How to File a Complaint Against a Home Warranty Company

Home warranties help homeowners with necessary repairs and replacements of covered appliances or home systems. However, homeowners often face claim denials and are left confused when this occurs. To avoid these unexpected claim denials, be aware of what your home warranty plan covers or excludes. If you believe your claim was wrongfully denied, you may still have options including filing a complaint against a home warranty company. 

This article outlines how to file a complaint against a home warranty company: 

• File a small claims court lawsuit

• File a complaint with your state’s Department of Insurance

• File a complaint with the Better Business Bureau ("BBB")

One option for filing a complaint against a home warranty company, is taking the home warranty company to small claims. 

Remember, just because a home warranty company has denied your claim doesn't mean that the home warranty company acted legally. It is up to a judge to decide whether the home warranty company should have reimbursed you for your claim.

Make sure to review your home warranty contract for any requirements prior to filing a small claims lawsuit. 

What types of lawsuits can be filed against a home warranty company in small claims?

Many types of small claims lawsuits can be filed against a home warranty company, the most common ones are over:

• Bad faith denial of a claim. For example, your home warranty contract states that the company will pay for a new water heater if your water heater stops working within 2 years. It has been a year and your water heater has stopped working but the home warranty company fails to replace your water heater. 

• Failure to pay for all costs on a covered claim. For example, your home warranty plan covers water leaks, but the home warranty company only paid for 50% of the contractor’s bill. 

How much can you sue a home warranty company for in small claims court?

The maximum amount you can sue for in small claims court varies by state and can be between $2,500 and $25,000. 

How to file a small claims lawsuit against a home warranty company

There are 4 steps to taking a home warranty company to small claims court. 

1. Prepare the lawsuit.

2. File the lawsuit.

3. Serve the lawsuit.

4. Prepare for the small claims hearing.

Preparing the Small Claims Lawsuit

Go to your local small claims court website to download the small claims court forms. 

In many states, you will also need to look through your contract to confirm the correct legal entity name for the home warranty company. Once you have the correct legal entity name, you will be able to search your state’s secretary of state website to look up the “agent for service of process” for the home warranty company as you may be required to list this information on the court forms. You will later serve the lawsuit on the agent for service of process. 

File the small claims lawsuit

Call the court clerk to verify how many copies of the lawsuit you need to bring with you and how they accept payment for the filing fees. Some small claims courts accept filing by mail, fax, or electronically. 

Serve the lawsuit

After the lawsuit is filed, the next step is to serve the small claims lawsuit on the home warranty company. There are different rules on how to serve a company in each state so make sure you review the rules for serving. 

In many states, you will need to serve the “agent for service of process” for the home warranty company. This is a person or business that is in charge of receiving legal documents on behalf of the home warranty company. 

Confirm with the court to determine if there are any additional filings you need to complete and file after you have served the home warranty company.

Prepare for the hearing 

The most important step is preparing your evidence for the small claims hearing against the home warranty company. Make sure you have your contract or policy available, any communications with the home warranty company, estimates from contractors, invoices, and pictures. You want to make sure you bring all relevant evidence with you to the hearing. 

Each state has a department of insurance which is the government agency that regulates home warranty companies operating in your state. 

For example, in California, home warranty companies are regulated by the California Department of Insurance. While it may be too late this time around, make sure to always review home warranty company complaints before purchasing a home warranty. 

What types of complaints will my state department of insurance handle?

While each state’s department of insurance is different, they tend to handle a broad range of complaints against home warranty companies. Here are some examples:

• When a home warranty company fails to reimburse you for a claim.

• When a home warranty company fails to respond to you.

• When a home warranty company has improperly denied your claim.

How to File a Complaint with Your State’s Department of Insurance

Go to your state’s department of insurance website and follow the steps. They may have an online form or you may need to mail a form in. 

If you are located in California, here is how to file a complaint with the California Department of Insurance against a home warranty company: 

Online: CA Department of Insurance Complaint Form

You can also contact their consumer hotline for more information: 1-800-927-4357

The California Department of Insurance will conduct an investigation of your complaint against the home warranty company. They will review any supporting evidence you chose to upload and they will reach out to the home warranty company for a response. Make sure you create an account on the Department of Insurance's website so you can follow the status of your complaint!  

What is the BBB?

The BBB is a non-profit that serves as an intermediary between home insurance companies and consumers.

Reasons why some home warranty companies respond to BBB complaints 

• If the home warranty company is accredited with the BBB and they don't respond to a BBB complaint, their accreditation may be revoked and the complaint becomes part of their BBB profile.

• If the home warranty company is not accredited with the BBB, the complaint will become part of their BBB profile.

• BBB reviews provide other consumers with confidence when engaging with a home warranty company. Insurance companies do not want negative BBB complaints.

What types of complaints against home warranty companies does the BBB handle?

The BBB handles a broad range of complaints against home warranty companies. Including if your home warranty company does not pay for all costs on a covered claim.

Read More: How to file a complaint with the Better Business Bureau (BBB)

How to file a complaint against a home warranty company with the BBB

1. Go to the Better Business Bureau website.

2. Scroll to the bottom of the page and click the button “Start Your  Complaint.”

What to Expect Once you Submit your Complaint to the BBB

• The BBB will forward your complaint to the home warranty company within 2 business days.

• The home warranty company will be asked to respond within 14 days, and if a response is not received, a second request will be made.

• You will be notified of the home warranty company’s response when the BBB receives it (or notified that they received no response).

• Complaints against home warranty companies are usually closed within 30 business days.