should I fight the insurance company's offer?

Question

Problem w/ our furnace started late December. Several people came out & check it including folks from the home waranty co. They told us to get it cleaned out, serviced, & even replaced a sensor all about $650.

Turns out, our furnace heat exchanger (oil heater part that converts the oil to heat) cracked & has been band-aided (last Wed) until the insurance co can work w/ the contractor. The folks from the oil co could relace the furnace on next day for $3k. The insurance co says that they will only pay for the labor of the contractor b/c the exchanger is still under manufacturer warranty & gave cash option of $1200 for someone else to do it.

They called yesterday & said the exchanger is on 2-3 wk back order & will offers new furnace by end of week. New problem: this will add $855 out of pocket + $100 deductable! B/c of disposal, upgrades, liner, & modifying that is not covered.

I dont think its fair thatI have to pay for things that are mandatory for the repair & they wont cover it! They say that they have the same unit that I have b/c its not outdated, so why are there so many modifications?

And the deductable has already been paid when they came out before, but since they misdiagnosed, it is a different problem! I feel like I am getting jerked around! I cant & wont pay the oil company the $3k, b/c the insurance wont even pay half of it, but they include all modifications.

What do you think?

galactose:

Its a home owners warranty! That IS what they cover! That is what they OFFERED ME to cover. Shame on me for asking them to live up to what they said they would do. It doesnt cover ANY of the things you listed!

Let me explain to you what you have made so obvious that you know nothing about; A home owners warranty covers household appliances like refrigerators, stoves, washer/dryer. They offer it to people who buy houses so they feel secure in the purchase because they will cover those items if they break-down. My 'old furnace' is only 12 yrs old, they should last over 20!

If you moved out of the back of your moms trailer, & got your own, you may learn something! Its far from fraud! Unlike your GED.

Gambit:
Thanks for info. My issue is that these extras are being forced on me & they are not paying it. Just like when you buy car tires; you cant have them w/out the stems & balancing, but they charge separate for them! Why? It is required, you cant have the tire w/out the stems, so why is it not in the cost? If you go to McDonalds, you want a Big Mac, OK, but you need to pay extra for the bread & you cant have it w/out the bread.
I can accept paying for things that I am asking for, but if it should be included in the cost, I have a problem w/ it.

galactose:
Again, if you read what I put, you would see it there. It is in the 2nd sentence of my explanation- ''home warranty company''. Why would I make a claim on a policy I dont even have, & they agree to it? Even someone trying to defraud, knows they need to have a policy to make a claim on it. Did you think I was refering to my life policy? or auto?

Answer 1

I'll have to admit I'm not familiar with Homeowner's Warranty Insurance. I looked up Blue Ribbon Home Warranty to see what this type of policy looks like (I have included a link for those who are unfamiliar as well). I do not know if you are with this company, but I will have to assume that these types of policies are similar in terms of policy wordings. In general, when dealing with a partial loss, an insurance company is only responsible for reparing the damaged portion. So if a tree branch fell through your roof and made a two foot diameter hole, the insurer is not required to replace the entire roof. They are only required to repair the damaged portion. In your case, and as per your description, only the heat exchanger is damaged. Since the heat exchanger can be repaired or replaced, the company is only required to repair or replace that part. They are not obligated to replace the entire furnace, unless you can show some clause or section in your contract that states they have to. However I'm skeptical such a clause exists.

Answer 2

Contact your state's insurance commissioner's office and ask how you can file a complaint. They will investigate and ascertain whether the insurer must cover the increased costs.

You should also contact your state's Consumer Protection Division and inquire whether they can assist you with the warranty issue. Most Consumer Protection offices have investigative staff for this purpose.

Answer 3

There are many forms of insurance, health, life, auto, homeowners. I can even get insurance at a blackjack table. You should be more specific when asking questions regarding insurance as what can make sense in one form would be absurd in another.

Answer 4

I would strongly suggest calling your state's Department of Commerce and explaining the situation to them and if they feel they need to get involved they can do so.