Arbitration and its place in Home Warranty Claims
7 February 2009
One Comment
One of the ways that a home warranty company such as 2-10 Home Warranty or Sensible Home Warranty will work to limit it’s payouts is to use arbitration to drag out the process. When you are the home owner and have a broken air conditioner or heater, and they refuse to pay, the thought of waiting months for arbitration before fixing your appliance is not a very pleseant one. The likely actions that you will take if your home warranty company decides to pursue arbitration is to have your appliance repaired by your own contractor. While HomeShieldScam.com would not tell you not to do this, you do need to be careful with this approach. If you hire your own contractor to repair your appliance, chances are your home warranty company will try to avoid paying because you did not use an approved contractor. Be very careful that you choose a reputable contractor and that you have vetted them through a referal service such as the better business bureau or through a consumer site such as Angie’s List.
If you do choose to repair the unit yourself, make sure that you CAREFULLY document your claim using the Make a Claim Checklist. This checklist will help you carefully document your conversations with your home warranty company so that if you end up in arbitration or court, you have a written record of your attempts to get your claim paid.
You might also check out our Top Ten Reasons your Home Warranty Company Will Not Pay list. This list details the most common ways that your home warranty company will claim that they do not owe you payment on your claim. As always, take a minute and document your issue on our site so that your issue can help others.
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My wife has National Home Warranty. Her rental condo has what is called a hydronic heater. The house is heated by hot water being passed through a coil, kind of the reverse of air conditioning. Anyway, they didn’t have a contractor that works on this type of heater so they “authorized” her to get her own contractor to do the repair and agreed to reimburse. As you already figured out, they didn’t pay. Firstly, they agreed to only pay for the thermostat and gave a bogus exclusion which refers to “water heaters” This is a home heater and not a water heater, so the exclusion was not appropriate for this claim. She sent in the full estimate at least twice and they never reimbursed anything, not even the thermostat that they agreed to do. What a scam. It is extremely difficult to pursue this type of claim because the underlying home warranty company does business in several states, is difficult to get in contact with, and says they didn’t receive the bill (repeatedly).
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