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
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.
You are screwed. Home Warranties only protect the builder and the warranty
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.
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
SPAMBLOCK NOTICE! To reply to me, delete the h from apkh.net, if it is
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.
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.
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
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
Job One is to get opinion of exactly what the contract provides, then make
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.......
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
Yes, I'm a HVAC contractor and get to see people get Zipped all the time by
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.
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
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).
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...
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.
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