Home Warranty - Company difficult to deal with

Our house is covered under a home warranty (HMS / Homesure, a subsidiary of Cross Country Group). I figured I would never have to use it, but we found a problem with our furnace--the heat exchanger has failed. The warranty people sent a technician to look at the problem, and he found that the furnace needs to be replaced. The home warranty people have agreed to replace the furnace which I am very pleased about. However they have come up with a laundry list of things which "aren't covered" according to them regarding the installation, such as wiring the furnace and connecting it to the duct work. These items are listed in the contract as being covered, but they are claiming that any wiring is a "modification" and an upgrade. They told us that our wiring is not to code, despite the fact that the technician never looked at the wiring, the technician is a plumber and NOT a licensed electrician (checked the state licenses), an electrician told us that nothing is wrong with it, and the warranty company couldn't give any reason why it would need an "upgrade" other than mumbling something about connections. Duct connections are a similar story. The contract even says it includes separate trades (e.g. electrician/plumber/etc) when needed for a replacement, less the deductible.
They eventually presented the option of either replacing with a basic furnace or a cash credit to have it done ourselves. Ok, so far so good!!! If we choose the replacement, they will pay their hired company to do the work (less everything they consider "not covered" which appears to be most of the installation except dropping it off). The hired company is not a dealer of the value furnace manufacturer and is not interested in sizing it properly. The cash option is great, although it is also based on a minimum installation, $1000 total.
The warranty company has been extremely hard to deal with (never call back when they say they will, virtually impossible to speak to a supervisor, don't provide anything regarding the claim or their denials in writing, and I'm not even sure if they would uphold the cash credit if we sent them an invoice copy at their request). I'm concerned because they appear to be avoiding the wording in their own contract regarding what is covered. Does anyone have any suggestions of how to deal with a company like this or getting them to uphold their own contract?
Meanwhile I don't want to operate a furnace with a bad heat exchanger, so I want to get this replaced ASAP and they seem interested in dragging everything out as long as possible.
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You are screwed. Home Warranties only protect the builder and the warranty company.
If you can get a check for $1000 out of them, then you are doing very well.
Most home warranties include a provision where the home owner signs away his right to sue in a court of law. An arbitrator selected by the home warranty company is used to arbitrate disputes. The homeowner often has to pay the $1000 fee to arbitrate, even if they win the case.
Home warranties are worthless crap.
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Oscar_Lives writes:

Judges do not enforce contract terms which put judges out of work.
The law is a third party to every contract.
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Richard J Kinch wrote:

You couldn't be more wrong if you tried. Arbitration is accepted in virtually every jurisdiction. Some courts even require it when the contract doesn't. I haven't seen a case where one party has the right to choose the arbitrator; most commonly, each party chooses one, and the nominees then select a third. Even though you have to pay, usually, half the cost of the arbitration, that is usually cheaper and quicker than going through a court.
To the OP, insurance companies typically offer a lot of bull about why coverage is denied, then make a low-ball offer, high enough that it seems attractive to you, but low enough that they still make money. Its probable that if you go back with a list of items that you say are covered, with a total cost of, say $2000, then offer to settle for $1200, they will take your offer. Better yet, get a list of prices for the items you believe are covered (and don't feel that you are entitled to just the most basic furnace; check the contract for that; if you had a high end furnace, argue that they should replace it with the same level) and find an attorney with teeth and have him do the negotiating for you. You can probably pay the attorney an hourly rate, which is even higher than a plumber, but an attorney skilled in negotiation will get you a much better deal than most people can get for themselves.
I would never rely on the insurance company to provide services; they get the cheapest labor available, and you are stuck with that quality of work.
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William Brown wrote:

In my case, we have an older furnace, so replacing with a basic 80% model would be acceptable under the contract. I have no problem with that, just with their installation costs which they are claiming they do not cover even though the contract says they are. They are claiming all wiring and duct work represents an "upgrade" or "modification." I asked them if it was possible to install a furnace without "upgraded/modified" ducts and wiring, and couldn't get a straight answer.

Right.
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William Brown writes:

Sez you.
Providing for arbitration is not the same as an [unenforceable] provision waiving a right to sue.
If it were possible to waive rights to sue, then nobody would do business otherwise, and we'd be back to the wild west.
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Oscar_Lives wrote:

In this case, the warranty policy was purchased by the seller at closing. They do seem to like to write and solely interpret their contract.

You are correct about the arbitration clause in my case. It says that the "loser" pays for the cost of arbitration. As an attorney friend told me, in an arbitration case it's hard to call a party a "loser" when there is a settlement result.
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Welcome to the world of home warranty! Take the $1000, cash the check, and stop paying the crooks their insurance premiums! Greg
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http://pages.cthome.net/edhome
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The home warranty people have

Been there, done that. I wouldn't trust *anything* they say. If you have a modest priced lawyer you might have him read the contract and see what is and is not covered, from a legal standpoint. When I moved into an older house, I paid something like a 200 buck premium for home warrantee service insurance. In the end, I got about $600 dollars worth of plumbing and valve replacement in return, but not without a lot of sturm und drang. But overall, it was worth buying given the end result, even though I had to supervise the work very closely, as the tradesmen on their list were relatively clueless, read cheap. $1000 may sound attractive to you, but the actual repair could cost thousands if current code disallows your current wiring scheme, and the replacement is more complicated than the insurance inspector claims. . In our county, furnace replacement needs a zoning clearance, and that is where and when they enforce any wiring codes that are not grandfathered. Job One is to get opinion of exactly what the contract provides, then make your stand..... And make sure you are hovering over the guy if you decide to use their furnace guy, and take special note of his comments on the job site, as they may serve you well, down the road.......
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This is Turtle.
Well Home warrenty company are in business to make money and your satisfication is of no interest to them. What every they tell you , you just take it with a grain of salt and move on.
Your not going to win anything unless you take them to court and that become very expencive for you will have to pay your lawyer fees and court cost and most of the time that cost more than the job was to be done.
You can do as you want but if it was me, i would get the $1,000.00 from them [ RIGHT NOW ] and cash the check and make sure the check cleared their bank and then call a respectiable hvac contractor out there and have it done right and pay the difference. I would also ask for a refund of any balance left on the yearly fee to be returned to you. You can't win dealing with professional crooks in these type deals. You should be tickled to death to get a offer of $1,000.00 out of them for most of the time they don't want to pay anything. You better get the $1K while the getting is good or while they are still offering it.
I don't know of any respectiable home warranty company that are interested in doing what the contract says. American Home Shield is the biggest crook of all of them.
Yes, I'm a HVAC contractor and get to see people get Zipped all the time by these crooks.
You better get what you can before they change their mine about the $1K because your not going to win dealing with these crooks.
If you want to discuss it by e-mail my address here is good to send it to me. And No i don't want to do the job , but only discuss it.
TURTLE
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TURTLE wrote:

I hear you loud and clear Turtle. Part of me is upset with them for being weasels because they claimed my wiring was "not up to code" even though they couldn't dream up a creative reason why it might not be. (Actually the wiring/burners/controls had been replaced about 2 years ago--before I purchased the house). Ditto for the ductwork, which they claim isn't covered b/c there is nothing wrong with the ductwork, even though it is listed in the contract since the furnace needs replacing.
The part of me says I should get the check (they won't even issue that until I provide my contractor's bill copy to them) ASAP before they go bankrupt. Of course I would lose my chance to prove my case.

Thanks, Turtle. I do plan to get a reputable HVAC contractor to do the job right, not their plumber. The furnace they wanted to install is a Payne (econo-Carrier).
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Taylor Weaver writes:

Sometimes we just want to believe, but likely they're just stalling. If you provide a bill and ask for a check, they'll have some other excuse, if they're still around at all.
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This is Turtle.
A bought Lesson like this will save you a bunch of money in the future when dealing with companys like this.
TURTLE
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Yes I had similar experience with HMS over the summer regarding my A/C. Their first contractor told me I had an undersized unit, a pre-existing condition that is clearly not covered. I argued with HMS tooth & nail & they finally agreed to send a different contractor for a second opinion. Second contractor found that the compressor failed within 5 minutes of arriving at my house. They tried to stick me with an offbrand unit so I instead requested a "Net Claim Credit". I got a check from HMS a week later for $750. It cost me ~ $1200 out of pocket to have a 3-ton 10 seer unit installed by my certified Lennox guy. I would never suggest to anyone that the $375 HMS warranty is a good idea unless the seller is paying for it at the closing table. Just makes me wonder if the other home warranty companies act the same way about paying claims...

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This is Turtle.
I know of None that does right when you have trouble. They all do right till that time. Now there could be some out there some where that would do right but I haven't seen one yet.
TURTLE
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