My Home Warranty Nightmare
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September 8, 2006 | By: 
Comments (1)In 2004, I purchased a home built in 1989, and over the past two years I have learned some very hard lessons about what a home warranty policy actually covers when things go wrong. I started out with Fidelity Home Warranty and after a year of getting claims denied, I changed to American Home Shield, which turned out to be even worse.
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Most recently, I realized my air conditioner was leaking water in my house. The first person who was sent by American Home Shield claimed the leak was from the air conditioning being overused. I complained to the company that I was 7 months pregnant and needed to be able to use my air conditioning without it freezing over, and that I was concerned that the leak would lead to mold in the house. It took three calls for them to send a new company out, and it was discovered that a pipe off the air conditioning had cracked. A few days later, the company that discovered the crack came to fix the problem, and when the wall was opened to get to the pipe, it was discovered that the true cause of the problem was a nail in the pipe. The nail had been hammered through the drywall into the pipe when the house was built 17 years ago and the suspicion is that it rusted over time. At that point, American Home Shield claimed it was a pre-existing condition and would not cover the damage.
I thought that a home warranty was supposed to offer protection for those unexpected little surprises that might come up when you buy a resale home, but instead there has always been some loophole or reason why the claim is not covered. Prior to this, my previous requests for help resulted in frustration, including:
- Right after moving into my home, I was told that my constantly clogged toilets were not covered because they happened to be the first generation low-flow toilets and they were never known to work very well.- With each season change since moving into my house, I have had to call to repair my air conditioner in the summer and heater in the winter. They’ve always done the minimum necessary to get it hobbling along again, but it has clearly outlived its lifespan and doesn’t actually heat or cool the house efficiently (however, the increase in our electricity bills in the summer would make you think something was being cooled).
- When our pool filter was not doing its job and our pool was in a constant state of green sludge, we learned that the previous owners who had installed the pool chose to cut corners and install a pool filter that was underpowered for the size pool that was installed. However, the filter replacement was not covered by the home warranty company because they are not responsible for improper installations of underpowered equipment.
I do realize that a home warranty company would soon go out of business if every claim resulted in a replaced item, particularly in the case of large-expense items such as air conditioning systems. I also take responsibility for not reading the “fine print” closely and not having the proper expectations when I first bought my house and made the first few claims. However, with each denied claim, I felt more and more the victim of a scam.
I wonder why home warranties companies are not required to at least factor in the reasonable expected lifespan of an item before refusing to replace it. In addition, I don’t know if a person buying a resale home can ever truly feel protected because most things that might be missed by a home inspection and uncovered after the sale will end up being classified as a pre-existing condition and not covered. How was the man who inspected my home supposed to be able to tell that somewhere inside the walls, a drywall nail was embedded in a water pipe?
After this latest experience, I got fed up and canceled my policy. I was completely baffled to find that after paying $610 for a one-year policy (not to mention the $55 service call co-pay for each complaint), that my pro-rated refund for what amounted to less than one month's coverage was only $356.16. How can that even be possible? Needless to say, my experiences with home warranty companies have left a very bad taste in my mouth and I hope that by sharing my story I will help someone not make the same costly mistakes I have made.
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Comments (1)
Alicia Foley
September 19, 2006 12:38
I also had a similar experience with my home warranty. I am a single mother of three children. I scrimped and saved for years to be able to buy a home and was so happy to have bought my first house at 39 years of age. The children and I moved into our new home (it was built in 1957) in November 1998. Shortly after moving into my home the toilet quit working. The warranty contractor came out, said the toilet was irrepairable and replaced the toilet. The next day, we had a flood in the home due to the contractor not tightening the connections correctly on the toilet and the toilet leaking all day and night behind the walls which then seeped out in the lowest point of the house. When I called the contractor, they told me that I had to call the warranty company again for another "call-out." I called the warranty company and was told that they were not responsible for the work done by the contractor (so who is responsible!?) and would not issue another call-out. I had to pay, out of my own pocket, for a flood clean-up and dry-out as well as another plumber to come out and correct what the first contractor did not do properly. The warranty company also did not pay for the front door that cracked completely in half from top to bottom due to west sun exposure, the gas line leak and replacement, the water main leak and subsequent replacement, the roof re-coating after a rain exposed several leaks, the pump for the pool that was also undersized for the size of the pool and not cleaning efficiently, and all the drains clogging up completely less than a month after I moved in. I felt like I had been taken for a ride by the warranty company, the home inspector and my real estate agent. The warranty company didn't understand why I didn't want to renew the policy for another year when the next years premium was due and wanted me to write a letter of cancellation. I told them that my not paying the premium should be notice enough. I feel it is a scam industry! I had wanted the warranty because I thought that it would help protect me from unforeseen repairs but it ended up costing me MORE money because it was $75 for each call-out, on top of the policy premium, on top of the charge for a reliable contractor to do what the warranty contractors wouldn't.