A home warranty is a service contract that helps cover the repair or replacement costs of your home’s major appliances and systems when they break down. A plan can supplement your homeowners insurance policy — which protects your home and belongings from certain perils (like a fire).
All home warranties have restrictions and exclusions of things they don’t cover. Unfortunately, if your damaged item doesn’t follow your contract’s limitations, you may find your home warranty claim denied.
Read on to learn why even the best home warranty companies may deny a claim and what you can do to prevent it.
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Why home warranty companies may deny a claim
A home warranty company may deny a claim for many reasons, including lack of maintenance, incorrect installation or unauthorized repairs. Always read your contract carefully, as it contains the details and extent of your home warranty coverage. It may have stipulations that lead to your claim being denied.
While each company sets its own terms and conditions, here are the most common reasons providers deny claims.
1. The appliance or system is not covered by the home warranty
Home warranty companies typically offer three different types of plans: a systems repair plan (heating, plumbing, etc.), an appliance repair plan or a comprehensive plan that includes both. However, your plan may not cover every appliance or system in your home.
Exclusions vary by company and could surprise you. You may not be covered for specific parts of a system or appliance. For example, your contract may cover the repair of your garage door but not the remote.
Your contract may also exclude coverage if a pre-existing condition (present before the warranty began) is at least partly at fault for the failure.
Make sure to read our article on what is a home warranty and what it covers to learn more.
2. The appliance was not maintained properly
You must properly maintain your appliances and home systems in order for them to be covered. If the company finds that you didn’t take care of the appliance in a way that could have prevented it from breaking down, your claim could be denied.
3. The appliance was installed improperly or has safety code violations
Your claim could also be denied if the appliance or system was not installed correctly or if the installation violates local building codes. This is true even if a professional performed the improper installation.
4. The appliance has unusual wear and tear
Home warranties only cover an appliance or system when it breaks down due to normal wear and tear. The company may deny your claim if it determines you haven’t been using the item properly.
For example, overloading your washing machine or dishwasher is improper use that can cause malfunctions or damage. In this case, your claim will likely be denied.
5. The damage was caused by animals
Some home warranty companies exclude any damage caused by animals, including pets and vermin. If any kind of animal caused the damage to your appliance or system, your claim may be denied.
6. The damage is secondary to a primary breakdown
Many companies only cover direct damage to your appliances or systems themselves. If you submit a claim for secondary damage — i.e., the dishwasher overflows and ruins the carpet — your claim could be denied. However, your homeowners insurance coverage may help with the cost of repairing the secondary damage.
7. You exceeded your coverage limit
Home warranty companies place annual coverage limits on each covered appliance or system, and annual caps on all payouts. These caps are different for each home item, but on average they range between $500 for smaller items and up to $50,000 for the aggregate limit.
Even if your appliance would otherwise be covered, your claim may be denied if you’ve already exceeded your plan’s coverage limit.
8. An unauthorized technician performed repairs
Many home warranty providers have a network of service technicians who can fix your covered appliances or home systems.
Typically, you must use one of the company’s technicians. Having someone else do the repairs — or doing them yourself — could make that item ineligible for coverage.
Some companies allow plan holders to choose their technicians as long as they are licensed and reputable. Before hiring a service provider, check with your contract to see what flexibility you have.
Steps to file a warranty claim correctly
When an appliance or home system malfunctions, you can file a claim with your home warranty provider to get it fixed. Before booking a service call, you should make sure that your home protection plan covers your specific issue.
The claims process can vary by company, but here are the basic steps to file a home warranty claim.
1. Understand your coverage
As home warranty plans vary in coverage, you should review your contract documents to learn more about covered repairs and replacements, terms and conditions for filing a claim, and exclusions. You can usually obtain these from your warranty company’s website.
First, check if your plan covers the specific appliance or system that needs repair. A basic plan might only cover major systems, such as your heating and air conditioning (HVAC), plumbing and electrical systems. Other plan options may include common appliances, such as water heaters, washers, fridges, garbage disposals and ovens. Higher tier plans may even extend coverage to equipment such as garage door openers, built-in microwaves, doorbells and even roof leaks.
Next, review any particular conditions the company requires for a claim to be approved. Make sure your damaged item meets contract requirements.
2. Consider your plan’s coverage limits
Review your plan’s coverage limits and any previous claims you’ve made throughout the year. If the repair costs more than the item-specific limit or total annual limit, you may need to pay for the remainder out of pocket. Having this information before filing your claim can help you arrange to cover the cost with cash or through financing.
3. Request a service visit
Once you’ve confirmed that your plan covers the item, contact your service provider and make a service request. You can usually log in to your customer portal to find an online service visit request form. Otherwise, you may need to call to speak to a representative.
When you request service, expect to provide information about the issue. Make sure you know the appliance’s brand name, unit age and serial and model numbers. You’ll also need to describe when and how the issue started as well as whether you’ve previously requested service for the issue.
4. Pay the service call fee
Before finalizing the service visit request, the home warranty company will likely have you pay your service call fee.
The service call fee pays for the time and labor of the professional who will evaluate and repair your broken-down home system or appliance. Your home warranty plan contract will state the service call fee, which could range from $35 to $150. Depending on the provider’s payment options, you may pay over the phone or online
After you pay it and submit the service call request, the provider will arrange for a service contractor to evaluate the damage and write an inspection report. If the home warranty company approves your claim, the contractor will then repair the covered item or process the replacement.
How to avoid getting claims denied
As we explained above, there are legitimate reasons why claims get denied, but there are also steps you can take to avoid this disappointment and hassle. Understanding your contract, giving your appliances routine maintenance and keeping service records go a long way.
Read your contract’s fine print
Study your home warranty contract carefully before you sign. Learning as much as possible about your contract and coverage is the most important step to avoid an unexpected claim denial.
Keep maintenance records
Frequent maintenance will keep your appliance and systems purring for years. When it comes to claims, meticulous documentation is helpful. These records will show that you’ve followed the manufacturers’ instructions. They can help you prove the appliance or system didn’t malfunction because of improper care, but from a defect or regular use.
Take steps to mitigate damage when possible
Pay attention to any glitches, system errors or even funny sounds, as these may precede larger problems. Don’t limit yourself to just routine maintenance on each appliance or system. If you notice anything out of the ordinary, do whatever you can as soon as possible to prevent further damage.
How to dispute a home warranty claim denial
If the home warranty company denies your claim, there are steps you can take to appeal the decision.
1. Review the terms and conditions of your home warranty contract. Double check the coverage. If you don’t already have one, ask for a PDF of the contract to find keywords and relevant sections quickly.
2. Contact your home warranty company. Let your company know you want to appeal your denied claim and ask customer service to provide you with the documents you need to begin the claims appeal process. Also, log dates, times, representative names and any information obtained during your customer service calls or other correspondence.
3. Request a copy of the inspection report. Service technicians are typically required to write a report after diagnosing your issue. Knowing the information on this report — and, by extension, the reason behind the denial — will help you focus on the crux of the issue in your appeal.
4. Get a third-party assessment. As the first assessment could have missed an important detail, having a second, impartial opinion may help your case. You’ll have to pay for this assessment yourself, so make sure that what you have to gain is more than the cost of the evaluation itself.
5. Follow the appeals process. Sometimes the home warranty provider may request additional documents or records. It’s also best practice to follow up with the company if you don’t receive a response within 30 days.
6. File a complaint with the Better Business Bureau (BBB). If the provider is unresponsive or you feel the denial is unjustified, filing a complaint might prompt the company to respond. Companies like to stay in good standing with the BBB and other review sites to uphold their reputation.
7. Take further action if your claim isn’t resolved. If your appeal fails and you feel you’ve been defrauded, consider calling in the authorities. First, contact your state’s consumer protection office and file a complaint. The agency that usually investigates fraud is the state’s attorney general’s office. To make sure you’re contacting the correct office, find your state’s consumer protection office.
If all else fails, you can also take the legal route. Some states have small claims courts where you can sue for up to around $10,000, depending on the state. If you believe the home warranty company owes you more than what your small claims court awards, you may have to file a lawsuit in a higher court. Consider discussing your situation with your attorney before filing to ensure this is the correct course of action.
Home warranty claims FAQs
Are home warranties legit?
A legitimate home warranty company can help you save money on repairs to household systems or appliances. However, there are companies out there that have less than honorable intentions. Popular scams include signing people up for overpriced contracts or contracts the company doesn't intend to service.
To find a legitimate home warranty company, read reviews online and check the contract carefully before buying. Additionally, make sure the pricing is fair and makes sense for you. You can compare costs from multiple providers to find the best value.
What is an extended warranty?
An extended warranty is a type of protection plan offered by manufacturers or retailers for an added cost. It typically provides coverage beyond what the manufacturer's warranty includes.
An extended warranty is different from a home warranty contract. An extended warranty only covers a specific appliance, while a home warranty covers multiple appliances or systems in your home. Extended warranties are much cheaper than home warranty contracts because of that limitation in their coverage.
What does a home warranty cover when buying a house?
There are many extra costs associated with buying a home, such as homeowners insurance, taxes, moving and furnishing, among others. Buying a home warranty for your new house can offer you protection from the unexpected costs of repairing home appliances or systems if these break down.
When can you make a claim with a home warranty?
Each home warranty company has a waiting period between the time you purchase a plan and the time you can file a claim, but these tend to range between one to 30 days. However, exceptions exist, such as when you purchase the warranty as part of a real estate transaction. In this case, you may be exempt from the waiting period if the warranty goes into effect on closing day.
Will I be charged a service fee even if my claim is denied?
Since the service fee covers the cost of the technician coming to inspect the issue, it usually applies regardless of the outcome of your home warranty claim. If the company ultimately denies your claim, it likely won't refund the service fee.
You can consult your home warranty contract to see specific terms for your plan's service fee and any situations where refunds could apply. Try looking for a section that discusses required payments or the claims submission process.
What happens if a home warranty is not honored?
In the event that your service provider doesn't honor the contract, you can and should contact your local or state government office (usually the attorney general's office) to file a complaint for breach of contract.
Another avenue you can explore is filing a lawsuit in a small claims court or regular court. However, if you're thinking of doing the latter, we suggest you consult your attorney first to determine if this is the best course of action.
Summary of Money's 8 Reasons Home Warranty Companies Deny Claims
Home warranties help homeowners pay for necessary repairs and replacements of covered appliances or home systems. The added peace of mind and repair cost savings can make a home warranty worth it for some people. However, review the contract before purchasing to make sure the premiums of the plan make sense for you. Also, ensure you know how the home warranty works, including what’s covered and excluded.
Home warranty customers are often confused about why their home warranty claim was denied. There are many legitimate reasons why this happens.
The most common reasons for home warranty claim denials include the following:
- The service plan doesn’t cover the item
- The item was installed incorrectly
- The item didn’t have proper maintenance
- The item displays unusual wear and tear
- The damage was caused by animals (like pets or vermin)
- The damage is secondary (i.e., this issue was caused by another item breaking down)
- You exceeded your plan’s coverage limits
- You had an unauthorized service technician complete the repairs
To avoid unexpected claim denials, be aware of what your home warranty plan covers and excludes, keep detailed maintenance records and prevent damage when you can.