Homeowners are now complaining that they have had legitimate claims denied by home warranty companies practicing in bad faith. These homeowners, who thought they were covered in case something in their home broke down, say they have been left waiting weeks and even months for major repairs, that the repairs have not been done properly or that the wrong parts were purchased for the repair, and that companies have denied repairs citing “previously existing conditions” when no initial inspection of the appliance or system in question was ever carried out. They have also had claims denied for improper maintenance, when no maintenance was required.
Worse, some homeowners say that because of a lack of timely response from their home warranty company, secondary damage has been done to their homes but the warranty company refuses to cover the repairs for the secondary damage.
Sandra S. (real name withheld) writes to LawyersandSettlements that she phoned her warranty company to have a plumber look at a leaky pipe. Even though she phoned her warranty company in late August, it took until early October for them to get a plumber to her home. She writes that the water was still dripping in mid-October, causing rust stains and cracking of the tile in the floor. But her home warranty company will not cover the damage caused by the water leak.
“According to them, the floor is ‘secondary damage’ and cannot be covered even though it was due to their negligence,” Sandra writes. “They said that their contract specifically states that they will not cover secondary damage due to negligence.”
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NBC Chicago (12/5/13) reports that homeowners will spend approximately $2 billion on home warranties this year. The same report, however, highlights the case of one woman who paid $375 for a one-year plan to repair or replace her appliances if they broke. When her furnace stopped working, the home warranty company sent a repairman who diagnosed the problem as a pre-existing condition, even though he had never seen the furnace before, and the home warranty company had never requested inspection reports for the furnace. The woman wound up paying $1,700 for a new furnace. After the report, the home warranty company said it would repay the woman’s $1,700, but many policyholders wind up out of pocket for such repairs or replacements.