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Home Warranties: Should I buy one and what should I do if a claim is denied?

Home Warranty:

What is a home warranty?

There are numerous companies that sell different products that are called home warranties. However, as a general matter these warrantees are for appliances that are in your house. These warranties are for your dishwashers, washing machines, HVAC systems, air conditioning, heating, toasters, refrigerators, coffee machines, garbage disposals. There are numerous types of appliances and or HVAC systems in or around the home that might be covered by these home warranties.

The general concept is that when these appliances are purchased, they have, as a general matter, a warranty sold with them. However, over time the warranties expire as these appliances are used in the homes for many years. These appliances age and break down and this type of home warranty warranty provides for repair or replacement. It sounds simple. You have old appliances and HVAC system in the home, and they break down. These systems are expensive to replace. There are home warranty companies that sell you warranty products that help you replace these products when they break down. There are home warranty companies that sell you warranty products that help you repair these products when they break down.
It sounds reasonable to buy a warranty which would cover the circumstance of these home appliances, in New Jersey or anywhere, breaking down or wearing out.

Home appliances are expensive to replace, and they are needed in daily life. However, as usual, the devil is in the details. There are numerous factors which need to be considered in determining if this “warranty” for these products needs to be purchased. The first factor is the price. How much is being charged by the home warranty company who is issuing home warranty for these appliances? This then needs to be compared to the replacement cost of the appliances or the HVAC system in your home. You then make a decision based on how much the home warranty will cost and how much it costs to fix or replace your appliances?

Terms and conditions of a home warranty

I strongly suggest that you read all of the terms and conditions of the home warranty which you are purchasing. There are numerous disclaimers and exclusions related to the sale of this home warranty. Certain items might be excluded. There might be time limitations on making claims. There might be use restrictions. There might be exclusions for pre-existing conditions, rust or improper use.

A review of the terms and conditions should be the major and determinative factor as to whether or not you purchase one of these warranty products. Are there too many exclusions? Are all the products covered? You need to prove or conduct maintenance on any of the appliances?  To make a fully informed decision need to have answers to many of these questions before you purchase a home warranty to help you fix or repair home appliances.
Complaints with home warranty companies that sell product to pay for fixing or repair of home appliances

If you search the Internet for complaints with home warranty companies, I suggest that the results will show you the nature and extent of the issues and or problems the purchase of these products are going to experience.  By way of example here’s a link to a BBB complaint page about a specific company:

by reviewing these complaints, you can see the nature and extent of the problems that people will have when they make claims to home warranty companies about their appliances or HVAC system. This home warranty company for which these complaints are listed happens to be located in Illinois.

The following is a link to an article on Angie’s list entitled “Why Home warranties Are No Guarantee”:  I strongly suggest you read this entire article for their position on home warranty companies.
Obviously, there are home warranty companies that might provide excellent service and honor their warranty product. However, there also could be warranty companies that do not provide excellent service and customers make numerous complaints. Plus, please remember when you are reviewing Internet complaint sites and Internet review sites the normal disclaimers should be carefully reviewed by you in determining whether or not a company is good or bad. Everything on the Internet is not necessarily truthful.

Lawsuits against home warranty companies- Do I have a right to sue the home warranty company?

If your experience is, in your opinion, such that the home warranty company has failed to abide by their agreement, has failed to honor the warranty or has made false promises to you the court system is open to remedy your complaints.
There are a number of claims or legal theories that can be filed against the home warranty company against whom you have a complaint. These claims are going to be small as the price of the warranties are usually under $1,000 and you might be able to go to small claims, certainly in New Jersey. However, when you are dealing with HVAC systems the size of the claims makes it larger necessitating the hiring of a lawyer for replacement and/or repair costs the you claim under your home warranty product

Consumer fraud claims against the home warranty company: 

Can I sue my home warranty company?

If you feel that the home warranty company lied to you in any way or engaged in a deceptive business practice in the performing of their service on the warranty contract that you purchased you could file a lawsuit for consumer fraud. In New Jersey the New Jersey Consumer Fraud Act is very strong and provides consumers with excellent remedies if they have been subject to deceptive business practices. By way of example, a potential claim could be that the individual on the telephone lied to about the terms and conditions. You could claim that the salesman, if there were one, lied to about the terms and conditions. You could claim that the defendant does not want to spend the money on the repairs and made up a fake reason to deny the claim.  These would be several examples of claims that you could make under The New Jersey Consumer Fraud Act.

The New Jersey Consumer Fraud Act and claims filed thereunder provide for triple damages attorney’s fees and costs of the litigation. As I previously stated New Jersey has some of the strongest and most powerful remedial consumer legislation in the country. By way of example, if the defendant lied to with regard to a denial of the claim and it costs you money to fix it could receive any ascertainable loss tripled plus attorney’s fees.

Class Actions and a home warranty

You could file a class action as another option on a claim against a home warranty company. The concept of class action is that you as one individual could represent or act as a fiduciary (representative) for many other individuals who have had a substantially similar experience and have been similarly damaged. The concept behind class actions is that it is more efficient to aggregate, put together or litigate numerous small claims in one lawsuit. You might have heard the term consumer class action or consumer litigation.

Putting together a lawsuit or claim against a home warranty company

Before you consider litigation against home warranty company you need to put the following items together so that you can included as part of your claim and or complaint that you might file. If you are considering hiring a lawyer, you are going to need all of this information and potentially more information.

1.    A copy of the entire warranty contract
2.    A copy of the terms and conditions of the warranty contract
3.    Any written or emailed communications upon which you might have relied when purchasing the home warranty contract
4.    Proof of purchase of any home warranty, if this is available
5.    Proof of purchase of any appliance for which you are making a claim, if available
6.    Proof of any maintenance for any appliance which is in dispute, if available
7.    Any email communications with the warranty company regarding any claims
8.    Photographs of any appliance for which he made a claim
9.    Photographs of any HVAC system for which you made a claim
10.    Any recorded communications with the warranty company which you might have in the process of filing or making a claim
11.    Website reviews pertaining to any warranty company with which you might have a claim
12.    Any communication from any state agency or government pertaining to any warranty company with whom you have a dispute
These are very general categories and many of these items might not be available especially if you purchased the home with the appliances or HVAC system already installed