9 reasons a home warranty claim might be denied

9 reasons a home warranty claim might be denied

A home warranty is beneficial because it covers the damages to various home appliances and systems for a monthly premium. But it is worth noting that the plan is only valid if customers abide by its terms and conditions. Insurance providers may refuse a claim if someone overlooks their rules and guidelines. Knowing why a home warranty claim could be denied can help one be more careful and avoid losses.

Cosmetic damage
A home warranty might cover only those damages to a particular system or appliance that prevent it from functioning. The damage should be such that it renders the product inefficient. For instance, dents and scratches to the casing of an appliance are considered cosmetic damages that do not affect its working. Even blemishes on knobs, shelves, dials, and other accessories fall under this category. Individuals who want to repair cosmetic damages will have to bear the expenses themselves.

Lack of maintenance
Appliances and systems only qualify for home warranty coverage if serviced regularly. The lack of proper maintenance might void the warranty, even if the product is covered in the contract, and one’s claim will be denied. If an individual has maintenance records to show following a denial, they could file an appeal. So, homeowners should keep any documents associated with maintenance as long as the product is being used.

Exceeding the cap
Home warranty providers usually cover an appliance or system up to a specific limit. So, before filing a claim, individuals should check whether they have reached the policy’s cap. If so, they will not receive coverage for the product. The caps differ for each home appliance, but on average, they are about $500 for smaller ones and $50,000 for all the appliances combined per year.

Damage before the coverage was purchased
A home warranty provider will only cover the appliances and systems they assessed while selling the plan. If an appliance already had a problem before the contract’s start date, even if one was not unaware, the repair or replacement might be denied. One can successfully appeal this type of denial if they have maintenance or inspection records to show the item was in good working condition during the inspection.

Poor installation or safety code violations
While sometimes out of one’s control, improper installation is typically a reason for a claim denial. If someone makes a mistake while installing an appliance and it later breaks or gets damaged, the home warranty might deny the claim, even if the person installing it was a licensed professional. They may also refuse the claim if unlicensed or unapproved third-party contractors complete the installation. Claims for systems and appliances that violate safety codes may also be denied.

Irregular wear and tear
A home warranty protects against the expenses associated with regular wear and tear of an appliance or system. If the warranty provider learns that an individual has improperly used the appliance or system, they might deny the claim. This also applies to situations where someone has misused the appliance. For instance, if a washer or dryer breaks because one has overloaded it, the repair might not be covered. One will have to bear the expenses themselves in this situation.

Damage caused by pets
Most companies that issue home warranty might deny a claim if animals cause damage. For instance, if a pet eats the wire of an appliance or other covered electronics in the home, one would not receive any benefits even if they make a claim. The same applies if pests like rats damage the appliance. That’s why one should take measures to protect household systems.

Claims for secondary damage
Companies that issue home warranties cover direct damage to an appliance or system. Individuals might face a denial if they file a claim for secondary damage. For example, if a dishwasher overflows due to a malfunction, it could be covered under the warranty. But if the water ruins the carpet, this is considered secondary damage and would not qualify for compensation.

Going DIY with repairs
If an appliance or system covered under home warranty gets spoiled, one should immediately file a claim, irrespective of how tiny the damage is. While it might seem like a great idea to watch a video tutorial and resolve the issue, going DIY could result in further damage. In this case, the appliance might require massive repairs or a replacement. Now, the warranty claim may also be denied because the homeowner tried to repair it in the first place.

A home warranty also does not cover appliances that are disassembled, uninstalled, or have missing parts. A prime example of this situation is the dishwasher. One might disconnect it and start working on the issue if it stops working. The individual might even leave it disassembled when things get too complicated and they give up. When the homeowner calls the provider to claim a warranty, the company will send a technician to determine if the appliance is still properly installed in the kitchen. If it is not, the technician might report the situation to the company, resulting in a denial of the claim.