Insurance Claims – Another way to pursue tough claims

Recently, there was an interesting review posted at AHS warranty discussions page about dealing with insurance claims. The legal option suggested by the reviewer might be useful to some homeowners, who have difficulties dealing with home warranty insurance claims.

Insurance Claims

It is not practical and cost effective to take legal route to pursue your insurance claims and you may want to read How to pursue insurance claims article before you go that path. However, if you are fighting an insurance claim on a big ticket item, and you have exhausted all other options, this is definitely an effective strategy. Author of this post himself was an attorney and he effectively used the legal threat to beat the home warranty company.

Here is the excerpt:


American Home Shield – how to beat home warranty companies at their own game

I have discovered how aggrieved homeowners can turn the tables on home warranty companies and beat them at their own game. Please share this with everyone you know.

I’m an attorney and after having a problem with my home warranty company, American Home Shield, I decided to investigate whether other homeowners had experienced the same or a similar problem. What I found were web sites devoted to consumer complaints on which numerous homeowners had recounted incidents of fraud, deception, and rip-offs by their home warranty company. I also found a blog written by a former American Home Shield employee and another written by a former plumber for a home warranty company. Both recounted situations that would not pass the “smell test” in a court of law.

I also investigated lawsuits that had been filed against American Home Shield in Georgia, which is where I live. I found about 15 cases. The majority of cases had been filed in small claims court. As I reviewed the cases, I discovered that none of the cases had been litigated. In every instance, the case had been settled to the Plaintiff’s satisfaction although the details of each settlement were not part of the case file. With the knowledge that all cases had been settled to the homeowners’ satisfaction, I realized that American Home Shield would settle with an aggrieved homeowner before allowing a case to go to trial. My conclusion is that the only thing aggrieved homeowners need to do to beat home warranty companies at their own game is to file suit. The last thing American Home Shield wants to do is litigate a homeowner’s claim and the reasons are obvious to me.

The most obvious reason American Home Shield would not want to litigate a claim is that in most instances, the cost to American Home Shield to settle a claim would be less than the cost to litigate. The average amount of a claim in the cases I found was $3,800.00. Two were for less than $1,000.00 and only one was for more than $10,000.00. I’m sure far more than the 15 homeowners who have filed lawsuits in Georgia have had their claims denied. American Home Shield wins when a claim is denied and the homeowner does not sue, which is exactly what American Home Shield is counting on homeowners not doing.

Another reason American Home Shield does not want to litigate is because the company does not want to have to defend its craftily drafted contract or its questionable business practices, which is exactly what it would have to do if a case went to trial. American Home Shield also does not want such information to become public knowledge, which is also likely to happen. Additionally, a judge or a jury would also be hard pressed to return a verdict favorable to a company that engages in questionable business practices.

The final reason American Home Shield does not want to litigate is because a lawsuit actually places American Home Shield in a precarious situation. American Home Shield would have a difficult time defending any claim by a homeowner because the company has no first hand knowledge about the claim; it would need the testimony of the service contractor who, for its own reasons, may be less than eager to testify. The only knowledge American Home Shield has is what the company has been told by the service contractor. And any testimony from American Home Shield about what it was told by the service contractor is hearsay and not admissible in court.


To defend a claim, American Home Shield would need to subpoena the service contractor who actually made the diagnosis to testify about the claim. If the homeowner has done his/her homework, he/she would subpoena witnesses who could dispute the witnesses for American Home Shield. The homeowner should subpoena one or more service companies who had been called either for a second opinion or to make the actual repairs to dispute the testimony of the American Home Shield service contractor. The homeowner might also consider locating one or more other aggrieved homeowners to testify about their problem with American Home Shield. Another good witnesses for the homeowner to subpoena would be a former service contractor for the home warranty company or a former employee of a service contractor.

Since American Home Shield has at least three significant reasons why it does not want to litigate, the best and easiest way an aggrieved homeowner can beat American Home Shield at their own game (and most likely any other home warranty company) is to file suit. The one thing for an aggrieved homeowner to keep in mind is that if he/she does not sue, the home warranty company will win. But if he/she sues, the homeowner will most likely win. And that is how an aggrieved homeowner can beat American Home Shield at their own game.

My advice to aggrieved homeowners is not to stress over a denied claim, the denial of a situation as an emergency, repeated “band-aid repairs,” or a delay in authorization or in the repair of an item. I would also advise a homeowner not to waste time arguing with American Home Shield but to set a reasonable deadline for the appropriate action. Upon expiration of the deadline without receiving satisfaction from American Home Shield, the homeowner should then proceed as if they did not have a home warranty and then sue American Home Shield for reimbursement. The homeowner should also remember to document every action or inaction by both himself/herself and American Home Shield. Although the disadvantage to the homeowner is initially having to pay for the repairs, the advantage is that the homeowner can choose the service contractor and the brands and quality of products. I won’t guarantee all aggrieved homeowners will prevail every time but I have good reason to believe most aggrieved homeowners will prevail the majority of time.

For aggrieved homeowners whose claims were denied at sometime in the past, you may still be able to sue for reimbursement. To make that determination, the homeowner needs to research the statute of limitation for suing on a contract in their state. In any event, a homeowner should be safe filing suit for a claim that was denied during the past twelve (12) months.

Within the next six months, instead of reading homeowner’s stories about being scammed and ripped off by their home warranty company, I want to read stories about how homeowners turned the tables and beat their home warranty company at their own game.
If anyone has any questions, I can be contacted at [email protected]



Recent Comments
sandy berrett
The best way to get through to these crooks is to file suit against the people who are the stockholders based upon fraud which will allow you to get to their pockets, past the bogus corporation shield. As well you should file a complaint with your local U.S. Attorney in the federal jurisdiction for wire fraud and mail fraud. The best way to break a chain is to cut the weakest link. A court action well publicized against the real estate companies who promoted these bozos will bring some action also. When the home buying and home selling public learns about which realtors to avoid, gues s what will happen to them and to the warranty companies they have promoted as a remedy for your home problems. When you sue the real estate companies, they must turn around and sue the warranty companies and the so called "technicians" who the warranty companies send out. It would be smart for many to get together for a class action lawsuit will cost these companies possibly millions of dollars in penalties and attorney fees.
Sandy Berrett
We are preparing a lawsuit against Landmark Home Warranty (out of Utah , but o.perating in several states. Landmark was not operating as a licensed corporation in the State of Idaho when our policy was issued to us via our realtor and the seller's realtor. We believe we have causes of action agains Landmark Home Warranty for fraud, wire & mail fraud, and other torts as well as for other negligent and intentional acts of misrepresentation . We are also suing Landmark to pierce their corporate veil to get at the principals, Chris Smith and Alma Jeppson so they will be personally liable for any punitive damages which a competent jury may award. We believe that the Federal Criminal Statutes under the RICO laws both for civil and criminal acts will apply to our claim and that the time are ripe to include Class Action certification against Landmark Home Warranty. If there are other homeowners who have been similarly burned by false statements made via telephone, or email please contact us.
This week, we have had a very unfortunate experience with AHS and would like to know if anyone has had a similar experience, as we are trying to determine how to pursue this. I will start by saying that I am a real estate agent and have purchased many warranties for my clients through the years. We purchased a home 3 months ago, and I asked that the seller provide us with a home warranty as well (due to an older furnace). We had a slow drain in the kitchen on Monday and after I first reached out to my plumber (who is phenomenal), I decided to submit the claim to AHS because my plumber was tied up with another job. Tuesday morning, two technicians came to our home to correct the issue. When my husband opened the door they barely acknowledged him and walked past him heading for our kitchen (which was the first "red flag"). Within 5 minutes, one of the technicians (who was only there to "learn" because it was his second day), yelled to me asking for a mop. When I got to the kitchen, the entire floor was flooded and pouring into our basement from behind the back wall as well...(a mop???). Needless to say, we have at least $10,000 in damages due to the flooding that was a direct result of the technician's actions...Before taking the time to truly diagnose the issue, he decided to jet water from a hose into the line (with the hope that it would clear the blockage). No need to be a plumber to determine that if that is your chosen technique and it doesn't successfully clear the blockage, the water is going to come back out (and all over our home). Once the technicians realized that we were clearly upset by the situation, they packed up and left (without reassembling the plumbing under the sink).....So, now we are faced with the clean-up and recovering the costs for these damages. AHS will take NO RESPONSIBILITY for damages caused by one of their contractors. The plumbing company has insurance (that will only partially reimburse us for our losses). Placing a claim through our own insurance company is an option, but we will be penalized in our premium for the first claim (for 3 years) and if we need to place a claim for something during that time (that is not a result of a third party's actions), then we will drive the cost of our homeowner's through the roof for a second claim...To make matters worse, AHS simply passes you around to other people acting as if they are working to assist us with the situation...(with absolutely no intention of assisting us with anything). I am hoping to hear some of your thoughts as to whether we have something to pursue. Our home (that we were just starting to get settled into is a wreck)...The only positive that I have gotten out of this ordeal is that I will no longer be providing a warranty as a "gift" to my clients...because if this had happened to one of them, I would be devastated....(Thanks for taking the time to read this lengthy message).
John B
My policy with Nations Home Warranty (Dallas)states parts and labor is covered for each 'covered system or appliance'. My HVAC went out, after the contractor had been out 6 times to work on it. The heating element was still under a parts warranty, but there was no labor warranty. Nations states that systems with a manufacturer's warranty are not covered by their service contract. Makes sense except for the fact that it was $2000 for their contractor to replace the heating element (which was more than double every other estimate I got). My contention is that my service contract covers whatever is not covered by the manufacturer's warranty that would otherwise be covered by my service contract. In other words, if my service contract convers parts and labor, and my appliance warranty supplies the free part, my Nations warranty ought to cover labor. Of course, Nations doesn't see it that way. Thoughts?
Laxman Kanduri
CHOICE HOME WARRANTY (CHW) an Edison, NJ based company is not what it is advertising itself to be: "Breakdowns and repairs on covered systems and appliances are hassle-free" is a total lie. I came to know only at the end of my contract period (last month) that when I called them for a broken down a/c. They came up with various excuses for denying the claim in spite of 90 degree temperatures. Consequence was bearing the heat for over two weeks and spending for leak detection and a new system out of my pocket. Now I'm complaining to the NJ AG, BBB and preparing to sue the company. Consumers Beware...
$2400 and 3 weeks later!! Living in Las Vegas during the hottest time with temps outside of 107 and 91 inside home our A/C went out. Within a year we have had 4 techs from 4 different companies come out on this old A/C unit. Our home warranty company is First American Home Buyers. They have put a band aid until I finally went off. The final tech stated full replacement as this 4th contractor had just came out 3 weeks prior to service. We did get a new unit but it took me to threaten legal action and hanging up after talking myself blue in face reaching different customer service reps from home warranty. The home warranty a $50 credit to go buy some fans. My husband is a disabled Veteran, elderly with COPD and Vascular leg problems. This was stated to Home Warranty from beginning and all of a sudden they offered $150 assistance to buy some sort of cooling device to help. Our friend provided us a small window unit but it was still over 83 degrees in which was unbearable in that room. I relocated my husband, small dog an myself to Red Roof Inn and we stayed there 17 nights that cost us over $1400 due to health reasons. During all of this between the home warranty and contractor provided us with lies throughout the process therefore creating more expenses from our pocket. We were told that we should have had a case manager from the home warranty company from the beginning due to the urgent health situation. We did not hear from this Michelle person until the end when she knew the A/C was finally or believed it to be finally placed on roof. I have documented everything from the start along with pictures of my husbands feet/leg swelling due to not having his medical devices available from home to the hotel. We were told from Contractor that the home warranty was paying everything only to be hit with a $950 bill on top of the hotel expenses we had put out. The contractor hired a metal machine fab shop to finish a part to adjoin new A/C to home and this machine shop made the part off by 11 inches that kept us still at hotel an additional 4 nights due to their screw up. This was after Contractor received their $950. We are now fighting with Red Roof Inn due to over charges on credit card on a amount of over $300. I would like to move forward with filing a complaint for both the home warranty company and contractor for non communication between themselves and with us. It took me to let them know that I will be contacting an attorney to go after them for them to finish this. Not one time did the home warranty nor contractor care about our welfare during this process nor the cost that we incurred during their delays in addressing the issue. Both of these companies need to be addressed on their business practices due to their non professional manner with no regard to anyone but themselves. I will not let this lay still but need to find someone that believes we have a case or not to pursue both companies.
I've been fighting and arguing with Choice Home Warranty regarding my air conditioner. They sent out Priority Plumbing and Air who temporarily fixed the problem. 2 weeks later my air went out again. Warranty sent out Air Patrol to get a 2nd opinion and technician reported that I had 2 Filter Driers which caused warranty company to deny my claim for a new compressor stating the reason of improper installation. I hired 2 different companies out of my own expense and both stated there was only 1 Filter Dryer and the other was a Muffler. My technician called Air Patrol to see why they are misdiagnosing and the supervisor agreed to come out and look for himself. Supervisor from Air Patrol came out and he did agree that his technician did misdiagnose and was going to let warranty company know. I get a call from warranty company stating claim denied again but this time it's due to rust found which caused a restriction in the freon line. This new diagnosis was never mentioned from any of the other technicians. At this point I will now have to come out of my pocket to get my unit fixed. I have no choice since I live in Las Vegas and having air for almost a month now if unbearable. I want to take this further but I'm not really sure where to start. If anyone out there can help, please by all means let me know.
American Home Shield is a scam! Save your money! They use only shoddy contractors who provide cheap patches to resolve issues. I had my pool filter blow up due to old age and after two of their contractors came over to look at it and told me that was the reason AHS is denying the claim stating the contractors told them the unit broke due to "secondary damage caused by lack of maintenance". I am taking them to court and filled a complaint with BBB.
I have called twice to Allied Home Waranty - for repairs - each time the sent out a copny called lone star. Each time the cost was 60 trip fee(which i sexpected) But i did not expect the uncovered cost to equal the price of going straight to a vendor without the insurance. The uncovered heating unit price was over 1300.00 dollars and the hot water heater was 895.00. In both cases I went to Lowes for the new hot water heater to save money and to a heating company for a new fournace for 400 less. The home warranty company in both cases where higher than going straigt to a dealer.
Allied Home Warranty sent out Lone Star Repair twice - each time the repair cost for uncovered items was higher than i could go straight to a company and order brand new equipment and have it installed. They wanted 987.00 in uncovered parts for a new 50 gallon hot water heater and 1300.00 in uncovereed parts for a new fournace. Cheaper to buy outright than go through Allied Home Warranty.
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