Bad faith insurance lawsuits have been filed against American Home Shield and its subsidiary companies, alleging the companies improperly denied customer claims. Some American Home Shield lawsuits have been settled, including one that alleged the company paid illegal kickbacks to realtors. American Home Shield policyholders who feel their claims were improperly denied may be eligible to be part of an American Home Shield settlement or to file a lawsuit against the company.
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American Home Shield
In June 2011, a lawsuit was filed against American Home Shield by customers who alleged contractors were paid a bonus for improperly denying claims. The lawsuit, which seeks class action status, was filed by Bridgette and William Gaudet, and alleges American Home Shield denied claims regarding appliances on the grounds of "lack of maintenance," or "pre-existing condition" despite not carrying out an inspection of the appliances when the policy was issued.
American Home Shield Settlement
In 2010, American Home Shield settled a class action lawsuit filed on behalf of US citizens who purchased or were issued a Home Service Contract by American Home Shield or its affiliates between July 24, 2001 and October 19, 2009. According to the "Notice of Class Action and Settlement," (in the lawsuit Faught v. American Home Shield Corporation), the lawsuit alleged American Home Shield "engaged in a pattern and practice of failing to fulfill its contractual obligations to its customers." This allegedly included failing to provide repair and replacement services even when customers were entitled to those services, and improperly denying claims during the first year of home service contracts.
American Home Shield denied any liability or wrongdoing in the lawsuit. As part of the settlement, American Home Shield agreed to set up a review desk to consider submissions from class members who had their claim denied during the class period.
Bad Faith Insurance
Bad faith insurance occurs when an insurance company improperly denies policyholder claims or delays processing those claims. Some bad faith insurance practices include failing to pay out a claim in a timely manner, requiring policyholders to fill out paperwork repeatedly, failing to conduct a proper investigation into a claim or using unreasonable excuses for not paying out a claim.
American Home Shield Kickback Lawsuit Settlement
In the summer of 2011, American Home Shield Corporation reportedly settled a class-action lawsuit that alleged the company paid fees to realty brokers and agents for promotion of the company's home warranty policies. According to reports, the lawsuit included people who purchased warranty coverage from American Home Shield Corp between May 2008 and March 2011, potentially as many as 500,000 consumers.
The lawsuit alleged that American Home Shield paid kickbacks to realty brokerage agencies and agents in violation of the Real Estate Settlement Procedures Act, which prohibits any payment for referrals of settlement services. American Home Shield denied any wrongdoing. According to some reports, home warranty policies typically cost between $400 and $500 dollars. Realty brokers and agents generally receive fees of between $60 and $90.
Similar lawsuits against other home warranty companies are reportedly pending. Home warranty companies and realty associations say the warranties are not settlement services and are therefore not in violation of the Real Estate Settlement Procedures Act.
American Home Shield Home Warranty 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 lawyer who may evaluate your claim at no cost or obligation.
Fort Lauderdale, FL Home insurance to protect one's investment from fire, flood and other forms of catastrophe is a given regardless if a home is new, or used. However, new homes usually feature an enhanced level of protection for the consumer, separate from their home insurance policy--a home warranty that the home is built properly according to updated codes. Some contractors self-insure, while others rely on third-party providers. Sadly, having a home warranty—regardless of the provider or the builder—does not always carry the peace of mind one would ordinarily hope for or expect [READ MORE]
Montgomery, AL Customers of home warranty companies, such as American Home Shield can take heart that some previous home warranty lawsuits have resulted in settlements. One American Home Shield lawsuit resulted in a settlement, although the company did not admit any wrongdoing or liability in the settlement [READ MORE]
I have had AHS since 2001. I have paid thousands and thousands of dollars to AHS in 16 years. My claims have hardly been a fraction of the amount I paid. The biggest claims I have had over the entire period is two compressors. Both the time I have been literally robbed by their contractors for the cost of disposing the old compressor and the Freon replacement. I could have disposed the compressors for a fraction of cost of what they charged, they said unless I pay their demand they will not replace the compressor. It was black mail. Same thing with the Freon they wanted to charge me for twice the price per pound and twice the amount of the needed Freon. Of course AHS reps said tough luck. We can't do anything about it.
Now suddenly I get a letter in the mail, that they cannot offer "me" the 3 by 3 combo plan. They will offer me "plus" plan. No reason of cost difference in the letter.
I called today to find out. The representative told me " their legal team reviewed my claims and decided that because of claims in last two years only (which included one compressor and plumber call) we can't offer you that policy. She said it is "almost" the same coverage but instead of paying $543.96 per year you will pay $1199.04 per year, a hefty increase of 120.42%.
She said you have had the coverage only for four years, I provided her contract numbers all the way back to 2001. She said I have notated the account that you are not happy.
AHS is the biggest consumer fraud company. They want your money but do not want to pay claims. They give nominal amount to the contractors. Therefore contractors extract money from you for fake charges and rob the consumers. Where are the regulators. I hope some lawyer sues them again. I wonder why are the regulators ignoring AHS?
Posted by Rick Hill
About 3 or 4 years ago, we had insulation sprayed into our attic, and some ended up in an A/C drain pipe which began to leak. It was a very minor leak, and we called AHS. Their A/C contractor came out, charged the AHS fee of $75, then told us that we needed a plumber. Up to this point, no problems with AHS or the A/C guy. Unfortunately, he had removed the A/C drain pipes so that they were now draining, middle of summer and very humid, several gallons of water per hour into our ceiling. By the time that we discovered the problem, probably 10 gallons of water had fallen through the ceiling and on the floor of the master bedroom, floating and warping a hardwood floor. AHS's response, tough! Up until then, AHS had been pretty good, so we decided to let it slide. In retrospect, probably a huge mistake.
After than, so-so to OK service from AHS.
About two months ago, we had the water off for several hours, and the hot water heater overheated, and the T&P valve released. When the water was back to normal, we called AHS, were completely truthful about the water being off, and asked for a plumber. He came out, told us that the WHOLE and ONLY problem was that we were running the water heater too hot, and would have to set it to a very low setting. He didn't replace the T&P valve. With two adults and two teenagers in the house, we could have one shower, then wait for an hour for the water heater to recover, then take another shower. I turned the heater back up, and of course, the weak T&P valve started to leak again.
Asked for a different plumber, GOT THE SAME ONE. Asked for a different technician, GOT THE SAME ONE. Asked for the owner of Mr. Rooter (the plumbing company) to call, STILL WAITING. Asked for AHS to have a supervisor call, STILL WAITING. Got a letter from AHS denying all future claims on the water heater, and demanding that we send $75 for the last call. Again asked AHS to have a supervisor call, STILL WAITING. In the mean time, an ice maker broke, and since we owe $75-----the invoice had been in our hands for literally TWO DAYS---we can't make any other claims.
Can't get away from this company fast enough!
Posted by Mahfuzul Haque
This is Mahfuzul Haque,I have American Homesheild since 2015.When I signed up it was so many promises like 3 STEPS, if we cant fix it we will replace it.I have very very bad EXPERIENCE with this BS company.
After signing up I called for 3 Fosses were leaking, but the contractor who came in he fixed one of them but refused to fix the other one and the other one he tried but could not fix it.My wife called me immediate and said the guy was very rude and was THREATING my wife verbally I also talked to the contractor and he was RAISING his voice with me over the phone,I was very upset and asked him to leave my house. But the Funny part is I called AHS several times several days and explained them everything what happened but was never solved. On the top of that he called me back and THREANTED me again that why I complained against him.AHS still never send anybody to fix that Fosses.
Now part 2--I called again AHS after few days about my AIR CONDITIONING, someone came and checked and I also gave him $75 copay. Now they are saying AHS does not cover this service. I was so Frustrated kept calling them and finally they said I have to pay around few hundred dollars to repair that, I don't remember the exact amount but it was over $400.
Now part 3---I called one more time last week because my cloth washer was not working, the contractor came in and i paid them $75 co pay ,after 2 day AHS sent me an EMAIL that this repair does cover by AHS, I called them they sent someone else for 2nd opinion and the answer stays same, does not cover by AHS.They called my house and talked to my wife and said it will cost us $400 to repair.
Now the bottom line is this is the WORST HOME APPLIANCE WARRANTY company in this country.DO NOT GO FOR AHS.
Posted by fixer
I Purchased a home and an American Home Shield contract in 2012. The steam boiler was leaking to the point of eroding the concrete beneath it. They had an expert tech (about 20 years old) come out to look at it. He took pictures and told me it had problems. AHS told me they wouldn't do anything about it because the tech told them there isn't anything wrong with it. I had another plumbing company check it. The plumber took one look at it and said, "You have some serious problems here". I had to replace the boiler. When he dismantled it, you could clearly see that the water jacket was leaking to the outside, as well as into the firebox. I sent AHS pictures, but they didn't want any thing to do with it. I had to eat a bill of almost $8,000.
Posted by Sabrena
I bought my home in June 2015. The upstairs AC unit broke the Saturday before the seller had American Home Sheild. The office where my home closed had numerous brochures on AMS. I purchased it. They sent out a HVC repair man he replaced the compressor. Someone else who worked with him was suppose to come put a switch. Instead he said that was not the problem did something else charged 225 for freon Broke the next day took three or four days put another compressor. Sam story it's now July and Texas and Hot. Long story short 5 compressors and burned carpet upstairs burned wood new copper tubing new "core". It kinds worked till last week totally out. 100.00 service charge new unit inside and out. Yesterday the tech left I go in the living room water is coming down my fireplace onto all my Christmas decorations tv carpet etc. the tech comes back looks at it says I don't know where the water is coming from. So today it's now my fault. I am responsible for all secondary damage because the tech said he didn't break anything so that's how it is. Oh but AMS authorized a sump pump to be put in. The tech promised to return at 11am. Called says he has another job he has to go on first. Maybe later today or tomorrow...... No heat air in 4 bedrooms. But they just don't care. If AMS had fixed this unit back in June correctly I would not have burned hall carpet or now wet floor/sealing or carpet. Theirs is not for the paying customers. They know how to waste money by band aids. I would love to be a part of a class action. I have pictures and pipe to show shoddy workmanship. The reputable dealers here won't even consider working with AMS.
Posted by Ed Warneck
Why did homeowners not arbitrate as allowed in contract?
Posted by Colin Moreton
I went on the website and placed a order for a refrigerator repair that was not cooling. this was on Oct 19,2015On Oct 21st I received a call from Williams dependable appliance who ordered two parts, a fan assembly and a computer board. NO phone calls from vendor. I always had to call to see what was happening. on Oct 28. i receive a email from fed ex stating items delivered 10/28/15 9:57 am
I called Williams appliance and message only machine. called again in the afternoon same message machine. I cailed 10/28/15 4:00PM no response, then on 10/29/15 I called again and message machine kept calling until someone answered finally got a hold of Williams dependable service and they said we will come Saturday bet 12:00 and 5:00 Tech arrived installed both parts and left. Guess what still have the same problem. kept calling Monday got a hold of gal in office who said it is out of our hands Mr. Williams doesn't know what else to do, it is beyond his scope of experience so we have contacted Ahs to assign another vendor. They did that but that company could not come out until Friday between 1:00 and 6:00 November 6 so I called got cut off three times so I had to explain to three different representatives and the best they could do is Thurs Nov 5th bet 12:00&5:00PM. So I await the outcome of that vendors observation of the issue.
I get the feeling AHS hires anyone for a flat fee NON LICENSED < NON INSURED< NON EVERYTHING> IF I search and find this to be true then a class action litigation should be initiated for contracting with non licensed contractors..
Posted by Chris Riberdy
Called AHS to submit a claim for device on my water heater expansion tank that had broken off at the pile. Water was filling my garage. We specifically stated that it was the expansion tank on the phone. Customer service scheduled a plumber to come to my home. When he arrived, he called AHS to diagnose the problem. They, in turn, stated that it was not covered, so I paid the number 315.00 to repair it. AHS billed me 75.00 for absolutely nothing. Calls to AHS did no good. Why would you call a plumber when you already knew that it was going g to be a denial? To make 75.00, that's why. I will not be renewing my contract. Had they told me that the expansion tank was not covered, I would have accepted that and kept them. I don't do business with firms that prey on their customers.
Posted by Tracy Chapman-Smith
In the beginning of Aug. 1015, my air conditioner froze up. Called AHS, as I have been a customer for over 11 years. They came out that day and replaced the motor. My air conditioner continued to fail, would not cool my house. I had to buy a widow unit to try and stay cool. Called them again, after vendor failed to show up 3 days in a row, I called them back to send out a new vendor. That vendor recommended the outside unit and the coil in the inside unit be replaced. AHS stated to ME in a phone call that they were going to replace the Entire unit and I would get a call for an install date. After 6 weeks of calling, no new unit and no return phone calls, I was contacted and told a third vendor would be doing a second opinion. Second opinion?? If that was the case why didn't they fix it weeks ago. Now Oct. and only in the 60's outside, the new vendor stated it was keeping the house cool. It's 68 outside, of course it will keep my house 72 on the inside. The new vendor is only going to clean the coil and repair some minor duct work. The new vendor stated we would not know if this fix works until the next hot day, probably next year!!!! This is a terrible company, they do not honor their contacts, but don't mind taking your money for years and years!!
Posted by Anuj Varma
I think it is time for another class action suit. There are over 5000 complaints on Memphis' better business bureau website. Each and every one is a gory story of incompetence, inefficiency - and downright (what amounts to) illegal business practices.
we have a high-end Maytag washing machine that recently started to make some noises when spinning at high speed. We called AHS but service was denied due to "bearing defec caused by washing machine being overloaded". We have been using washing machines for over 50 years and we have never been told we stuff the drum with too much laundry. A 15 year-old machine is bound to have some wear and tear and the technicians never inspected our washing machine. They made the claim based on the problem we told them.
Posted by Jane Jones
I think they are working with a local company here to rip people off. I had a drain problem 2 weeks ago. I was told that it was not covered but because it is a rental property I wanted it fixed immediately so I paid the person to run a camera. I paid that then AHS wanted another 75 on top of that. I paid them their service fee but AHS had to have more. I was told it was fixed , problem reoccurred I was told the line needed to be dug up and changed. 2800.00 dollars later. I went by the house this week with a friend that does pluming but was unable to help at the time. He said what they did at best should have cost 3 to 5 hundred dollars and I am out 3300.00. Well this week the water heater broke and because it has not been drained every two years they denied the claim. I don't know anyone who does that nor have I been told to do it. AHS put the one in 14 years ago that is there, again they same company came out they want 1400.oo for a new water heater and installation. I have had this warrantee for 20 years but I won't have it much longer. I am getting the water heater replaced today for 700.00 dollars.
They use to be a good company but I give up.
Posted by Wendy Hallmark
I would like anyone who would like to be part of a class action lawsuit to contact me. We are in our 3rd week of no refrigerator, 3 service calls already, and horrible response times on calls (as I type this, I have been on hold for 37 minutes of my 45 minutes conference; I'm a teacher). I am ready to take AHS to court and need others who are having the same experiences. I think this company needs to have a major overhaul in how they do business or just plain go out of business.
Posted by Illinois
The only way to get these scumbags to pay up for a replacement (why else would you play $55+ per month??) is to sue them. Specifically for Bad Faith Insurance. There has already been a class action levied against them in the past.
Sue them then arbitrar will arrange payment. Get your appliance fixed by a legit local contractor. Then cancel your contract with AHS asap.
Put that $55/month into a separate personal account escrow. Then when a rainy day comes, you will have the funds to address. You will save yourself the worry, headache, idiotic gamed bureaucracy, and intentional procrastination inherent in the asinine AHS system. Which is completely rigged, if you haven't already figured that out.
Posted by ErinF
We've been trying to get our AC repaired for days and have been on the phone with AHS arguing for countless hours trying to get someone to come fix our AC. We live in Houston Tx and the temperature was 97 with humidity which felt like well over 100. We have 2 small children and a dog and haven't been home in days. We've had to get hotel rooms and stay with family. I took the day off of work because I was told YET AGAIN that someone would be coming to fix my AC only to be told they "unfortunately didn't have me scheduled." So I've lost work hours on top of the money spent trying to get myself and my children in a house that isn't hot enough to kill us and I STILL do not have my AC fixed. I've had 4 different contractors assigned to me spoken to multiple representatives and managers. I've never been so angry over the extreme lack of responsibility and care taken by a company that we have paid to provide a service.
Posted by GC
We are currently going through replacement of our HVAC system. We have been told by 3 different people, 3 different units that they would be replacing our unit with. When questioned why they were telling us 3 different products of various comparison we were told it is what they ordered and that is what we are going to get whether we like it or not. All of the people on the phone were rude except for Kim. I have never dealt with such a horrible company. This has been a horrible experience and I don't chose to go through this again.
Posted by rws68
I had similar experience with AHS. My realtor purchased the policy for me when I bought a foreclosed home in CA. I turned in about 5 or 6 claims and AHS first denied every claim, often trying to use the "normal wear and tear" insuring agreement as an exclusion and other times completely misconstruing their contract language. I first tried talking to the claims people in Iowa and got nowhere. I then contested every claim to corporate and the CA Insurance Department pointing out what AHS's policy said and how their policy actually said it covered my claims. As soon as I "cc'd" the Ins Dept and corporate, they paid every claim and then non-renewed my policy. I had an advantage because I'm a retired Litigation Manager that helped draft policies for an insurance company in another state. I implored the CA Ins Dept to investigate what I believe is their fraudulent claims practices, but it doesn't appear they have. I'm confident if my past company had handled claims the way AHS does we would have been found in bad faith in that state. I've placed my redacted documents/letters on Google drive for any help they might give.
Posted by Anonymous
AHS send a tech out in 2014 to replace the compressor in A/C., we paid for the coolant. Now in 2015, our A/C went out again come to find out AHS and the first tech ordered and installed the wrong compressor. Now its scheduled for repair, AHS has denied covering the coolant cost even though it is their negligence that the A/C is broken. We are out of the $450 we put into the first coolant, while the first technician and AHS steady taking our money for service fees and monthly payments. We sent a complaints after complaints to corporate, waiting for a supervisor to call us back that was 5 days ago after the reps constantly tells us they will call you they are investigating the problem. They did have time though to call the company that is replacing the compressor, to tell them they will not cover the coolant though, really after your negligence. You ordering the part, you sending the tech out to fix it. I really need info on a lawyer
Posted by marlys duray
I fought with them and the appliance company for my dryer for over a month. Finally when one of the reps kicked the complaint up to corporate did I get results. Now I am going through the same thing with my washer. It needs a new transmission and pump. They are passing the buck back and forth and in the meantime I am waiting for a complete breakdown and expect one of these days for standing water where I will have to wring my clothes out by hand. Nobody offered to kick this matter up to corporate this time. I am filing a complaint with the bbb tomorrow morning on both of them and will suggest to the realtor that she may want to quit suggesting to her buyers that they carry a warranty through AHS.
Posted by Anonymous
We have been using AHS for over 16 years including numerous repairs to our 2 air conditioner units. They have arranged for repairs and we continued to paying the annual fee. On or about the 11th or 12th of March we put in a request for air conditioner repair. On March 18th Crystal Air Inc. came out and inspected the unit. They told us that the compressor was bad. They also said that some building codes had changed and they did not think AHS would pay for the code change which required a larger cement base for air conditioners. They expected AHS to replace the compressor but we would probably have to pay for the cement base. They said they would send the claim in and if AHS did not cover the code change we would have to pay for the new base. AHS told us they were reviewing the claim the 2 times we called for an update. Today 4/3/15 we received a letter dated March 3oth that denied our claim. The letter said that since we did not have a filter that should have been on our unit; the missing filter caused the liquid refrigeration to get into the the unit and burned out the compressor. We had never been told that our units needed a filter the numerous times AHS had sent companies out to repair our air conditioning units over the past 16 years. It appears as though they are refusing to replace the unit per their warranty which stated that if they could not repair an item, they would replace it.
Posted by Georgia
Have been without heat for a month. Have sent three techs but still not fixed. Two small kids at home and is 25 degrees outside. When we call to check the status, we wait for 20 minutes each time on the phone.
Posted by Maryland
I've been requesting services on my heat pump since 2004 nearly every year to-date. AHS has provided only enough assistance to keep the unit working. Now that the heat pump needs to be replaced, they are accusing me of failing to provide maintenance and has denied my request for a replacement pump. The unit is literally falling apart because they only would send techs out who agreed to do the bare minimum to keep it running and no more.
Posted by Maryland
I have had ongoing issues with my heating and air-conditioning unit. American Home Shield has always provided the maintenance crew, who would only due minimal work to keep the unit "working." Now that the unit needs to be replaced, American Home Shield says the breakdown is due to my failure to maintain the unit, even though we have a long history of repair requests going back 10 years.
Posted by California
Warranty claim for a pool heater was denied. FAHW said that it is the rodent damage so it is not covered. We asked FAHW several times to send us the evidence that shows the damage is indeed caused by the rodent, but the company refused.
Posted by California
My 16-year-old A/C compressor died. AHS sent out a repairman who falsely wrote in his report that the unit was “poorly maintained,” despite the fact that we just had a maintenance company come out less than three months ago. AHS denied our claim based on his report. We are currently waiting on the second opinion.
Posted by Georgia
I filed a claim with AHS concerning a faulty pool light, filter pump and pool heater. The contractor inaccurately denied my claim. The only company they had to do a 2nd opinion was a company that previously denied a claim that was subsequently overturned by a 2nd opinion.
I paid for an independent contractor to look at the equipment and they agreed that the AHS contractor was mistaken. I feel that this is one big scam and I have emails to prove it.
Posted by Texas
HAD PROBLEMS WITH CLAIMS BEFORE, AND CURRENTLY HAVING TROUBLE GETTING SOME COVERED REPAIRS DONE.
Posted by Texas
Refused to pay for Freon to repair my AC. Also, I have an outside electrical outlet that does not work. They sent two different electricians to repair; neither did. Their contractors are substandard. I still do not have the outlet working after paying for the $75.00 fee.
Posted by Florida
My air conditioner literally exploded. The whole neighborhood heard it/saw it. I had two seperate contractors come out and both said it needed to be replaced. My wife has lupus and I had no choice but to get it done as it was hot outside. I called American Home Shield and was denied the ability to even file a claim.
Posted by California
I had an AC compressor that put out 50 degree air. AHS replaced it with one that puts out 60 degree air. We live in the desert, & the new compressor takes twice as long to reach temperature. AHS says they replaced the old compressor (5 ton) with a 5 ton & that is as far as they will go.
Posted by Florida
AHS denied my A/C claim due to lack of maintenance when they have never inspected my A/C prior. My home is 17 years old and they conclude that lack of maintenance is why my compressor failed. We in fact have had our unit maintained.