What can I do if my home warranty is not being honored?

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What can I do if my home warranty is not being honored?

I bought home warranty insurance for my house. Recently, the furnace broke (a switch on the control panel is bad and the core part of the furnace, the heat exchanger, has cracks which makes the furnace not safe to operate). The insurance company at the beginning promised to repair it under the conditions that the parts are available for the maximum of $1450. However, the technician could not find the parts since the manufacturer no longer produces that model. Therefore my claim reimbursement of any portion of replacement cost was denied. Their reason is that they don’t cover the heat exchanger. Yet, on the website, it says that they cover the heating system of the house and they will repair or replace the unit.

Asked on November 9, 2013 under General Practice, Wisconsin

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

A warranty is a contract, and a failure to honor that contract is considered a breach. While I thank you for writing those portions of the agreement that you are disputing, the document really must be read as a whole to determine how you will approach the matter. Many contracts start out with basic guidelines and finish with exceptions to the coverage you expect. For example, a company producing a car might write into their warranty that they don't cover "neglect." 

Regardless of what kind of warranty provider you're talking about, the contract is your best reference. Warranty plans are explained in detail, and you may benefit from a lawyer or other expert who can review it with you. In a case like this, the warranty coverage might dictate the company make certain efforts to find parts after which you'd be expected to buy a new unit. If it doesn't have a caveat such as this, the company would be responsible to meet their stated obligations.

When Do I Need an Attorney to Handle My Warranty Contract?

If the contract is too vague, that can be to your benefit with an experienced lawyer. Whether it was your furnace, water heater, or something else, you bought the warranty for peace of mind. Now their customer service is failing to provide that service. 

A lawyer can start by sending a demand letter to the warranty company laying out your claim and the resolution you want. The company may want to schedule further service calls to try to fix the problem or determine a root cause. Keep in mind, if the contract doesn't cover normal wear and tear or neglect, they may be looking for evidence of one or both of those things. You should be just as diligent about documenting everything.

If the company refuses to make it right or doesn't respond, your attorney can take the next step to file a lawsuit against the warranty company to enforce the warranty coverage you paid for. 

Always consult with your attorney before you make more moves. For example, if you called another service provider to replace your furnace, it could backfire. Your lawyer can help you make a plan to get a working furnace without damaging your case.

Generally, a warranty claim is not a lengthy process. If you believe a warranty on your major appliances or anything else is not being honored, make sure you have experienced professionals on your side.


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