Home Warranty Voided vs. Claim Denied: What’s the Difference

Homeowners who are new to the home warranty space understandably have a lot of questions about the terminology they are bound to encounter in their policy materials and correspondence with warranty providers and contractors. On the subject of denial of coverage, homeowners might be confused about the difference between a voided warranty and a denied claim.

A warranty that is voided is outright canceled. The provider effectively rescinds all coverage and protection, typically because the policyholder is in breach of contract. A denied claim is a refusal of coverage, but only for the claim in question. The policyholder still has active coverage and can submit another claim if some other covered appliance or system breaks down.

Voided warranties and claim denials can come about for a number of reasons. Let’s take a closer look at how warranties operate and which sorts of circumstances might instigate a canceled policy or denied claim.

Understanding Home Warranties

A home warranty is essentially a service contract to maintain and repair home appliances and systems. Modern policies also typically include a variety of home services as well. Policyholders — usually homeowners or real estate agents — pay a monthly or yearly premium to maintain active coverage. In turn, the warranty provider issues service when the policyholder submits a claim to repair some piece of home equipment or service some part of the property.

This model is akin to auto, home, or health insurance. The policyholder pays a little bit month after month to keep from paying out of pocket when the need for an expensive home repair or service arises. There may be service fees or deductibles, much like copays and deductibles with varieties of insurance, but the policyholder can save hundreds or even thousands of dollars when suddenly the refrigerator needs to be repaired or the water heater must be replaced. For most homeowners, a home warranty is a valuable investment.

A policyholder submits a claim when an issue arises in the home. The warranty provider then reviews the claim and will approve it if the circumstances are in accordance with the stipulations of the contract. If the appliance, system, or service is not covered under the policyholder’s contract, or if the circumstances of the claim are otherwise outside of what is outlined in the contract, the warranty provider will deny the claim. In this case, the homeowner or policyholder must pay for the repair, replacement, or service out of pocket. 

If the policyholder fails to pay the premium or is otherwise in breach of contract, the warranty provider is well within rights to void, or cancel, the contract entirely.

What Does It Mean for a Home Warranty to Be Voided?

A home warranty voided is canceled altogether. The agreement between policyholder and provider is terminated, which means the policyholder no longer has active coverage and can’t submit a claim to service, repair, or replace anything in the home. 

A voided home warranty is not particularly common and usually results when a customer fails to follow the responsibilities outlined in the contract or service agreement. Here are some general circumstances that might result in voided home warranty issues:

• Failure or refusal to submit payment

Customer payment of monthly or yearly premiums is required to maintain active coverage. If a policyholder neglects to pay the premium or other past-due balances related to service fees or other financial obligations, the warranty provider is within rights to cancel the agreement. 

• Lies, fraud, or misrepresentation

Home warranties are predicated on a property owner’s faithful representation of the home and nature of its use. Any deception while drafting a service agreement or submitting a claim will render the contract void. For example, if a warranty provider discovers that a customer has misrepresented the age or condition of home appliances or systems, the contract may be canceled. An agreement could be similarly canceled if the warranty company learns that a homeowner is using a residential property to run a business or for some other commercial purpose.

• Belligerent or unacceptable behavior

Warranty providers typically reserve the right to void a contract if a customer becomes physically aggressive or uses threatening or unacceptable language when speaking with representatives of the company, including the partnered technicians who perform home service calls. 

You can see that warranties are voided only in serious circumstances. It’s not in a warranty company’s interest to drop customers unless they are delinquent, deceptive, or antagonistic.

What Does It Mean for a Home Warranty Claim to Be Denied?

Homeowners with active home warranty coverage must submit a claim to have a technician repair or service a piece of home equipment. Depending on the nature of the issue and how the problem arose, the warranty company may deny the claim, or decline to provide service. The customer may be able to work with the warranty company’s network of partnered technicians or instead find an independent contractor, but the customer must pay for service out of pocket in this instance. 

In some cases, a homeowner who has a home warranty claim denied can appeal the decision with the warranty provider. Providing more information or negotiating with company representatives can possibly result in a reversal of the home warranty’s claim status, but the likelihood of a successful appeal is entirely dependent on the details of the claim in question.

For a home warranty, denied claim decisions may have one or more justifications. Below are some of the most common reasons for a denied claim.

• The part or appliance is not covered by the policy.

One of the most common reasons for a home warranty resolution resulting in a denial is simply that the item is not covered by the policy. Often, coverage for an appliance or system does not include coverage for a specific part. For example, while a company might offer refrigerator coverage, the policy may not cover the interior racks and shelves. If a customer with refrigerator coverage requested service to replace a broken shelf, the claim would be denied.

• The damage is cosmetic.

Warranties are meant to protect the functionality of home equipment. Scratches, dents, dings, and other cosmetic issues are rarely covered.

• The system or appliance is inaccessible.

Most warranty companies will deny a claim if the equipment is inaccessible because of walls, floors, ceilings, or framing, or if specialized equipment (e.g., cranes or construction equipment) is necessary for adequate service.

• There is a lack of adequate documentation.

Warranties don’t typically cover previously owned or inadequately maintained equipment. Sometimes purchase histories, maintenance records, and other such documentation are required for a claim to be approved.

• The appliance or system suffered from a pre-existing condition.

Appliances and systems that suffer from pre-existing conditions are almost always disqualified from warranty coverage. If a malfunction arises from a pre-existing condition, the warranty provider will not support the item’s repair.

• The repair involves hazardous materials.

Managing hazardous materials, such as asbestos, lead paint, radon, and mold, requires specialized professional treatment. Home warranty companies rarely support claims that involve dangerous materials.

• The equipment was misused or abused.

Warranties are meant to cover appliances and systems that fail due to normal wear and tear. Damage from misuse or abuse is not covered.

• The damage resulted from an accident or disaster.

Providers won’t cover equipment that is damaged in a fire, flood, storm, earthquake or other disaster. Such scenarios are typically where homeowner’s insurance would apply.

Other circumstances may also warrant a denied claim. A comprehensive contract will outline specifically what is and is not covered.

Key Differences Between a Voided Home Warranty and a Denied Claim

The essential difference between a voided warranty and denied claim is that a voided warranty applies to the entire contract. The agreement is terminated. A claim denial pertains only to that specific request for service. The customer is totally free to submit future claims for other appliances, systems, or home services.

How to Avoid Having Your Home Warranty Voided?

Honest homeowners rarely need to worry about a voided warranty contract. You can avoid having your policy canceled by fulfilling your obligations as outlined in the contract. That means paying the premiums you and your provider have agreed upon and not misrepresenting the condition of your home equipment or manner in which you use it.

Tips to Prevent Home Warranty Claim Denials

Careful attention to how you use your home warranty coverage can keep you from being surprised by claim denials. Here are some tips:

• Review your contract carefully, paying attention to the fine print about what is and is not covered.
• Maintain your appliances and systems per the manufacturers’ specifications.
• Know when to use your home warranty and when to leverage your homeowner’s insurance.
• Keep records of purchase histories, maintenance records, repair and installation records, inspection reports, and other related documentation.

And when in doubt, reach out to your warranty provider for more information. Ultimately a warranty is meant to support you and your home. 

Learn more about Liberty Home Guard’s coverage options by calling (833)-547-6493. Our team can share the information you need to craft a plan that protects everything that keeps your home safe and sound. You can read more about our customers' experience on our reviews page.