My home warranty nightmare

Getting reimbursed for $5K furnace not an easy task


By Robert J. Bruss
Inman News


DEAR BOB: About four months ago we bought our first home. It was built around 1930 in a very charming, older neighborhood with great schools for our two kids. Although we probably bought the cheapest home in the first-class school district, we are glad we did. However, we have a big problem with our home warranty company. Our home seller paid for a one-year home warranty policy, which we understand cost her around $450. Within a week or two, the furnace gave off a bad odor. We phoned the home warranty company, which sent a repairman the next day. He said the furnace was in very bad condition and gave us a written warning not to operate it. Because the weather was cold, we had to act quickly. We expected the home warranty company to either fix the furnace or install a new one. But the warranty company denied liability since the furnace was a "pre-existing condition." Because we were desperate for heat, we bought a new furnace, which cost us almost $5,000 installed. The warranty company refuses to pay anything. Do we have any recourse? --Vince R.

DEAR VINCE: Yes. You should sue that home warranty company. Depending on the local Small Claims Court jurisdiction, you can either sue there or in the local court of general jurisdiction for reimbursement.


Home warranty companies are notorious for denying policy coverage by stating a claim was an excluded pre-existing condition, especially for large claims like yours. These warranty companies are the "pros" and homeowners like you are the "amateurs." They know that so they often deny legitimate claims like yours, realizing most homeowners just go away and never sue them.

You should report this matter to your state insurance regulator. Unfortunately, home warranty companies are very loosely regulated in most states so they continue to get away with denying policy coverage falsely based on a "pre-existing condition."

WHERE TO FIND PROFESSIONAL HOME INSPECTORS

DEAR BOB: In the past you mentioned a Web site for professional home inspectors. My mom is moving from her home she has enjoyed for 47 years. We need help getting the home prepped for sale. Where can we find a reliable home inspector? --Elwood H.

DEAR ELWOOD: You and your mom are very wise to obtain a professional home inspection before listing the residence for sale. In addition, you might want to obtain a professional pest control (termite) inspection, unless your mom's house is in Alaska.

I often recommend the Web site of the American Society of Home Inspectors (ASHI) because they have the toughest membership standards for professional inspectors. You will find it at www.ashi.org or by calling 1-800-743-2744 where local ASHI members can be located.

By having a professional home inspection before listing the home for sale, your mother can either have the home defects repaired or she can simply disclose them to prospective buyers so they are fully aware before making a purchase offer.


Go to my web site: www.Lagretrealestate.com