Feeling like a chump: Home Warranty Claim

[Matt Huber]

Hello! I had an acquaintance with a real estate investor not long ago. He self-manages several properties, but also has a full time job which keeps him on the road quite a bit. He said that he purchases a home warranty for every rental; that way when something breaks, he can just call the HW company and leave it up to them.

As a relatively new landlord, this sounded like a fabulous idea. I purchased a home warranty for my single rental house from Select back in October. Three weeks ago the tenants reported that the pool/spa heater is malfunctioning. I happen to be out of town, so I call Select HW and report the claim. Two days later they send me an email saying they can't find anybody to make a service call, but that I can find my own provider then submit the repair estimate for approval. Lots of calling around to pool repair folks. Everybody is on vacation (it is late December, after all). One guy said that if a HW company is involved he won't even consider working with me. Finally I find somebody who will look at it. Repair estimate comes to about $1,700 (a new replacement heater would be about $3,000). Estimate and photos of unit (per their request) were sent a week ago, but they are still "evaluating" the claim. It seems to me they've been dragging the timeline out a bit.

Some recent web searching on the topic has rendered the expectation that they will probably deny the claim or offer a very small settlement. Some additional web searching nudges me toward the idea that filing a small claims suit would probably result in a favorable judgement, so long that I can provide evidence the claim is legitimate.

My gut reaction right now is get everything in order to file a suit, so when the denial comes through I can get the wheels moving as quickly as possible. Because properly "serving" the out-of-state HW company might be tricky, I was thinking of engaging my RE attorney to help. (Not sure if I can recover attorney fees as part of the suit in California - but I think not.)

In the mean time, I need to provide a working pool heater for the tenants. I will probably just have my pool guy install a new one while all of this transpires.

So there it is: feeling like a sucker with my dirty laundry hanging in the wind. Am I going about this the wrong way? The benefit of your experience, and any other advice, is greatly appreciated in advance.