Denial

A formal decision by the warranty company that a claim is not covered under the contract terms, citing one or more exclusions or contract clauses.

Why it matters

Denial rates vary across carriers from roughly 15 to 50 percent of all claims filed. The denial reasons are almost always the same handful: pre-existing condition, code-violation repair needed, refrigerant recovery (HVAC), lack of maintenance documentation, or the failure is 'cosmetic.'

A denial is not the end of the road. Most carriers have an appeal process. State insurance regulators (NAIC) and the state attorney general's consumer division accept complaints, and AG action is what produced the Choice Home Warranty $11.8 million settlement in Arizona in 2025.

Best practices

Always request the denial in writing with the specific contract section cited. Document everything. Request a second opinion from an independent contractor if the denial hinges on diagnosis. Escalate through the carrier's appeal process first, then state insurance regulator, then AG consumer division.

Frequently asked

Can I sue the warranty company over a denied claim?

Yes, but most contracts have a binding arbitration clause that requires you to arbitrate instead of suing. Read the dispute resolution section. The cost of arbitration is usually shared and is much cheaper than litigation, but the outcomes favor the carrier statistically.