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Home Warranty Lawsuits: Not All Appliances Created Equal

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Minneapolis, MNWhen it comes to home warranty insurance, not all warranties and not all appliances are created equal. As with any type of insurance, customers claim that some home warranty companies practice bad faith insurance. Meanwhile, some appliance companies have been accused of misleading consumers about the nature of their appliances, putting customers at risk of having their insurance claim denied.

The Star Tribune (12/8/12) relates the story of a family that bought a stainless steel appliance in 2011. What they discovered, when the freezer started rusting a year after it was purchased, was that some companies use cheaper stainless steel that is not as resistant to corrosion as the more expensive stainless steel is. The problem is that most warranties--either through the manufacturer or through a home warranty company?--do not cover rust. So customers may buy stainless steel appliances believing they will not corrode, then discover they have a low-quality stainless steel, which does corrode. Unfortunately their warranties will likely not cover damage caused by corrosion.

The family in the Star Tribune article did not have a home warranty, but most home warranty policies do not protect against rust or corrosion, so consumers who wind up with cheaper stainless steel will probably be on their own to cover the cost of damage to their appliances.

Meanwhile, one customer had to turn to a local television station to get repairs to her fridge, after going more than four months without a working refrigerator. KLAS 8 News Now (1/3/13) reports they got involved after a home warranty company sent workers out repeatedly to fix the broken fridge. During one of the repairs, a hole was found in the fridge, likely caused by a repairman during an earlier repair. At that point, the home warranty company refused to cover any further repairs to the appliance. Once the local media was involved, however, the company offered to send a new fridge to the family.

The news program reports that it has received multiple complaints about home warranty companies and notes that it is the company that chooses who does the repairs and sets the timetable for the repairs, sometimes leaving customers without working appliances for months.

In addition to taking a long time to repairs customers' appliances, home warranty companies have been accused of denying legitimate claims for unethical reasons. These include claiming the customer did not properly maintain the appliance or claiming the appliance had an existing defect even when the appliance was not given an inspection at the time the policy was purchased.

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READER COMMENTS

Posted by

on
I am going through the same thing as the family in MN. Rust spots all over my 2 year old LG oven doors. LG is making me jump through all sorts of hoops to repair this problem and are blaming me for not cleaning the appliance properly. Just wanted to let you know that this problem is all over. Manufacturers need to put something in the owner's manual regarding this problem and how to clean it, but they just won't admit there is a problem. Wish me luck.

Posted by

on
While you make some interesting points, I still believe that it's still necessary to have home warranty as repair costs can get steep. It's important to do thorough research on home warranties before deciding on a company; for more information on how policies work, check out homewarrantypolicy.org.

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