How to beat home warranty companies at their own game

By
Home Stager
http://actvra.in/56ZT

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 LegalCohen@aol.com.

Good luck.

 

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Tim Maitski 09/11/2008 02:06 PM

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Rainmaker
715,282
Troy Erickson
Diverse Solutions Realty www.ChandlerRealEstate.weebly.com - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Good info, and I feel this could be said about most businesses.  No business wants to go to court for exactly the reasons you stated.  Home warranty companies also don't want to pay out on all the claims that are filed either.  That is why what they cover is so hard to decifer.  After all, home warranty companies are in the business to make money, as most businesses are.

Sep 11, 2008 09:30 AM #8
Rainmaker
388,301
John Walters
Frank Rubi Real Estate - Slidell, LA
Licensed in Louisiana

You have to believe for $400 dollars how much can they really fix for you?

Sep 11, 2008 09:42 AM #9
Rainer
1,710
Beverly Cohen
Marietta, GA

Lenn, I agree with you.  I don't want to see home warranty companies scammed although that seems to be what many home warranty companies are trying to do to homeowners.  My intention is to provide advice to homeowners whose legitimate claims have been denied.

Deborah, the AHS contract is, indeed, a very craftily drafted contract.  Most people don 't read contracts, especially insurance contracts, until they need them.  I actually dissected every word of the AHS contract and then asked someone about the things I didn't understand.  As an example, I needed to have the compressor on my air conditioner replaced but didn't know what all was involved.  The contract states that AHS won't pay for the "recapture" or disposal of freon.  I didn't know what "recapture" meant until someone explained to me that before the compressor can be replaced, the freon must be removed from the old compressor.  So, unless I paid to have the freon removed, the old compressor could not be removed so the new one could be installed.  The service contractor tried to charge me $250 to remove and dispose of the freon and to dispose of the old compressor.  AHS was not charging$250; the service contractor was.  I called other HVAC companies to find out what they charge to dispose of freon and compressors and was told by all that they don't charge customers to dispose of anything.  I questioned the legitimacy of the charge and refused to pay unless the service contractor just justify the cost.  The reason the service contractor was trying to charge me $250 is because AHS does not pay them anything close to what they could earn for the repairs if the homeowner did not have a home warranty.  And stating in the contract the things for which AHS won't pay gives the service contractor the opportunity to charge the homeowner for those things.  Since most homeowners don't know what is involved in making a particular repair and don't usually have time to find out, they are vulnerable to being scammed by the service contractor.

The AHS contract is also craftily drafted to give AHS all of the authority and the homeowner none.  AHS is the only one with authority to decide if a repair is an emergency.  AHS is also the only one who can decide whether to repair or replace an appliance.  AHS insisted on patching my A/C compressor 5 times before it finally died although the service contractor kept recommending it be replaced.  AHS didn't care that several times I had no A/C for an entire weekend, two of which were long holiday weekends.

When I posted the blog, I wanted to include these links but I wasn't sure how to do it.  I also didn't want the contents in the links to be a distraction from the original message which they often are for me.  If the links work, one of them should be the blog written by the former employee of American Home Shield which I found to be the most informative. 

American Home Shield Complaints

WREG-TV Memphis - Warranty Woes With American Home Shield

Pissed Consumer - American Home Shield warranty issues

Home Warranty Secrets: What the Home Warranty Industry Doesn't Want You to Know...

Sep 11, 2008 02:05 PM #10
Rainer
8,346
Tim Maitski
HomeAtlanta.com - Sandy Springs, GA
Editor of MaitskiREport.com

Thanks for the great article.  I have been doing the same research recently and had come across some of those sites.  It's truly amazing. The conclusion I came to is unless you want to haggle about getting paid, just avoid those plans.  Create a reserve fund and go to some place like Angie's List for some good recommendations.

Sep 11, 2008 02:14 PM #11
Anonymous
Anonymous

Beverly:

I ran into something very similar with AHS, alot of double talk and passing the buck, and I ended up not having the energy to dissect the entire contract. I just decided to ditch this "Home Warranty" altogether. RE companies push the sale of these warranties, and now wonder who is getting "kickbacks".

Thank you for your research and sharing this with us.

Sep 11, 2008 02:26 PM #12
Rainer
150
ser mas
Rescue, CA

Craftily Drafted Contract is just the tip of this deceptive company. Don't just think it's just a few "trouble-makers" that want to cause trouble here.

 I'm an agent who recommended this company for over 15 years to clients. They used to be good. But that was a LONG time ago. I had them on my own house. Then one day the dishwasher broke. Do you know that what they replaced with was so noisy that is was plainly unbearable. It was a cheap piece of  "new" junk. One to get for the wife when you want her to file for divorce.

 Then the heat pump went out and they kept trying to fix it with the "spring-wire & thread" method. Sending the repair man over and over again until he said.."THEY NEED A NEW UNIT!" Well what do you think happened then?...oh yea, ...they sent another guy for a 2nd opinion. All the time we are freezing in the house for 2 weeks. Finally the new unit arrived...it's like the DISHWASHER! I can no longer talk on the phone in the office due to the racket that cheap "new" piece of junk makes.

 And today they said they can't replace the water heater under their "weasel" caused filled contract due to "sediment"?! So my handicapped 88 year old mother has to take a bath with water that won't stay hot after the tub is just half filled!  ..... I agree SUE THEM! I'm joining the California Class Action lawsuit to get justice. They just take you money as sure as "Bernie" did and leave you with the shaft.

Oh...one more thing...before I could even tell them the symptoms of malfunction on the Water-heater the lady on the home says: " I see that you policy is due for renewal now, do you want to make a payment by phone"? .... I kid you not! 

 Regards, Armyofone

Mar 12, 2009 03:11 PM #13
Anonymous
Bill

Is it too late to join the class action law suite?

 

I've been a 16 year AHS member. Never used them until this week..and what a nightmare!

Jun 10, 2010 01:03 PM #14
Rainer
64,421
AmeriFirst Winston-Salem
AmeriFirst Financial (Winston-Salem, NC) - Winston-Salem, NC

Frightening.  I've long wondered about how home warranty companies can survive covering what they claim to cover.  I'll investigate further to see if my clients have had this kind of experiences in our area.  Thanks for the post.  Good heads up.

Nov 09, 2010 02:53 PM #15
Anonymous
jaknirk

Thank you for the great article!  We are currently undergoing a similar problem with a craftily worded contract, only our problem is with Home Security of America.  We had our house inspection done, which said our septic was working fine.  20 days into owning the home, we had a problem with the septic system.  We called HSA, and apparently in some very fine print is that they don't cover septic for the first 30 days.  Amanda L, the adjustor we talked to flat out said that if we had waited 10 days to report it, it would have been covered.  When I asked to talk to a supervisor, I was informed that there were not available (at 3PM on a Tuesday), and that I would need to leave a message.  Did that, never received a call back.  When I went back and read all the fine print in the contract, I don't think they would ever have to actually cover anything. 

Nov 30, 2010 08:41 AM #16
Anonymous
Lynette

I am going through this same thing right now. Though I don't blame AHS as much as the scammer AC company. He pretty much confessed to me that he is charging me the $200 disposal fee for my compressor, because AHS will not cover many added expenses on his part. Is this my fault? No, it is the fault of the company who decides to contract with AHS. This guy knows I am mad, and I have been without AC in 106 deg weather, since last Friday. He is now dragging his feet!

 

I hate scammers!

 

Thanks for your info and listening!

Lynette

Jun 14, 2012 07:50 AM #17
Rainer
4,313
Jack Stroup
Carrington Real Estate - Indian Rocks Beach, FL
jack stroup
I am just starting the dispute process with home warranty of America. The tech came out and said the 15 year old ac died due to power surge. We are 1 month into contract. My senior buyers have returned to their sold home and are sleeping on the floor.
Jul 31, 2013 10:53 AM #18
Rainmaker
1,143,476
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Los Angeles CA

Home warranties are often quick on dumping people who need help with costly projects. Medical insurances do the same. Seems like ''normal'' practices for them. They are happy to collect money, but not willing to separate with it.

Jun 16, 2015 06:52 AM #19
Rainmaker
1,143,476
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Los Angeles CA

I just canceled my own home warranty. Got all promised ''pleasure'' of being charged and not helped. Are all of the home warranties are the same? What is the solution?

Aug 17, 2015 01:09 PM #20
Anonymous
Dana

I have AHS and we have been trying to get our AC fixed for 3 1/2 weeks. They contracted an AC company and when he showed up he never put in the diagnosis for over a week. Then after being on hold for hours trying to find out the problem they brought out the wrong part and added more issue that had to be repaired which of course are not covered under AHS. The technicians are suppose to be here today and no one has showed. We have been on hold for over an hour and I am not sure what is happening. Can I sue them.

Jul 03, 2017 10:49 AM #21
Anonymous
Carrie

Dana, I would like to sue them as well. I have not had AC for three weeks, and they have sent four different companies out. Now, they're claiming they don't cover my unit, but they allowed four idiots to "service" it, resulting in it's demise. I'm in Texas. Is there any class action suits against them? And does anyone know about the MANDATORY ARBITRATION or CLASS ACTION WAIVER in the most recent contract?

Jul 26, 2017 07:14 PM #22
Anonymous
Carrie

I have now been blocked from AHS Facebook page, even though the only thing I've written is in agreement with other customers and expressing my experience. I have not used curse words or threats. This company works hard to keep their customers in the dark.

Jul 27, 2017 11:08 AM #23
Anonymous
Johanna

Dana & Carrie....I would also like to sue them as well as the AC repair company. I have been without heat and air from April-June and the band-aid repair went out on Monday. Instead of the repair people keeping in touch with me, they closed up shop early on Friday and according to AHS--it is ok for me and my family to live in a house that's 90+ degrees with 6 fans running just to try and get some relief until the repair company opens on Monday.

Jul 29, 2017 01:32 PM #24
Anonymous
Josh G

Thank You ☺. I am taking your advice and starting the small claims process here in SC today. It makes me ill to know a company that fixes or replaces items in the home can blatantly and repeatedly do the opposite. Never a fix and certainly never a replacement so far in my experience. Anyway the information you put out there was very well comprised and very helpful thanks again.

Jul 31, 2017 01:06 PM #25
Anonymous
Jessica B

While AHS did provide an A/C contractor for us within 24 hrs it was only due to the fact that our basement was flooding b/c our pump burned out. In order for our cut-rate contractor to make up his costs, we were charged $350 for a hockey puck sized auto-shut off water detector allegedly "mandated by law" but certainly not covered by AHS. Other up-sells were attempted of varying degrees of legitimacy. Need less to say, when the A/C again had a problem days later, I called back and requested a different contractor based on the fact that I felt fraudulent behavior was exhibited by the first contractor and they refused. my only option was to pay another $75 for a new contractor. When I asked to speak to a manager, I got the same run around as others on this thread (not available at approx. 3:00 in the afternoon, call back within 24 hrs.) When I pressed the matter further, the initially pleasant AHS rep stated she could no longer help me because it was my husband listed on the account and not me, his wife, who pays the AHS bill every month. BIG MISTAKE.

Aug 01, 2017 10:17 AM #26
Anonymous
Carrie

I posted earlier in this thread (#22 and #23), and I am still fighting with AHS 6 weeks (and $12K) later. They are now charging me to cancel the warranty, even though they have provided NO service in 4 weeks. Because of the mandatory arbitration clause and a block on class action lawsuits in the AHS contract, it's impossible to sue this company. I want to gather complaints, but am not sure how to do that. They block people giving feedback on their Facebook page. There are way more of us, so I would appreciate any ideas on how to proceed together, without being able to do a class action lawsuit. Any ideas?

Aug 21, 2017 08:43 AM #27
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