SUMMARY: HMS refused to refund (even a prorated amount) premiums from a cencelled annual home warranty policy referring to a contract clause that entitled them to "keep" the premiums as earned.
However, HMS only mails the contract upon payment receipt, does not provide any cancellation disclosures in ANY sections of their web page (s) (I checked & printed all terms, disclosures, etc.) and does not provide a review & cancellation period should the customer find the terms of the contract unacceptable.
It took me many hours of research time, detailed phone call logs, etc. To finally get the refund. I have no problem with HMS claiming they "earned" the premiums should they let me know upfront that "REFUNDS ARE NOT PROVIDED".in this case, HMS "STEALS" the premiums and I suspect may be violating the consumer protection laws through non-disclosure.
Hope this helps everyone who is unhappy with HMS or other home warranty companies.
PS: HMS told me that they filed & received approval from the Virginia Insurance Comission for the contract terms. I don't know whether the comission actually knows that the contract terms are not available for review prior to the payment. I called the VA comission and they instructed me to file a written complaint.
Body of the letter that got me the refund:
August 23
Dear: xxxx,
I am writing to you to request a refund of my premiums paid ($370, prorated if must). I cancelled the contract for the following reasons:
1. HMS had a very difficult time locating an HVAC service provider for my area/unit on the claim #XXXXXXXX. Out of 8 contracted service providers, only 1 [name blanked out] was willing to come out for diagnostic service.
2. [Name blanked out] was unprepared to service the unit and provided excessive ($500) estimate to clean the AC unit without any guarantees that such service would improve the AC performance or bring the unit into acceptable HMS serviceability standards. Note that an HVAC service provider has been performing the maintenance on the AC service unit since I purchased the property. Service performance can be validated with receipts.
3. Having become aware of HMS' service level (unacceptable in my opinion) in screening and locating providers and the MHS' contracted providers' unscrupulous & excessive estimates, I decided to forgo the warranty process and replace the AC unit at my own expense and expected to receive a prorated refund
of the premium. Prorated portion being 7/17/05 (policy start date) to 8/6/05 (cancellation request date).
4. HMS' refusal to provide a refund based on the contract terms Section IX, paragraph 3, Cancellation If you cancel the contract, all premiums are considered fully earned and are not subject to refund is unfair to the customers and may be in violation of the consumer protection laws for the following reasons:
A. Customers are not informed of the terms of the contract prior to sending a payment. Neither HMS website nor warranty application provide contract details for customers to assess whether they want to commit $370 without the right to a refund in case they find the contract terms unacceptable or company's service unsatisfactory.
B. Warranty contract terms are mailed only upon initiation of the policy with a payment.
C. The contract does not provide for a review period, therefore, a customer isn't provided an opportunity to review the contract terms and cancel (with refund!).
For these reasons I request a refund amount of $348.37 (see computation below).
$370.00 per 360 days of coverage
$370.00/360 days/year = $1.03 per day cost
Policy in effect 21 days = 21*$1.03 = $21.63
Refund Amount: $370.00-$21.63 (prorated portion) = $348.37
It is my hope that HMS will honestly and expediently process the refund requested. I am sure that warranty is not an easy business; however, it is my view that HMS has crossed the line and I hope the company will correct this misunderstanding without any additional steps on my part.
Sincerely,
XXXXXX
Carbon Copy:
HMS National
Attention: Howard Brothers
Vice President of Business Development
1625 NW 136 AVENUE
Suite 210
Fort Lauderdale, FL 33323
HMS National
Attention: Jeanie Matten
Senior Account Executive
1625 NW 136 AVENUE
Suite 210
Fort Lauderdale, FL 33323
HMS National
Attention: Joe Opoka
Regional Sales Manager/Central States Consultant
1625 NW 136 AVENUE
Suite 210
Fort Lauderdale, FL 33323
Enclosures:
HMS Plan Cover Letter
HMS Home Protections Coverage Contract
HMS Cancellation Request Confirmation
Event Chronology from the homeowne
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