Overall, approximately 65% of homeowners with home warranties see all of their claims approved. While that’s not an alarming figure, it does mean that 35% encounter a denial at some point. As a result, it’s critical to know what to do if a legitimate home warranty claim is denied, ensuring you get access to the services you pay for with your warranty premiums. Here’s what you need to do when home warranties are denied.
Common Reasons Home Warranties Are Denied
First, it’s helpful to understand why some home warranty claims are denied. The most common cause is that the appliance, system, or specific work required isn’t actually covered by your service contract. Review your policy carefully to see if the appliance or system and the needed work type are listed as part of the agreement. If they’re not included as a covered item – even if the contract doesn’t expressly state it’s excluded – then you’re ineligible.
Another common reason for a denial is not correctly maintaining the appliance or system. Essentially, if you didn’t handle routine maintenance, you didn’t do your part to avoid a failure in the eyes of the home warranty provider, and that can make your claim illegitimate.
Improper installation or installations that violate building codes in your area usually result in denied home warranty claims. Similarly, wear and tear outside of normal use, damage caused by pets or pests, and secondary damage caused by a covered failure may keep the provider from approving a claim.
Reaching your coverage limit also leads to denials, even if the system or appliance would usually be covered. If you used an unauthorized technician for a previous repair, that could cause the company to deny your claim as well.
Disputing a Warranty Denial
Typically, you can dispute a denied home warranty claim. Begin by reviewing your service agreement to ensure that the claim aligns with your coverage and confirm that you haven’t exceeded your coverage limit. Then, contact the company and request an appeal, taking notes along the way to record what’s shared with you by the representative. Also, request a copy of the inspection report, as well as a reason for the denial.
At this point, you may want a third-party assessment to support your appeal. While that comes with a cost, it’s worthwhile if the associated repair or replacement is expensive. Beyond that, navigate the appeals process as outlined by the home warranty provider, giving them any supporting documentation or anything else they need to evaluate your claim.
If a legitimate claim is still denied, then contacting your state Consumer Protection Office is potentially a wise choice. You can also reach out to the local agency that regulates home warranties in your state for guidance if one formally oversees the industry in your state. In some cases, filing a Better Business Bureau (BBB) complaint can also get results, particularly if the company is otherwise failing to respond to your appeal.
How to Prevent Claim Denials
If you want to prevent claim denials, make sure that your claim aligns with your service contract as a first step. Additionally, keep thorough maintenance records to show that you’re doing your part to care for your systems and appliances. Finally, pay attention to your systems and appliances.
If you notice odd behavior – no matter how minor – it could indicate a failure is about to occur. In this case, you can get it assessed by a professional to see if there’s an issue that needs addressing, allowing you to prevent additional damage and potentially avoid a breakdown.
