News & Views on Real Estate


How to beat home warranty companies at their own game

I have discovered how aggrieved homeowners can turn the tables on home warranty companies and beat them at their own game. Please share this with everyone you know.

I'm an attorney and after having a problem with my home warranty company, American Home Shield, I decided to investigate whether other homeowners had experienced the same or a similar problem. What I found were web sites devoted to consumer complaints on which numerous homeowners had recounted incidents of fraud, deception, and rip-offs by their home warranty company. I also found a blog written by a former American Home Shield employee and another written by a former plumber for a home warranty company. Both recounted situations that would not pass the "smell test" in a court of law.

I also investigated lawsuits that had been filed against American Home Shield in Georgia, which is where I live. I found about 15 cases. The majority of cases had been filed in small claims court. As I reviewed the cases, I discovered that none of the cases had been litigated. In every instance, the case had been settled to the Plaintiff's satisfaction although the details of each settlement were not part of the case file. With the knowledge that all cases had been settled to the homeowners' satisfaction, I realized that American Home Shield would settle with an aggrieved homeowner before allowing a case to go to trial. My conclusion is that the only thing aggrieved homeowners need to do to beat home warranty companies at their own game is to file suit. The last thing American Home Shield wants to do is litigate a homeowner's claim and the reasons are obvious to me.

The most obvious reason American Home Shield would not want to litigate a claim is that in most instances, the cost to American Home Shield to settle a claim would be less than the cost to litigate. The average amount of a claim in the cases I found was $3,800.00. Two were for less than $1,000.00 and only one was for more than $10,000.00. I'm sure far more than the 15 homeowners who have filed lawsuits in Georgia have had their claims denied. American Home Shield wins when a claim is denied and the homeowner does not sue, which is exactly what American Home Shield is counting on homeowners not doing.

Another reason American Home Shield does not want to litigate is because the company does not want to have to defend its craftily drafted contract or its questionable business practices, which is exactly what it would have to do if a case went to trial. American Home Shield also does not want such information to become public knowledge, which is also likely to happen. Additionally, a judge or a jury would also be hard pressed to return a verdict favorable to a company that engages in questionable business practices.


The final reason American Home Shield does not want to litigate is because a lawsuit actually places American Home Shield in a precarious situation. American Home Shield would have a difficult time defending any claim by a homeowner because the company has no first hand knowledge about the claim; it would need the testimony of the service contractor who, for its own reasons, may be less than eager to testify. The only knowledge American Home Shield has is what the company has been told by the service contractor. And any testimony from American Home Shield about what it was told by the service contractor is hearsay and not admissible in court.

To defend a claim, American Home Shield would need to subpoena the service contractor who actually made the diagnosis to testify about the claim. If the homeowner has done his/her homework, he/she would subpoena witnesses who could dispute the witnesses for American Home Shield. The homeowner should subpoena one or more service companies who had been called either for a second opinion or to make the actual repairs to dispute the testimony of the American Home Shield service contractor. The homeowner might also consider locating one or more other aggrieved homeowners to testify about their problem with American Home Shield. Another good witnesses for the homeowner to subpoena would be a former service contractor for the home warranty company or a former employee of a service contractor.

Since American Home Shield has at least three significant reasons why it does not want to litigate, the best and easiest way an aggrieved homeowner can beat American Home Shield at their own game (and most likely any other home warranty company) is to file suit. The one thing for an aggrieved homeowner to keep in mind is that if he/she does not sue, the home warranty company will win. But if he/she sues, the homeowner will most likely win. And that is how an aggrieved homeowner can beat American Home Shield at their own game.

My advice to aggrieved homeowners is not to stress over a denied claim, the denial of a situation as an emergency, repeated "band-aid repairs," or a delay in authorization or in the repair of an item. I would also advise a homeowner not to waste time arguing with American Home Shield but to set a reasonable deadline for the appropriate action. Upon expiration of the deadline without receiving satisfaction from American Home Shield, the homeowner should then proceed as if they did not have a home warranty and then sue American Home Shield for reimbursement. The homeowner should also remember to document every action or inaction by both himself/herself and American Home Shield. Although the disadvantage to the homeowner is initially having to pay for the repairs, the advantage is that the homeowner can choose the service contractor and the brands and quality of products. I won't guarantee all aggrieved homeowners will prevail every time but I have good reason to believe most aggrieved homeowners will prevail the majority of time.

For aggrieved homeowners whose claims were denied at sometime in the past, you may still be able to sue for reimbursement. To make that determination, the homeowner needs to research the statute of limitation for suing on a contract in their state. In any event, a homeowner should be safe filing suit for a claim that was denied during the past twelve (12) months.

Within the next six months, instead of reading homeowner's stories about being scammed and ripped off by their home warranty company, I want to read stories about how homeowners turned the tables and beat their home warranty company at their own game.

If anyone has any questions, I can be contacted at

Good luck.


Comment balloon 9 commentsTim Maitski • September 11 2008 09:06PM


You're an idiot.

Posted by yyyyyyy about 11 years ago

yyyyyy, could you expand on your comment please?

Posted by Tim Maitski, Editor of ( about 11 years ago

Excellent article!

This may be the only way to get your claims from home warranty companies. But homeowners generally do not want to engage with litigations. If there is a class action law suite, such practices may be changed.


Some more horror stories can be found here - Home Warranty reviews




Posted by Anonymous about 11 years ago

American Home Shield is one of the worst, in my opinion. However, there is a much, much easier way to work with insurance companies. I need to go find a blog post by a home inspector who used to work in insurance. Be right back.

Posted by Jim Frimmer, Realtor & CDPE, Mission Valley specialist (HomeSmart Realty West) about 11 years ago

Here it is:

I've had a few Clients following Russel's tactics to great success, and my mom's boyfriend got about $6,000 from his insurance company after the claim had been denied twice. Those little ol' letters to the State Insurance Commissioner can work wonders.

In real estate, it's "Location! Location! Location!" In insurance, it's "Document! Document! Document!"

Posted by Jim Frimmer, Realtor & CDPE, Mission Valley specialist (HomeSmart Realty West) about 11 years ago

Jim, Thanks for the link to that article.  Good stuff to know. I guess if enough people do that, these companies will eventually go out of business.  Take advantage of that strategy while you can.

Posted by Tim Maitski, Editor of ( about 11 years ago

I believe American Home Shield is one of the worst companies out there. Notwithstanding that, understand that insurance companies are in business to make money, and they don't make money by paying claims.

Consequently, the first line of defense for them is to deny claims, regardless of whether or not the claim is valid. The 80/20 rule probably is valid here in that when that initial claim is denied, 80% will say, "Oh, my claim was denied becase ____________" and take care of it themselves. The other 20% will fight the claim.

All you need to do is refile the claim, at with point the 80/20 rule comes into play again in that 80% of those claims will be denied and 20% will be paid.

Keep on playing that numbers game, and eventually your number will come up.

The statute of limitations often gets reset each time the claim is denied and/or refiled.

Posted by Not a real person over 10 years ago


I like the concept for your blog and loved this post.  I had a home I property managed with AHS.  What a NIGHTMARE.  The owners really believed that AHS would fix their HVAC for free.  They got a lot of bandaids, a upset tenant and I had to terminate my property management agreement, as it was a huge waste of time dealing with AHS. 

I'm going to check out some more posts.  Great ideas!


Posted by Michelle Francis, Realtor, Buckhead Atlanta Homes for Sale & Lease (Tim Francis Realty LLC) almost 10 years ago
Well, no one here knows you! I can tell you what I usually tell pepole: you take out half million limits on your auto and homeowners, then get the umbrella policy with whatever REAL limits you need. It's not hard to buy million dollar increments, up to ten million. After that, it can be done, but it's harder.You need to have an umbrella policy that covers your assets, PLUS three to five years income. So. Figure out what your stuff is worth, and add your projected income for the next three years, and round up to the next million.
Posted by Asmat about 7 years ago