Denial

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

Why it matters

Denial rates vary across carriers from 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. Most carriers have an appeal process. State insurance regulators (NAIC) and state AG consumer divisions accept complaints, and AG action produced the Choice Home Warranty $11.8 million Arizona settlement 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 carrier appeal 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. Arbitration costs are usually shared and outcomes statistically favor the carrier.