6500.00 and we are not the only vendor in this situation with CHW. I know several others.

Is there a class action suit for vendors against CHW?

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