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Home warranty plans are meant to provide you peace of mind by protecting you from unexpectedly high repair costs of worn-out home systems and appliances. However, this peace of mind is disrupted when customers report claim denials. There can be many reasons behind the denied claims, which we have thoroughly examined and compiled into this guide on filing successful claims. Keep reading to learn about boosting the rate of claim approvals.
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Steps to file a home warranty claim
If your covered system or appliance is damaged, you must contact your home warranty company to file a service request. You can call their customer service phone numbers, login to the customer service portal or follow any other guidelines mentioned in your service agreement. The customer care executives will note down your problem and assign a licensed service technician.
After arriving at the scheduled appointment, the service provider will conduct a preliminary diagnosis to clarify whether the service needed by the system or appliance is eligible for coverage. A contractor will be at your door when the verification is completed, and the report approves the repair or replacement. The homeowners are required to pay a small deductible or service fee to the contractors.
Things to Keep in mind before filing a home warranty claim
Home warranty contracts have many clauses that detail the inclusions and exclusions, along with the prerequisites for extending coverage. It’s essential to read them thoroughly before buying the home warranty policy to avoid being caught unawares. Here are some of the key considerations:
You must file the claim as soon as your covered device breaks down due to normal wear and tear. Don’t try to DIY any repairs
Home warranty companies usually offer 24/7 assistance, but it may take up to 48 hours to contact a service contractor. Many home warranty companies offer online claim filing services on their websites so that you can file your claim via the forms
To avoid claim denials, read your service contract carefully. In the terms and conditions section, you can find details about covered items and their dollar limits. Generally, the companies only pay up to the dollar amount stated
You should keep maintenance and service records handy, and if you have gotten a home inspection, then that report as well
If you have a manufacturer warranty covering any item, the home warranty does not extend over it
Reasons for Home Warranty Claim Denials
Home warranty plans don’t cover everything. Sometimes breakdowns fall under the ambit of exclusions. Look out for the below-mentioned points to avoid claim denials.
Improper installation
It can be one of the causes of your claim being denied. Your service provider will reject your claim if your home systems or appliances break down because the installation is done wrong. The company can also deny your claim if you have violated any of their safety codes while installing.
Lack of Maintenance
You must properly maintain your home systems and devices on a regular interval, failing to which your home warranty claim can be denied. To maintain your home devices, you can do regular cleanings such as changing air-conditioner filters, check water heaters and dishwashers for leaks, or clean the condenser coils of your refrigerator, plus other services specified in the user manuals.
Exceeded coverage caps
Before you file a claim, check that you haven’t exhausted your home systems and appliances’ coverage limits. The home warranty companies have coverage limits on the covered systems and appliances, and it restricts the amount paid on repair and replacement by them. Additionally, keep in mind that the repair costs will not entirely be in your control, and you may have to pay some extra amount out-of-pocket in some cases.
The company may also deny your claim if they determine that the systems and appliances have malfunctioned due to unusual wear and tear, such as improper usage, accidents, or natural calamities.
What to do when my claim is denied?
It is frustrating when a home warranty claim gets denied because you may have paid a deductible and the out-of-pocket expenses are likely to be high. Here is what to do if this happens.
Firstly, check your service agreement, and verify the inclusions. You can find this information in the terms and conditions section
Try to contact your service provider and request them to provide you with the necessary documents to appeal. Keep all of your home warranty information handy while talking to the company’s representative
If the company has sent any service technician, ask for the inspection report
You should also go with a third-party inspection as it can be valuable to refute the denied claim. Most home warranty companies do allow a second opinion
If your company is not responding to your requests, you can file an online complaint on the review websites or in a small claims court. Most of them want to maintain a good reputation and are prompt in responding in such places
You can submit a review on HomewarrantyReview. HWR has a complaint resolution program (CRP) which informs the user that the company is willing to address their problems and resolve them
Suppose the company doesn’t respond despite all this, file a complaint with the National Home Service Contract Association. To do so, you need to fill the form with details like your full name, phone number, and your issue
Many home warranty companies specify arbitration as the only way to resolve disputes
Depending on the severity of the case, you may be able to approach the state home insurance department, which is responsible for overseeing service contracts
How to Improve Your Claim Approval Chances?
If you are filing a claim, make sure to double-check these pointers to enhance your claim approval chances.
Understand your service agreement. You can save a lot of time by carefully going through the terms and conditions, as it will give you specific details about inclusions and exclusions in your home warranty plan
Don’t contact the local contractor directly. You must always go to the company first, failing which company may deny your claim. You should pick a company with good round-the-clock support
Home warranty companies tie up with specific contractors. If you call a local contractor without contacting them, they won’t cover that repair or replacement
Get a home inspection report to prove that there were no undetectable pre-existing conditions
Go for reputed companies, preferably with a nationwide presence
The Bottom Line
A home warranty plan helps homeowners, home buyers/sellers, and even realtors in many ways. You can save the extra repair costs by investing in one, getting skilled professionals’ services, and reducing your liability as a seller or realtor. However, claim denials are known to occur. The pointers mentioned above will help you to reduce the chances of claim denials. You can also check out the reviews of the best home warranty companies with a reputation for approving many claims annually. It will help you understand what sort of claims generally get approved.
FREQUENTLY ASKED QUESTIONS (FAQS)
Q.
My home warranty company shut down without warning. How do I make claims now?
A.
Many fly-by-night home warranty companies shut down without any notice or warning, leaving the customers hanging. You can file a legal complaint against them. Never choose a company that delays payment, has complex terms and conditions, and does misleading marketing, as most such companies turn out to be scammers.
Q.
Are home warranties effective immediately?
A.
Most home warranty companies have a waiting period of 15-30 days, after which you can use their services. This is to prevent chances of misuse of the plan. However, a few companies do not have any waiting period if you can demonstrate continued coverage.
Q.
Do home warranty companies get sued?
A.
Yes, home warranty companies get sued. For instance, in 2011, a couple filed a lawsuit against a home warranty company that denied their claim on false grounds. Later, it was found in the class-action status that the company paid the contractors to deny claims. If you have been through any of such situations, you can file a complaint through an attorney.
Q.
Who regulates home warranty companies?
A.
In the U.S, Home warranty companies are generally looked after by the Commissioners of Insurance. However, there are a few states where the regulation is lax.
Q.
How do I know if the home warranty company will honor my claim?
A.
If the breakdown is due to covered reasons and you have coverage limits for that device, the company usually pays for the service.
Q.
How do coverage caps work?
A.
The coverage caps are the annual limits that determine how much the company will spend on repair, replacement, and diagnose your covered home systems and appliances. Each company offers different coverage caps such as, Choice Home Warranty offers max system coverage for $3000, and American Home Shield offers max appliance coverage for $6000.
Q.
How do I get my home warranty company to pay for a claim after I completed the repairs?
A.
Home warranty companies will not pay if you repair the broken appliances or systems without their knowledge. To make them pay for your repairs and replacements, you must contact them first.
Q.
Can a home warranty policy be purchased when something breaks and then cancel it?
A.
You can purchase a home warranty, and also cancel it without much hassle, generally for free within 30 days from the date of purchase. However, each company has different terms and conditions regarding the cancellation process. We recommend that you contact your service provider for particular details. The plan won’t cover items that are already broken down.
Q.
How to get emergency services when I file claims?
A.
Some companies offer emergency repairs and replacements. You need to contact your service provider for specific details about emergency claims.
Q.
How do I fight a home warranty claim?
A.
A homeowner has the legal right to fight a home warranty claim. You can start with checking your home warranty documents and contacting the company. Furthermore, you can follow the company’s appeal process, and if none of it works, you can file complaints in court.
Q.
What is the first course of action for disputed home warranty claims?
A.
Arbitration could be the first course of action for disputed home warranty claims. You can seek that with the help of an arbitrator administered by the American Arbitration Association (AAA). Under some circumstances, you may be able to litigate through court.
