Problem Solvers warning: how to deal with home warranty contracts

Problem Solvers

MEMPHIS, Tenn. — For 18 years, Clarence Phillips paid for a home warranty policy on his Mud Island home. He used the warranty to get a few things replaced over the years, mostly related to the heating system.

The warranty used to be with Sears and more recently got taken over by Cinch Home Services, he said.

Most recently, his kitchen sink faucet gave out.

“I pushed it over to this side, it snapped right off,” he said, showing the place where it broke.

He wasn’t that worried; on his policy paperwork, the “whole house plan” states it covers faucets.

He called Cinch and paid the $100 service fee. They had a plumber come out to assess the damage.

On the assessment, the plumber from A Blessing Plumbing Co. wrote, “Customer broke the spray part of the sprayer hose. Plumber will have to order part.”

He thought that’s all they’d need to approve the replacement, which would cost less than $400 to buy and install. But that’s not how it happened.

“Once he turned in his findings then immediately I got an email in the next day or so saying my claim had been denied,” Phillips said.

In the email, Cinch officials said they denied coverage because of “misuse and abuse.” The letter said the company would only cover mechanical failures attributable to “ordinary wear and tear.”

Phillips felt like what happened was part of ordinary wear and tear.

So he called the WREG Problem Solvers and we called the home warranty company.

A representative for the company responded with an email, saying “his faucet handle had been accidentally broken off, an issue that does not fall under ‘ordinary wear and tear.'”  

The Problem Solvers responded stating, “The faucet is nearly 20 years old. Is it possible it could accidentally break off due to ordinary wear and tear?”

Cinch didn’t think so and responded by stating, “We stand behind our management of this claim.”

“If you read that contract, it’s not a wall-to-wall coverage for items in your home. That’s a common misunderstanding,” said Nancy Crawford with the Better Business Bureau of the Mid-South.

According to Crawford, they get a lot of complaints about home warranty companies, issues like this regarding tricky wording in the contract.

It appears government regulators get a lot of complaints too, according to records obtained in Tennessee and Florida, the state where Cinch Home Services is based. Cinch had more than a dozen complaints filed so far this year by customers across the country, like a family in Delaware saying Cinch “committed fraud” by going back on their promise to cover a new heat pump.

The company responded by telling the Problem Solvers COVID-19 has impacted their supply chain. They also said they’re seeing more claims from people being home: “dynamics like this outside of our control have created challenges and delays.”

“It’s like any insurance. It’s a numbers game,” Crawford said.

Here’s what she means: Phillips pays $70 a month, which adds up to $840 a year and more than $15,000 over 18 years.

He also paid a $100 service fee, which is non-refundable, even though they rejected Phillips’ claim.

“They have deductibles, you agree to pay when you agree to be their customer. You have to look at all those things on the front end and decide, ‘Is that what I wanna do?'” Crawford said.

Phillips called it all sneaky and expressed skepticism.

In cases like this, Crawford recommends filing a complaint with your state consumer affairs office and with the BBB. She said home warranty companies are often responsive.

“We are able to say to the home warranty company, ‘Would you look at this again? The customer is saying this is a matter of regular, normal wear and tear,'” she said.

That’s part of why she said Cinch has an A- rating; they do answer complaints.

Phillips hopes they respond to his next, but he still has this warning for others.

“Stay away,” he said.

He said he’s already cancelled his policy.

Experts say home warranty policies are best suited for older homes. They also recommend creating an emergency fund by saving a certain amount each month, rather than paying for a home warranty.

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