Why Was My Home Warranty Claim Denied?
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Home warranties are designed to protect you from expensive, out-of-pocket costs if a major home system or appliance breaks down from wear-and-tear damage. However, home warranties don’t cover all situations or types of damage. Unfortunately, home warranty owners may feel like they’ve been taken advantage of when their claims are denied.
If your home warranty provider rejects your claim, it’s not a lost cause. We’ll explain some common reasons why a home warranty claim may be denied and outline steps you can take to file an appeal. We highly recommend ensuring you know what is and isn’t covered before purchasing a home warranty.
Reasons Why Your Home Warranty Claim May Be Denied
A home warranty is denied for many reasons, often because the type of damage or specific part of the appliance or system is not covered under the contract. To know why your home warranty provider might deny certain claims, read the terms and conditions outlined in your contract to learn exactly which appliances and systems your plan protects, as a claim cannot be filed for a part or type of damage that isn’t under coverage.
These are four of the most common reasons home warranty claims are denied:
1. Lack of Maintenance
Systems and appliances within your home should be serviced on a regular basis, as it’s necessary to keep them in working order to keep your coverage. If proper maintenance hasn’t been performed on an appliance or system covered in your contract, your claim could be denied. If you have maintenance records to show this isn’t the problem, you will have grounds for appeal, so be sure to keep important maintenance and repair paperwork.
2. Improper Installation or Safety Code Violations
Though it’s sometimes out of your control, improper installation can be the cause of a denied claim. If your broken system or appliance is attributed to mistakes made by the person who installed it, even if that person is a licensed professional, your home warranty company has the right to refuse your claim. Claims on systems and appliances that violate safety codes can also be denied.
You could be denied if unapproved or unlicensed third-party contractors complete your installations or repairs. This includes homeowners making their own repairs or modifications.
3. Unusual Wear and Tear
Warranty coverage is designed to protect you from the expensive costs associated with regular wear and tear on your appliances and systems. If your provider determines that you’ve improperly used your appliance or system, your claim could be denied. This also applies to events considered misuse of the covered item. For example, if a washer or dryer breaks because you’ve been overloading it, the repair may not be covered.
4. Coverage Cap Exceeded
Most home warranty providers have coverage caps on certain appliances and systems that limit the amount they pay for a repair or replacement. Before filing a claim, make sure that you haven’t reached your coverage limit on the system or appliance in question during the current contract term.
5. Cosmetic Damage
Even if your home warranty covers a particular system or appliance, all parts of that system or appliance may not qualify for repairs. Scratches and dents to an appliance’s casing are considered cosmetic damage, and so are missing or damaged knobs, dials, shelves, and other accessories. Typically, the part must be considered necessary to the operation of the covered system or appliance to qualify for coverage.
6. Pre-Existing Damage
In February 2024, our team conducted a survey of 1,000 home warranty customers. Of the 20 who had claims denied, 50% cited the reason as pre-existing damage to a covered system or appliance. If the problem began before the start date of your contract, even if you weren’t aware of it, the repairs or replacement will not be covered. You may be able to successfully appeal this kind of denial if you have maintenance or inspection records to show the item was in good working condition at the time of inspection.
What Do I Do If A Warranty Claim Is Denied?
If your warranty claim gets denied, contact the company directly to request any necessary documentation needed to file an appeal. In the meantime, you’ll likely have to pay for the repairs yourself, but you may be reimbursed after the appeal process.
6 Steps to Take If Your Home Warranty Claim Is Denied
- Verify that your contract covers the repairs in question. This information should be detailed in the terms and conditions of your contract.
- Contact your home warranty provider and request the necessary documents to go through with an appeal. Make sure that you have your contract on hand, as you may need policy information while talking with a representative.
- If a service technician came out to assess the issue, request the inspection report. If you can, try to get a third-party inspection of the appliance or system in question. A second opinion can be valuable in overturning the denied claim.
- Stay on top of your provider’s appeal process and be prepared to provide any requested information.
- If your company is unresponsive to your claim, try filing a customer complaint with the Better Business Bureau or on other consumer review website. Many companies want to stay in good standings with these review sites and may be more likely to respond to you.
- If all else fails and you are certain the repair falls under the terms of your contract, it may be a good idea to file a complaint in a small claims court or large claims court, depending on the size of your claim.
Remember—to refute a denied claim, you must ensure that your original claim contains items and types of damage covered under your contract.
Our Conclusion
The best way to prevent denied claims is to read your contract very carefully before signing it. Daniel Cabrera, founder of Sell My House Fast, says, “Homeowners should understand what specific items, parts, or situations the company excludes from the warranty.” This will prevent unpleasant surprises when filing claims.
If your claim is still denied after taking the appropriate steps and ensuring that the damage is covered under contract, your only recourse is to file a complaint with your state’s attorney general or with the Federal Trade Commission (FTC), the nation’s consumer protection agency. Again, your best protection is to fully understand the terms of the warranty before you purchase it.
FAQs About Why Home Warranty Claims Are Denied
How does the claims process work?
When you file a home warranty claim, a service technician should arrive to assess the problem within 48 hours. Some companies guarantee this response time, while others have longer response windows and may address the issue within 72 hours.
Home warranty companies such as American Home Shield and Choice Home Warranty guarantee a response time of 48 hours after making a service request. We suggest going with a plan from one of these companies so your damaged appliance or system is repaired in a timely manner. Check out our review of Choice Home Warranty and our detailed review of American Home Shield to learn more about these providers.
What is a coverage cap?
A coverage cap, or coverage limit, is how much a home warranty provider is willing to pay for the repair or replacement of a particular appliance or system. Once the coverage limit is reached, your claim will be denied and you will have to pay for the service out-of-pocket.
How do I buy a home warranty?
When looking to purchase a home warranty, determine exactly which appliances and systems you need covered. With this information, you can review providers that offer plans with the coverage you need, allowing you to compare costs and coverage limits.
Once you select a home warranty provider, carefully read over your contract’s terms and conditions so you’re familiar with your coverage and its claims process.
Our Rating Methodology
We back up our home warranty ratings and recommendations with a detailed rating methodology to objectively score each provider. We conduct research by speaking with company representatives, requesting quotes, analyzing sample contracts from each company, and conducting focus groups and consumer surveys. We then score each provider against our review standards for coverage, cost, trustworthiness, plan transparency, customer support, and flexibility to arrive at a final score on a 5-point rating scale.
To share feedback or ask a question about this article, send a note to our Reviews Team at reviews@thisoldhousereviews.com.