I had a valid claim from Warranty Direct for an auto repair. They denied the claim based upon the timing of when they were notified, not about the claim itself, they never questioned that it was a valid claim. They were unwilling to discuss it or negotiate in any way. I was calm and polite throughout the process, but with one exception, their employees were rude and obnoxious.
It turns out they have done one thing to make it a little easier to collect. At least in my contract, it says that if you have a dispute it must be arbitrated by the American Arbitration Association. That's good news for you, because of the AAA fee structure. For an aribitration, a consumer pays the max of $125 for an arbitration up to $10,000. But the company has to pay at least $900. So if your claim is less than $1,000 or so, it's cheaper for them just to pay you off.
Can they just blow off the arbitration? No, for two reasons. First, the insurance regulators would not take kindly to their violating their own contract. Second, the AAA would require them to change all their contracts removing the AAA's name. They can't say they'll honor the AAA code and then ignore it.
So if you have problems with these guys, don't be afraid. Go to the AAA website and file your arbitration and send your $125. You should eventually get your money from Warranty Direct and since no arbitration actually happens, the AAA will give you your $125 back.
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