Business Contracts American Home Shield claim denial

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RobM1977

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AHS is denying my claim for my broken hot water heater because it was not the correct type of water heater. The house is supposed to have an Apollo water heater because it's also used to heat the home, but it was a standard water heater. We bought the house in April of 2011 and the plumber that AHS sent out said that the water heater is 15 years old and appears to have been in the house since that time. We have the warranty that includes mismatched systems and improper installations, repairs, and modifications and I don't see any exclusions in the contract that should keep it from being covered. The woman that called claimed this is not a situation of a "mismatched system" and is not going to cover it. I'm wondering if I have any legal right to sue due to breach of contract. I would be happy to provide a copy of our contract for help in the matter.

Thanks!

Rob-Virginia Beach, VA
 
You can sue anyone for anything.

Based upon what you related, I don't see that you'd have a case.

However, fill out a few papers, pay a fee, and you can sue Santa Claus.


Sent from my iPad3 using Tapatalk HD
 
I'm sure the sample contract does show that, but each contract is different based on the state. There are also different coverage options available that include certain exclusions from the general contract. Of course their website is down at this time, so I'm not able to access my contract directly to attach. I had copied this from my contract yesterday waiting to hear back from them:

Section F

6. IMPROPER INSTALLATIONS, REPAIRS, OR MODIFICATIONS
AHS will cover an existing defect or mechanical failure of an item that was improperly
installed, repaired, or modified prior to or during the contract term. If the improper
installation, repair, or modification violates a code requirement, Section F.4 applies.
7. MISMATCHED SYSTEMS
AHS will cover an existing defect or mechanical failure of a system that was not properly
matched in size or efficiency prior to or during the contract term. If the mismatched system
violates a code requirement, Section F.4 applies.
 
I'm able to access the site now. I don't show any way I can include the PDF of the contract, so I'll just include the verbage that applies to this situation. Section e.ii of the exclusions is the one they are basing their denial upon.

This is the Service Plus package that we carry:

F. SERVICEPLUS PACKAGE
NOTE: This coverage does not apply when systems are undersized in relation to the
square footage of the area being heated or cooled.
1. REFRIGERANT RECAPTURE, RECLAIM, AND DISPOSAL
2. REMOVAL OF DEFECTIVE EQUIPMENT
When AHS replaces a covered item, AHS will pay the costs to dismantle and/or dispose of
such item (see Section I.4.b).
3. PERMITS
AHS will pay the cost for obtaining permits for AHS-approved repairs and replacements up
to $250 per occurrence.
4. CODE VIOLATIONS
AHS will pay up to $250 per contract term to correct code violations when affecting AHSapproved
repairs or replacements.
5. UNDETECTABLE PRE-EXISTING CONDITIONS
AHS will cover an existing defect or mechanical failure provided the defect or mechanical
failure could not have been detected by visual inspection or simple mechanical test. A
visual inspection of the covered item verifies that it appears structurally intact and without
damage or missing parts that would indicate inoperability. A simple mechanical test of
turning the unit off or on verifying the item operates without irregular sounds, smoke or
other abnormal outcome.
6. IMPROPER INSTALLATIONS, REPAIRS, OR MODIFICATIONS
AHS will cover an existing defect or mechanical failure of an item that was improperly
installed, repaired, or modified prior to or during the contract term. If the improper
installation, repair, or modification violates a code requirement, Section F.4 applies.
7. MISMATCHED SYSTEMS
AHS will cover an existing defect or mechanical failure of a system that was not properly
matched in size or efficiency prior to or during the contract term. If the mismatched system
violates a code requirement, Section F.4 applies.

And this is the list of exclusions:

NOTE: Unless otherwise specified in this contract, the following limitations and
exclusions apply:
General Exclusions from Coverage
1. This contract does not cover:
a. Routine maintenance (you are responsible for providing maintenance and cleaning
of covered items as specified by the manufacturer);
b. Repair or remediation of cosmetic defects;
c. Electronic, computerized, or comfort control home management systems;
d. Repair, replacement, installation, or modification of any covered item or component
or part thereof, that has been, or is, determined to be defective by the Consumer
Product Safety Commission or for which a manufacturer has issued, or issues, a
warning, recall, or determination of defect; or
e. System or appliance upgrades, or repairs or replacements required:
(i) when the malfunction is due to missing components, parts, or equipment;
(ii) when the malfunction is due to lack of capacity in the existing system or
appliance;
(iii) when the malfunction is due to a system or appliance whose parts or
components are improperly mismatched in terms of capacity or efficiency (unless
the ServicePlus Package is purchased); or
(iv) to comply with any federal, state, or local laws, regulations or ordinances,
utility regulations, or building or zoning code requirements.
2. AHS is not responsible or liable for performing service, or paying remediation costs,
involving hazardous or toxic materials.
3. In regards to mold, mildew, bio-organic growth, rot, fungus, or pest damage, AHS is not
responsible or liable for:
a. Damages caused by such substances;
b. Diagnosis, removal or remediation of such substances; or
c. Repairs or replacements necessitated by such substances.
 
I carry the same, or at least a very similar policy as you from AHS.
I think you have a good argument to make regarding mismatched systems, but you should exhaust all options of appeal with AHS and consult an attorney before you opt to sue. Also consider the cost of lawsuit against the cost of just paying for the repair.
When you bought the home did the inspection make any note of the water heater being incorrect? You may also be able to make the argument that the problem was undetectable if the inspector missed it.
 
It appears these will be the losing clauses.

F. SERVICEPLUS PACKAGE
NOTE: This coverage does not apply when systems are undersized in relation to the
square footage of the area being heated or cooled.
Click to expand...

e. System or appliance upgrades, or repairs or replacements required:
(i) when the malfunction is due to missing components, parts, or equipment;
(ii) when the malfunction is due to lack of capacity in the existing system or
appliance;
(iii) when the malfunction is due to a system or appliance whose parts or
components are improperly mismatched in terms of capacity or efficiency (unless
the ServicePlus Package is purchased); or
(iv) to comply with any federal, state, or local laws, regulations or ordinances,
utility regulations, or building or zoning code requirements.
Click to expand...
 
I'm going through the same issue with AHS. Wondering what the outcome was for you?
 
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