In January, Sarah H. (real name withheld) wrote to LawyersandSettlements about her issue with a home warranty company. She noted that her boiler system had been leaking since September 2012 and she filed a claim immediately, but by January, the issue was still not fixed. In addition to the cost of the repairs, Sarah noted that her “basement floors and walls have water damage, personal items stored in the basement [were] completely lost,” and she missed work and had an increase in utility bills because of the constant flow of water.
When consumers go through home warranty companies to fix broken systems and appliances, they are at the mercy of the company to book appointments and schedule repairs. That means they could be waiting a long time. Furthermore, if the warranty company deems the repairs finished, even if the customer feels the job is not satisfactory, the home warranty company can refuse to cover further repairs, leaving the homeowner to fight to have repairs done properly. In other words, the customer might wind up with very little control over the repair process.
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Or, as Steve M. (real name withheld) writes, his insurance company denied his claim “on the basis of my failure to properly maintain the home furnace system, which was not a condition at the time of underwriting.”
In other words, some home warranty companies may change the rules on customers after policies have been purchased, denying claims on grounds that were not part of the original contract.
Lawsuits have been filed against some home warranty companies, alleging they practice in bad faith by not approving legitimate claims or by encouraging repairmen to use cheap fixes.