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Legal Advice please.....


codeorama

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Ok, I'm in a very annoying situation.

When my wife and I purchased our home a year and a half ago, we got a home warranty with it. At the end of the first year, we decided to renew it, and agreed to pay the terms in 3 payments that would be charged to our Visa card. They charged the first payment with out problem. My wife unknowingly closed that particular Visa account because we rarely used it and the second scheduled payment was not able to go through... duh... (no my wife's not blonde)

They sent us a letter telling us the payment didn't go through and that we could not file a claim until payment was received.

Low and behold, our a/c went out. We called and specifically said to them, the last payment didn't go through, and we have a problem, is it too late to pay the balance? We were told no, not too late, and they took our Am/Ex card number. They said they would bill one payment of 100 dollars this month, and 100 dollars next month. We waited about an hour and we called back, I told the man what was going on (being honest) and asked if the payment had been recieved and he said yes, and I asked if it was ok to file a claim, he said yes. We filed the claim. Contractor comes out, a/c needs replacing....

The home warranty company calls me today and says that since we filed the claim, they have to bill the entire 200 dollars before they can fill the claim, we said fine, no problem.

The home warranty company calls back again saying they will not honor the claim that our service had lapsed.

I spoke to a supervisor and I have documentation of each step we went through and who we spoke to. My opinion is that they know they are obligated to cover, but are not going to figuring it is more trouble to "me" than it's worth.

I am still waiting for a call from the next level supervisor.

The facts are: 1. We were honest that we had a claim and weren't sure that our warranty was still good, they actually called us back to say it was and take our payment.

2. They took our payment an hour before I made the claim, and when I made the claim, again, I was honest and explained what was going on and asked if the payment had gone through.

3. They called us back and asked permission to bill 2 payments rather than just one.

Their entire basis for denial is that our account was not paid in full, yet THEY called me and got permission to bill my payment in full for the sole purpose of processing the claim.

What are my legal Options here... does anyone have advice?

PS... If you took the time to read this ... thank you.

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code, I hate to tell you this, but you are out of luck on this one. Regardless of what you were told, Im sure the contract states something very specific about it.

Furthermore, these home warranty deals are notorious in their refusal to pay. Im suprised they included an AC unit to begin with.

I would not stop pursuing it though. Write letters to the company and mail them certified so you have proof they got them giving a specific time frame to resolve. When they dont respond or respond negatively, take it to the consumer affairs division of your state and ultimately the AGs office. Cause a huge scene by writing your congressman and Senators in both the Fed and State. Be persistent and a total pain in their side. Eventually they may relent just to make you go away.

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I am figuring that I'm going to have to just pay for my a/c replacement out of pocket for now, but I'm nearly positive that they are obligated based on the contract and what has transpired. The main questions are:

What is my best approach when talking to the next supervisor to convince him that I'm going to win

and/or

if and when he says no, is small claims court my next step?

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Originally posted by Kilmer17

Well then what grounds are they denying it?

Because he said so... seriously, the guy has no answers, he says the claim was made before payment, I gave him the name of the girl who called us and the time and the AM EX event number documenting the payment, their records show that my call came in 1 hour later, after the info was given to them.

He has no other explanation, it was sad.

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That's par for the course. The way those companies do business is to flat out deny 99 percent of all claims upfront. They figure a portion of people wont bother to fight even if it's legit. YOu have to be persistant.

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All I know is that you (warranty company) has to be very careful with expressed or implied warranties. When you were told it was covered that is an implied warranty. I would consult with a lawyer

that specializes in warranties. At least in car business, you can't

ignore a warranty.

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Originally posted by riggins44

All I know is that you (warranty company) has to be very careful with expressed or implied warranties. When you were told it was covered that is an implied warranty. I would consult with a lawyer

that specializes in warranties. At least in car business, you can't

ignore a warranty.

My dad used to be a realtor and said that he knows for a fact that we are covered, the contract was never cancelled and (he says) by law, once we made the first payment, we are covered. In the contract, it specifies that claims will not be filled until payment in full is received, DUH... that's why they called me to authorize them to charge my card for the full amount.

Just plain crazy.

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Just an update, the highest supervisor available changed the story completely and said that "damage incurred during the lapse in coverage wouldn't be covered". Nowhere on the contract does it say that and for that matter, if anyone had a lapse of even a day, they could claim that nothing was covered.

Scam....

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I'm not an expert in this particular arena, however if the company took your money, there's no way they can deny you coverage, period. There's no other premise for them to accept your money, so they're stuck.

Continue to handle it civilly, however be firm with them. Tell them that if they don't agree to pay teh contractor for his work that you'll pay him and then seek reimbursement - plus interest - in small claims court. Get your supporting documentation from Amex that demonstrates they charged you. You should win this one.

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Redman, thanks, we are doing exactly as you say, it makes me feel better to know that you think that's the correct thing to do. My dad's not a lawyer, but he said the same thing.

Tommy, it's not a new house, but our A/C compressor which is 7 years old died. We are basically going to have to pay for a new one and as redman said, file a claim against the company.

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It sounds like the "lapse of coverage" is going to get you since it did lapse since payment was never able to be taken from that card. I know it's not the right thing for them to do but I don't think it would be worth your while to file claim in small claims court since I'm sure you would lose due to the lapse of coverage issue. As I said it's not the ethical thing for the warranty company to do but sounds like they are on sound legal ground. You would only waste your money pursuing this in small claims court in my opinon. Try being nice and keep on the issue with them. You never know and if your nice about it they just might pay 1/2 or the whole thing. GOOD LUCK!!

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Centex isn't that big on the east coast. They are the biggest or were the biggest in the country last time I checked the top 10.

Code, Most A/C manufacturers warrant there compressoer and condensor units for 5 years as well as most major parts. You pay the labor. Most builders cover everything the first 1-2 years. There is a loop hole to your situation. Check to see what the statue of repose is in your state. If the A/C compresor died due to faulty instalation or you can prove the builder did something wrong your home is covered by the builders insurance policy thru the statue of repose.

Did you have freon/ r-22 leaks? Did you have to get the unit charged a few times? Is there alot of rust in the condensate pan? If you can find a reason that the unit had problems you can go that route.

This is an industry secret by the way. If you look at all the literature and all the fine print we give out to homeowners in there closing docs and there info packs you will never see this anywhere. We all state 10 yr. structural but never talk about latent product defects or poor quality workmanship. Most states have a 10 year statue.

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