Home Warranty & Extended Warranty Companies Accused Of Bad Faith Insurance On Home Warranties
February 17, 2012 Posted in: Mass TortsUnethical and fraudulent practices by companies taking advantage of the disadvantage need to be pursued legally to ensure those financially injured are compensated, national class action product liability attorney Keith T. Belt says
Consumers who are upset about their treatment by home warranty companies, alleging that those companies practice bad faith insurance. Among the companies that have reportedly faced such complaints are American Home Shield, First American Home Buyers, Old Republic Home Protection, Cross Century Home Services, Fidelity National Home Warranty and 2-10 Home Buyers Warranty.
Dan Kaplan and James Baker, as reported by Home Warranty Wiz (11/21/11), allege that Fidelity National Home Warranty sold home warranty plans but wrongfully denied legitimate customer claims on items included in the home warranty plans. Fidelity National Home Warranty “failed to comply with its duty to properly adjust submitted claims under the home warranty plans, resulting in improperly rejected claims and damages.” Dan Kaplan alleges that he made four claims with Fidelity, three of which were not properly adjusted and were improperly denied. His first claim involved a leaky toilet, which a third-party plumber determined was a construction defect and not covered by the warranty. The plumber refused to put the toilet back in place but still charged Kaplan a $50 service fee. A plumber for the developer was then sent out, who determined that the previous plumber was mistaken in his diagnosis of the leak.
Fidelity then sent out another plumber, who put the toilet back, resealed it and also charged a $50 service fee. The toilet was reportedly put back improperly, however, so it continued to leak. Following the incidents with the leaky toilet, Baker alleges he had his claims improperly denied two more times. The plaintiffs allege that Fidelity third-party service providers are trained to deny legitimate claims and reward contractors who deny claims by giving them more calls. Furthermore, they allege that Fidelity refuses to authorize replacement of appliances and increases the number of service calls, which increases the money made from service fees ($50 per visit).
Home warranty companies offer extended warranty service contracts to cover the repair and replacement necessary to keep appliances and other mechanical systems in a home in working order. Often, a retailer such as Best Buy, Wal-Mart, Sears or Home Depot, will offer customers an extended warranty that would provide insurance coverage on their purchase beyond the typical one-year warranty coverage that the manufacturer (e.g., Amana, Maytag, Whirlpool, Viking, Miele, Kenmore) would provide. The extended warranty is not managed by the retailer—it’s simply offered by the retailer at the time of purchase. The companies that provide extended warranty contracts are called third party administrators (TPA), some of which are listed below.
Systems and appliances that may be covered by a home warranty include heating systems, central air conditioners, garbage disposals, ovens, dishwashers and refrigerators. Optional coverage can often be purchased on pools, spas and other devices. Home warranties are meant to cover damage caused by normal wear and tear, not damage that involves pre-existing conditions, owner’s negligence or extraordinary use. Furthermore, home warranties are not meant to overlap with a manufacturer’s warranty or homeowner’s insurance—that’s why they are often referred to as extended warranties—they “extend” beyond the warranty coverage provided initially by the manufacturer.
Home warranty insurance or extended warranty contracts are provided by companies such as American Home Shield, First American Home Buyers, Old Republic Home Protection, Cross Century Home Services, Fidelity National Home Warranty and 2-10 Home Buyers Warranty.
About Belt Law Firm, P.C.
Belt Law Firm, P.C., has more than 70 years of combined experience, and has the resources and experience to take on class action lawsuits of any size and against any opponent. In the past, our class action lawyers have participated in several large-scale class and mass joiner actions and have secured millions of dollars for our clients. Class-action lawsuits are an efficient and calculated way to take on large, well-represented organizations, and also to help the maximum number of people. Class action lawsuits offer a number of advantages because they are able to aggregate a large number of what are often smaller individualized claims into one class action lawsuit. Our class action attorneys’ main mission is to bring powerful representation and justice to the individual or small business. In the process, class actions provide the necessary impetus to change laws for the better and to help thousands of people who have been injured, oppressed or have suffered injustice. We put our reputation on the line in every case.
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