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How to Beat Home Warranty Companies at Their Own Game - Part II
Posted by LegalCohen on 05/02/2010
(The following information and advice applies to American Home Shield. Whether or not the advice applies to any other home warranty company is unknown.)

I recently observed a trial in which AHS was being sued for denying a claim. After the trial, I had an opportunity to talk with the attorney who had represented AHS. The attorney advised me that AHS always settles the lawsuits or pays the claims when sued. Regarding class action lawsuits, whether the person remains part of the class or opts out is not relevant to the outcome of the case; AHS does not use a pending class action as a defense to settling the case. What this means is that if you sue AHS, you will get your money back. The only losers are the aggrieved homeowners who do not sue.

Although I had long suspected that AHS made little or no effort to contest lawsuits filed against the company, my advice to anyone who has a claim denied is not to waste time trying to make AHS either repair or replace an appliance. Have the appliance repaired or replaced at your own expense and then sue for reimbursement. This same advice applies to what you consider to be an emergency situation or an unreasonable delay by either AHS or the service contractor in repairing or replacing an appliance or approving a claim.

You are also likely to be more satisfied with the service contractor and the appliance you have selected as a replacement than the below builder’s grade of appliance provided by AHS. You will be able to hire the repair company of your choice and choose the color, make, and model of the new appliance. In the few instances I have read about when AHS has replaced appliances such as A/C units, furnaces, refrigerators, and stoves, the replacement item has always been substandard. In one instance, the A/C unit AHS used to replace the old unit was so noisy that the homeowner could not hear the TV over the noise.

When a claim is denied, if the homeowner sues, the homeowner wins. If the homeowner does not sue, AHS wins. I am encouraging everyone reading this who has had a claim denied to sue AHS for reimbursement. I also suggest anyone who sues AHS to attach copies of your receipts to the complaint because that is what AHS will want to see before making an offer to settle. Also, sue only for your out-of-pocket expenses; do not expect to be compensated for loss of time from work or for punitive damages. Do not let AHS win; beat them at their own game. LegalCohen@aol.com

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Posted by UncleH on 2010-05-26:
I respectfully question the author's true motives, I see from the email signature that they are probably an attorney......
Posted by Soldbydon on 2013-03-20:
I was an AHS Sales Rep - direct employee - and I generally agree. I was asked to attend a pre-trial hearing on an A/C unit that had been covered by AHS for years but when it failed, AHS initially refused to pay because the A/C unit's exterior casing was rusted, rendering the unit inoperative. "Rust" and other "pre-existing conditions" are not covered by the warranty. AHS settled rather than go to court. BUT! The offer from AHS was a return of premium paid (about $400) rather than replacement of the A/C unit. Read the fine print - depending on the policy terms they can likely make that offer and it will stick. I rarely ever saw them pay a claim that was more than 3 times the amount of the premium paid in because they have limited their liability by stating limits of repair/replacement costs they'll expend under the warranty.
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How To Beat Home Warranty Companies At Their Own Game
Posted by LegalCohen on 09/11/2008
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.

[solicitation snip]

Good luck.

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Posted by MSCANTBEWRONG on 2008-09-11:
I have a contract with these folks...I need to call for air conditioning service...I'm somewhat leary but now I'm going to call...I've paid for this service for 2 years but have never called on them to resolve my issues with air conditioning, plumbing, roofing etc...they according to their own contract ensure all of these areas and more...I'm going to contact them tomorrow for a service call...I will keep all updated on my experience...wish me luck!
Posted by Anonymous on 2008-09-12:
Good luck, MSCANTBEWRONG. Leave enough time in your schedule next week to file your small claims case.
Thanks for the tips LegalCohen. It's too bad that it takes the threat of legal action to get home warranty claims settled, but all these HW companies are pirates.
Posted by Homer123 on 2013-04-02:
I have been doing some repairs FOR the AHS people and am ready to send them a letter to not contact my company anymore. Tired of rude authorizations people trying to squeeze every penny out of a job. When I put a unit out of service they actually sent a guy to double check me out to make sure I wasn't wrong. OOPS I Showed the homeowner the cracks in her heat exchanger and she knew where to show the guy. This guy came 59 miles, no kidding and they gave him the replacement job for it. This woman just happened to sell their policies for people buying houses. OOPS she isn't happy. Also on a heat pump I spent an hour on the phone authorizing a new unit, and the next day they had no record of it and had to start all over, conveniently.
Then if replaced they want to supply their own version of quality equipment. No thanks, I'd rather sell quality that I trust not what they seem to trust. In my area, they can just call the guy that lives 59 miles away to do their service.
Posted by SpideySensei57 on 2013-07-19:
I've had AHS for two years and tomorrow will be my first time calling them for a malfunctioning AC unit. Unit is over 20 years old and was not replaced by the previous owners when I bought this place. I'm scared to death this won't be fixed properly based on all the comments I've read about AHS.
Posted by megan on 2014-02-06:
I could use your legal expertise. I have quite a suit I am about to file on them.
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Get your claim paid - File in Small Claims Court - it works!
Posted by ClaimsLady2 on 07/15/2009
This is my nightmare with American Home Shield



I filed a claim with AHS in Oct. 2008 for a 20 year old spa heater that was worn out and finally broke. The first person they sent out said that the spa was not to code and AHS denied the claim. I called the manufacturer, who inspected the unit and they confirmed that the spa was properly built to code. They also provided a replacement cost for the unit.

I called AHS back and requested that they send someone else out to inspect the spa heater. This person stated that the spa broke due to age and wear & tear. AHS denied the claim because they said the damage was caused by chemicals. There was no bases for this determination except that their policy does not cover damage caused by chemicals. I informed them that the spa cannot work without chemicals. How can they cover a system that requires chemicals to work properly and then deny the claim for using the chemicals? DUH!!! The heater gave out due to wear and tear (which is what they do cover). This was also the diagnosis from the manufacturer. AHS denied the claim again.

I informed them that they can only deny the claim once. They don't get multiple shots at me until they find something that suits them. If they deny it improperly on the first round, and are found to be wrong, then they must cover the claim. If they do not, just mention BAD FAITH!!

I did not contact the California Department of Insurance because they cannot make AHS pay anything, they only look for infractions in the claims handling and do not care about the consumer.

The cost to replace the system was approx. $3,000 and I sent them a demand to pay. They denied the demand. I then filed a claim in small claims court against AHS and they played the "name game". Just FYI, they are not actually "America Home Shield" each state is governed under a separate entity. I had to contact the president's office (phone # is available on Better Business Bureau website - Dave Peterson) of AHS to determine the proper entity of AHS that my contract was written under. America Home Shield of California. I had to make the necessary corrections to the small claims court because America Home Shield is not a company in California without the "California" behind it.

All of this took time, which I don't have much of, but this was an injustice. Read the NUMEROUS complaints on the interest. I refused to be jerked around and am very aware of how to read a policy. I am a Claims Adjuster! My company would never think to act so irresponsibly. We try to cover claims, not look for excuses to deny.

I filed the complaint and was looking forward to taking my turn in the court. Four days prior to the court date, AHS of California, contacted me and wanted to settle the claim with a Policyholder's Release. They asked me how much I wanted. I included the cost for each time I was charged for their service call, my postage, copying costs, court costs, and provided them with the actual cost of the spa heater and labor to install it. I signed that Release and THEY PAID EVERY PENNY.

They also sent me a letter that they refused to cover the spa until the new one was replaced. I sent them a letter and said that I no longer needed coverage on the spa now and would like a refund of my premium. They refused and said I needed to pay for the coverage until the end of the policy period. I may still pursue that portion even though it is minimal.

Then last week, I received a letter from AHS that they are going to cancel my policy at the end of the policy period. Wow, what a surprise!!

I am writing this for all those individuals who just give up. Read the AHS policy. They hire contractors who do not like dealing with them because they know what they do to their policyholders. Sometimes, it is not the contractor who is at fault. The second contractor said that he recommended that they replace the spa heater. Then the claims adjuster said that he told them it was the chemicals. I got them both on a conference call and they both hemmed and hawed. Finally, the claims adjuster said that it had to be reviewed by a higher power. I then got a letter saying that the damage was caused by chemicals. So it is not always the contractor.

BTW, I recorded every conversation and transcribed everything they told me. The recording is not admissible in court, but what they told me, is.

I no longer have AHS and am saving $50. per month I want you to know that if you want something covered by their policy, find your own contractor to assess the problem and fight them. TAKE THEM TO COURT. YOU CAN DO ALL THE PAPERWORK ONLINE!!!!! It is more cost effective for them to settle with you than to go to court and get ANOTHER judgment against them.

Don\'t just take no..........

Best of luck

PS. Just looked at the Better Business Bureau website. AHS has an A + rating!!! They must be kidding or paying them off.
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Posted by bikmot on 2010-02-12:
Did you find a reputable company after ridding yourself of AHS
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Don't do business with AMERICAN HOME SHIELD
Posted by Tude on 11/02/2009
CARROLL, IOWA -- I took out a home warranty with American Home Shield when I purchased my home in 2002. I paid every year as the price went up and up for the sole purpose of having a warranty on my air conditioning heat pump since our house was 20 yrs old. When the heat pump finally went out after 27 years I needed a replacement. The unit they wanted to send me was the cheapest and lowest quality unit they could find. My unit was a top of the line unit in it's time which was 1982 and cost 3000 dollars then. The cost of the unit they wanted to replace mine with was 1000 dollars! This is a total rip off. I got 4 quotes on comparable models to mine ranging from 5700 to 4925. AMS told me if I didn't accept the unit they were replacing mine with they would give me a cash out of 2031 dollars which the technician that was replacing it was charging 995 dollars to install it. I informed them that I hope they could sleep good at night ripping people off this way.

My advice to everyone is to not do business with these people because you'll be giving them your money for junk in return.

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Posted by NanS123 on 2009-11-03:
Believe me, I feel your pain. I have battled with my home warranty company (Total Protect) for a month to get heat back in my home. I think all of these so-called home warranty type companies are nothing but a big rip off and a huge waste of money.
Posted by moneybags on 2009-11-03:
With AHS, call and demand to speak to a supervisor. You may have to tell the story 2-3 times. When you get a supervisor, exp;ain the situation once again and remind them that they have a "Contractural Obligation" to replace with a similar unit. I was able to get an extension # and e-mail address. I kept on with twice daily calls and got satisfaction. And be sure you get names of every person you talk to. (I'm a realtor and my company endorses AHS. I threatened to never sell another AHS policy -- maybe that helped, too.)
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Avoid At All Costs!
Posted by Ambrosales on 11/04/2013
PHOENIX, ARIZONA -- AVOID AT ALL COSTS!!! Bought a policy when I bought my new home and all was good, then 2 years later my washer started leaking and I called. I was told that my washer was not covered! Apparently when I signed up with them it was not a blanket policy that covered all my appliances and item, but it only covered my *Top 10*, so only 10 item could be covered and my washer wasn't one of them. I told them that I never picked a top 10 and knew nothing about it and what were they?

1. A/C including duct-work
2. Dishwasher
3. Garbage disposal.
4. Water heater
5. Plumbing
6. Dryer
7. Electrical
8. Heating inducing duct-work
9. Built-in Microwave
10. Ranges/Ovens/Stove-tops.

So my first question was who picked these for me and why would A/C and heat be 2 different items since they are the same machine? and why would I pick electrical and no my washing machine? I was blown away and very upset, when I asked them to fix my policy since I never picked a top 10, they told me that I would have to cancel this policy and buy a new one to add the washer, but the washer would have to be fixed beforehand and I would have to send them proof. So I fired them on the spot, and now they are sending me bills for the remainder of the contract which they broke.

NEVER GETTING ANOTHER CENT FROM ME!!! Keep sending the bills guys, they will never be paid.
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Posted by azRider on 2013-11-04:
heating and air are two separate devices. during the summer air uses a evaporator coil that air is pushed through from the blower. the coil is chilled by the condenser unit. in the winter the blower blows air over elements that are heated either by gas or electric or the reverse of the condenser unit. either way separate parts separate coverage. many home warranty's don't cover things like washers and dryers. and many require that all appliances are in good working order. the best warranty company I've worked with is first american. they cover most items including things like appliances. I have them on my rental properties.
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Took Advantage of the Situation
Posted by Jacgreenlee on 10/28/2013
MARIETTA, GEORGIA -- What a racket! Sent out plumber to repair leaking pipe. When all was finished, was informed that I need a new pressure regulator, no coverage and a $520.00 bill to pay. Still had to pay $75 AHS deductible even though they were not going to cover. I had been paying them for over 9 years! Their offer to me......$100 if I did not cancel for my trouble, but would not pay me the $100 if I did cancel. I figured I had paid them somewhere between $4500 and $5000 over the 9 years. Do your own math. Self insure yourself. You will come out on top and not have to deal with AHS and the contractors they are in cahoots with.
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American Home Shield Terrible Service
Posted by Michelle.spohnholz on 08/13/2013
ATLANTA, GEORGIA -- HORRIBLE! This is a national home warranty company that has over the 13 years I was a customer decreased coverage and increased prices. My most recent claim has been such a nightmare to deal with. the customer service representative I was on the phone with today was so incredibly disrespectful that she LAUGHED at me twice during our conversation. When I asked to hold for a supervisor she told me that she can't do that and that I need to get off the line or she would hang up on me. I would not recommend this company to any consumer who expects any level of customer service for their money. I have been without air conditioning for a week with three small children in August in Atlanta and no one there even seems to care. Our last service request they sent a contractor who claimed that severe demo was needed to fix a water leak and our tenant simply re-sealed the shower drain and the issue stopped. When asked it they would rebate the service charge for the negligent plumber, they simply stated we had 15 days to file a complaint and we missed the window. Either the management of this company is completely out of the loop as to what their customer service reps are doing, or this company which used to provide a decent service has become a complete scam. Now I can put my American home shied complaints on social media and invite the rest of the world to tell their horror stories as well to protect consumers from feeding this money grubbing company.
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No Hot Water for 3 days
Posted by Tabarrett2 on 07/15/2013
DULUTH, GEORGIA -- We've had American Home Shield for over a year. Of course the first year was great because we paid them on time every month and nothing broke down. As soon as we renewed, our hot water heater had a leak. They sent out a technician, who complained because he had to leave his date on a Sunday night to repair our water heater. The unit worked for a week, then shutdown completely. We now have no water pressure or hot water. When we called AHS to request that some one come and fix it, the contactor they serviced couldn't come for 3 days. We asked them to refer us to another contractor and they refused b/c it was "within guidelines". Apparently having no hot water isn't considered an emergency. I'd like to see them go 4 days without a shower and see if they change their opinion. We asked if we could get another company that could come sooner, they said they wouldn't cover that.

Talk about customer service....... If the first guy wasn't so concerned about his date, he might have fixed it right the first time. Needless to say, I won't be renewing this contract again. I reported them to the BBB, hopefully, I can cancel and sign up with someone more reputable.

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Posted by azRider on 2013-07-16:
if it was such an emergency you could have called a plumber yourself and had one come out. then cancel AHS and get back some of your money.
Posted by CrazyRedHead on 2013-07-16:
Having no hot water is not considered an emergency but no water at all is. You can still heat the water up on the stove and fill up your tub and take a nice bath or take a bird bath out of the sink. What do you think people in the days before indoor plumbing used to do? I know it is inconvenient not to have the luxury of a shower but it is doable if it isn't there. I do agree with az though, you could have called it a plumber and had it fixed right away if it was that important to you.
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Do Not Buy Home Warranty From American Home Shield
Posted by Doraalejandro56 on 07/02/2013
CARROLL, IOWA -- This company took our money for over 10 years and as long as we didn't use their service everything was ok. When our air started to go bad they would just come put freon never repaired to leak. They did this for 4 times when we insisted they repair or look for the leak. It cost us out of pocket over 800.00 then we received a letter that they were canceling our policy.

We contacted AHS and they said every year they look at the policies and if you had a costly repair they cancel you because it isn't to their advantage to continue having you as a customer. I believe this isn't fair when they sell you the policy they strongly advise you to get it so you don't have high repair bills. As long as my home was brand new they took our money now that the home is over 10 yrs, they cancel because they feel you will start using them. AHS IS A RIP OFF DO NOT WASTE YOUR MONEY.

I hope this will help someone I wish someone had told me how they do business we would have put our money in the bank and and not give it to these people.
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Not Honoring Contract
Posted by Vfaaz on 06/04/2013
TENNESSEE -- Home warranty company is not fulfilling their obligation to make repairs or replacement of faulty appliances that are covered by their policy On 5/20/2013 we placed a call to American Home Shield that our air conditioning stopped working. They said Dean family AC will call to set up an appointment which they did on 5/21/2013. The tech came out on 5/22/2013 and informed me we need a new compressor and it would take a week to get one.

Now it is almost two weeks American Home Shield told me today that "they have not made up their mind on what to do and nothing has been ordered." Dean family AC said American Home Shield is not authorizing the replacement parts even after they received the report that the compressor needs to be replaced. I live in Arizona and it was 103 degrees the past few days and over 90 degrees in my home. And it's getting hotter everyday. If they haven't ordered the parts needed to repair my air conditioning which was to take a week to receive I may not have air conditioning for a month!

I pay American Home Shield $737 a year to warranty all my appliances. If something needs to be replaced then replace it. A qualified AC technician came to my home and put a request to order my parts with American Home Shield who is not qualified to make a decision if we need a new unit or not.

This is absolutely ridiculous that they are dragging their feet because they don't want to pay out a large sum. We'll that's too bad. We've had American Home Shield for 3 years and the first time was for our washing machine which turned out to be a plumbing issue and not covered. So I've shelled out $2200 over 3 years and now there is something that is covered they don't want to honor the contract
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Posted by Jeff on 2013-06-04:
Some of these home and auto warranties are some of the most downright scam artists that are around. I still dont understand how these companies are able to stay in business and not be brought up on scamming charges.
Posted by Old Timer on 2013-06-05:
Maybe you need to check out one of the many class action law suites flying around on these clowns. Not much to be made on a class action besides the attorneys getting very rich, but there might be some ideas there for you.

American Home Shield Lawsuit Alleges Improper Denials:

The URL was to long to paste, but you can just put "american home shield lawsuit" in Google to have them come up.

Best of luck against these brainless twits.
Posted by andbran on 2013-06-05:
I dropped AHS when my contract ended. i have never regretted doing that.
Posted by NUNYA DAM BIZNESS on 2013-06-14:
Posted by Tracy Avalos on 2013-09-19:
My AC has been out for 14 days, they lie disconnect order wrong parts and meanwhile it is 97 degrees in my house. I have requested to speek to a supervisor several times and never get a call back. Like everyone else I have had there service for several years never needed AHS till now and they are not doing anything except making excuses as to why my air is not fixed.
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