American Home Shield refuses repair recommended by its own contractor

You know that saying, “the customer is always right?”

Well in this case, Andrew Smith is very right. But when it comes to consumer disputes, rightness doesn’t translate to success.

And particularly with this dispute. Smith’s problem is with American Home Shield (AHS), an insurance company. And as you know, insurance companies are not eager to pay claims.

(Disclosure: Smith is the director of our editing team and asked advocates to help him with this case.)

Back in August, Smith’s central air conditioning system failed, and he sought repair or replacement under his American Home Shield warranty, which covers his whole system. AHS sent one of its contractors to have a look.

The technician recommended a compressor replacement, and the contractor even called in his manager to see the unit as well. Smith was also entitled to get another opinion from another AHS-designated contractor, which he did.

All contractors who looked at his unit concluded that it would not make sense to replace only the compressor because his unit was over 30 years old. Piecemeal repairs in an attempt to keep the old system running could ending up costing more in time, money and resources than simply installing a new system. The contractors, including the manager, agreed that a new system would be a better way to go, but none of them would put that in writing for AHS to see.

Given this input from the contractors, Smith corresponded with the manager at the AHS-contracted service company that initially inspected the system saying:

You stated that a compressor replacement would be an acceptable repair, but this does not comport with previous statements made to me by both you and the technician who performed the initial diagnosis.

Both of you stated that it is physically and technologically possible to replace just the compressor. That might be the reason for your characterization of compressor replacement as “acceptable”; however, to me, “possible” and “acceptable” are not equivalent.

I remain puzzled by your apparent unwillingness to communicate to AHS the same information you communicated to me.

Smith reminded the AHS-contracted service company that its technicians ran diagnostics on the central air conditioning unit at his Virginia home, and when they concluded that the compressor had failed, they informed Smith that because of the age of the unit, replacing the compressor alone did not make sense. It made better sense to replace the entire system. Smith was even given a quote for this work.

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AHS, it appeared at this time, would not pay to replace the system. Rather, their contractor would replace the compressor at no charge except for the refrigerant, or Smith could have a contractor of his choosing do the repair, and AHS would then reimburse him $503, their cost for replacing the compressor.

Smith began his attempts to get everyone to see why it made more sense to replace the entire system by emailing United Air Temp (the AHS contractor) in late August.

The initial response from the contractor manager from United Air Temp was:

Due to the R22 phase out and your non-covered cost for the refrigerant I recommended upgrading. However, a compressor replacement is a good repair on your existing unit. Should you disagree, please contact AHS for a second opinion.

A little later, the same manager wrote:

We recommended an entire new system upgrade because of the R22 refrigerant phase out. We can put in a new compressor and that repair is covered by AHS. It would also be an acceptable repair. However, you would have to pay for the R22 refrigerant that is currently being phased out.

I gave you an estimate for a new R410A system which would be an upgrade to the replacement of the compressor only. I talked to AHS and they have authorized the compressor replacement. We could schedule that repair if you would like or you could upgrade the system. We would be happy to do whatever option you decide.

In early September, Smith emailed Alison Bishop (she is listed on the contacts section of our site), and he mentioned that AHS told him that the cash amount he could get was $503, covering only the compressor.

I recognize that AHS wants to take an incremental approach and also that AHS’s contractors are incentivized to recommend the absolute minimum work, however, due to the age of the unit and the expressed professional opinions by four separate technicians that a compressor only replacement makes no sense, I believe that the case warrants a second look.

He got an initial reply from Glenda Pudenz from AHS executive relations, essentially repeating that the cash out amount of $503, based on what AHS would expect to pay for the covered compressor failure, would be available to him upon AHS’s receipt of a copy of the paid invoice for whatever work was done.

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Next, in further attempts to gain a more satisfactory resolution, Smith sent a certified letter to Michael Clear (next on the list in the contacts on our site).

He had emailed first, but the email came back undeliverable. In his letter he repeated that the United Air Temp manager had refused his direct request to convey to AHS the opinion he expressed to him about replacing the entire system, and recounted how he had written to Alison Bishop via email requesting a reconsideration of the decision to replace only the compressor, and how he had received a reply from Glenda Pudenz reiterating the decision.

Smith said Pudenz’ communication was prompt, professional and polite. But she disregarded the issue he raised, and instead she further introduced irrelevant references to the upcoming R22 refrigerant phase-out. Smith was taking all the right steps, but now even more people became entangled in the situation.

After never receiving any response from Clear — not even an acknowledgment of receipt of his certified letter other than the USPS certified return receipt in his mailbox — Smith wrote to Tim Haynes, president and CEO of American Home Shield.

He repeated everything again, including the chain of people he had reached out to thus far, and he asked Haynes to read this:

Servicemaster’s website states, under the heading “Purpose,” “… we’re committed to delivering exceptional customer experiences and service that customers are proud to recommend.” I do not feel that the decisions made by AHS to date comport with its parent company’s statement of purpose, and therefore I request your reconsideration of the issue.

In October, still without any response from AHS, Smith contacted one of our advocates to see if we could contact the company on his behalf. We did. No reply.

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On Nov. 15, our advocate having expressed the opinion that AHS was never going to respond, Smith faxed in the necessary paperwork and invoice to get the cash out amount. One day later, our advocates emailed to tell him he finally heard from AHS saying they will look further into Smith’s claim.

It is not yet clear whether this means they will pay toward his new system or just the compressor. And Smith is also concerned that AHS understand that his faxed request for the $503 reimbursement does not mean he is giving up his attempts to secure reimbursement for replacement of the entire system rather than just the compressor.

This story is an important reminder that being a savvy consumer means keeping details on everything, saving names and emails, fully documenting everything discussed and staying on top of issues as they escalate toward a hopefully positive conclusion.

We reluctantly consider this a closed case, but will update you if that changes.

Jeff Filipov

Jeff Filipov is a destination planner and a frequent commenter on this site. He became interested in advocacy when his father died on American Airlines flight 11 on Sept. 11, 2001.

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