First American Home Warranty claims, decoded: caps, clauses, and the denials they're known for

Pre-existing conditions

Items must be in safe working order at the start of coverage. Contract 'provides coverage for unknown defects if the defect is not detectable through visual inspection or simple mechanical test (excluding renewal and non-real-estate-transaction customers).' Items also expressly include malfunctions due to lack of maintenance, rust, corrosion and chemical/sedimentary buildup.

IMPORTANT notice, p.1 of sample contract

Can they demand your maintenance records?

No clause found that lets the company demand maintenance records to review a denial. Contract instead states 'This Contract does not cover routine maintenance' (Limits of Liability #14) and lists as a customer duty 'Installing and maintaining appliances/systems following manufacturer's specifications' and maintenance if the Service Provider determines it is required (YOUR DUTIES). Notably the contract affirmatively covers malfunctions due to lack of maintenance.

Limits of Liability #14; YOUR DUTIES (i)-(iv)

Hiring your own contractor

'Company will not reimburse you for services performed without prior approval. Company has the sole right to choose a Service Provider.' Out-of-network use is generally only granted when the company cannot locate a Service Provider; approval must be secured in advance, provider must be licensed/insured and submit diagnosis first, work must be at an agreed rate, and reimbursement is capped at the authorized amount on an itemized paid receipt.

IMPORTANT notice p.1; CUSTOMER SERVICE #3 (a)-(f)

If you fight: how disputes work

All disputes and claims must be resolved by binding arbitration on an individual basis (class, representative and private attorney general actions waived; jury trial waived), administered by AAA under its Consumer Arbitration Rules; company pays AAA filing/administration/arbitrator fees for claims of $75,000 or less (bad-faith exception). Arbitration takes place in the same county as the covered property; Federal Arbitration Act governs. EXCEPTION: any party may bring an individual action in small claims court instead.

RESOLUTION OF DISPUTES section, CS3T 03/24 sample

• Detectable pre-existing defect: unknown defects covered only if not detectable through visual inspection or simple mechanical test; item not in safe working order at coverage start — contract clause
• Improper installation, missing parts, misuse, lack of capacity, fire/flood/freeze and other non-wear causes excluded — contract clause
• Company's sole discretion on repair vs replace; replacement is similar features/efficiency/capacity only - no matching of brand, dimensions or color, and company may install a smaller-capacity unit — contract clause
• Routine maintenance not covered; customer duty to maintain per manufacturer specifications — contract clause
• Second-opinion trap on denials: customer must request a second opinion within 14 days of a non-coverage notice, company picks the second provider, and if the second diagnosis matches the first the customer pays an additional service call fee; company will not reimburse a customer-selected provider — contract clause

Run your own situation through the readiness checker — it uses this company's caps and clauses. Already denied? The denial decoder starts with the reason on your letter.