What to Do When Your Home Warranty Claim Is Denied

How to handle a denied home warranty claim

Every home warranty company should have an appeal process if your claim is denied. However, it is important to note that the company may ask you to show proof of installation, maintenance records and purchase receipts.

If your home warranty claim is denied, follow these steps to try to reverse the decision or find alternate coverage:

1. Review your denial letter

Read the denial letter carefully to understand why your claim was rejected. Compare the reason with your warranty contract to verify if the denial aligns with the contract terms.

2. Gather documentation

Collect all relevant documents, including proof of appliance or system installation, maintenance records, purchase receipts and any communication with the warranty provider.

3. File an appeal

Most home warranty companies offer an appeals process. Use the documentation you've gathered to dispute the denial. Be sure to meet any deadlines listed in your policy.

4. Escalate the issue

If your appeal is denied, you can escalate the issue by:

• Contacting your state attorney general's office
• Filing a complaint with the Better Business Bureau
• Consulting with a lawyer or small claims court

Being informed and persistent can increase your chances of getting coverage or finding alternative solutions when your home warranty claim is denied.

If you find there is no recourse with your home warranty company, there are some other ways you can receive coverage. Many systems and appliances come with a manufacturer's warranty, so if your system or appliance is newer, it might be worth double-checking your policy.

Homeowners and builders insurance may also be able to help. Builders insurance helps cover the systems and appliances installed during the house's construction. However, homeowners insurance only covers damages directly caused by a natural disaster.

What are some reasons your claim may be denied?

Home warranty plans usually have many limitations and exclusions that can lead to a claim denial. Most home warranties typically only cover total breakdowns due to normal wear and tear and exclude things such as weather damage or cosmetic damage.

Here are some exclusions that may lead to claim denial:

• Damage is cosmetic only
• Events outside of human control (such as natural disasters)
• Preexisting conditions
• Improper maintenance or installation
• Uncommon or high-end appliances
• Missing parts
• Pet, pest or animal damage
• Misuse or abuse
• Consequential or secondary damages
• Commercial products
• Structural components
• Rust-out or corrosion

How to avoid home warranty claim denials

Understanding how to prevent claim denials is just as important as knowing how to appeal them. Here are proactive steps homeowners can take to avoid home warranty claim rejections:

• Read and understand your contract: Before you need to use your home warranty, read through your contract carefully. Make sure you know exactly what’s covered, what isn’t and any coverage limits or exclusions.
• Perform regular maintenance: Most home warranty companies require proof that your systems and appliances have been properly maintained. Follow manufacturer-recommended maintenance schedules and keep records of all maintenance work.
• Use licensed professionals for installations and repairs: Improper installation or DIY fixes can void coverage. Always use certified professionals, and keep documentation of the service.
• Report issues as soon as they occur: Delaying a claim can complicate the process or result in denial. File a claim promptly after discovering a problem.
• Avoid unauthorized repairs: Don’t try to fix the issue before filing a claim or without approval from the warranty company. This could lead to a denial on the basis of improper repair procedures.
• Communicate clearly with your provider: Document all conversations, approvals and service requests. Keeping a record of your interactions can help support your case if a dispute arises.

Taking these steps ahead of time can improve the likelihood that your claim will be approved when the time comes.

What do home warranties usually cover?

Home warranties usually cover repairs and replacements on major appliances and systems, such as refrigerators, ovens, built-in microwaves, plumbing, electrical, heating and cooling. However, most home warranty companies offer plans depending on the customer's needs.

For example, many companies have an appliance plan, a systems plan and a total systems and appliance plan that covers everything in the first two. Home warranties also typically have add-on options, so you can add an appliance or system to your plan for an additional fee if it isn’t offered.

Here are some items commonly included in a home warranty plan:

• Electrical work
• Plumbing systems
• Heating, cooling and HVAC systems
• Central vacuum systems
• Sump pumps
• Refrigerators
• Ovens
• Built-in microwaves
• Dishwashers
• Garbage disposals
• Washers and dryers
• Garage door openers
• Ceiling fans
• Dishwashers
• Attic and exhaust fans

Bottom line

Home warranty plans typically cover a variety of systems and appliances. However, understanding the fine print of your contract is important to avoid claim denial. If your claim is denied, file an appeal or check to see if you are covered by a manufacturer's warranty, homeowners insurance or builders insurance.