Updated: October 24th, 2012

image  I’m now convinced that insurance companies exist in this world for the sole purpose of making our lives a living hell any time we need to deal with them. The worse each experience, the less likely we are to file another claim. Of course, we’re also less likely to continue coverage with the same company, but at that point they’d already received our money and, if we accept a notion that most insurance companies have the same evil idea in mind, there’s little one can do to get satisfaction. Except for one thing – spread information about such especially heinous institutions.

Does my story have a happy ending? Maybe, or maybe not, it depends on whether you think the journey was worth it – you be the judge.

So what happened in my case and why am I so furious? Having just recently bought a house, I wanted to have peace of mind for at least some foreseeable future and paid for a year of home insurance that covers such things as kitchen appliances, electrical work, washer/dryer, heater, etc. The only damage was promised to be a reasonable $55 charge per occurrence, with some acceptable exclusions. The sun was shining and birds chirping as I mailed First American Home Buyers Protection Corp (further FAHBP) my check for ~$250.

Everything was going well for about 2 months, we started decorating and cleaning up the house, and life was great. That is until one day when the 23 year old built into the wall microwave decided to stop working completely. Fear not, I thought, I have insurance just for such a joyous occasion. Right? Keep reading.

A quick call to 800-992-3400 and an agent was on the phone. So far so good. She took my claim (I made a mistake of starting it with small dishwasher issue, so until now my case is known as THE DISHWASHER CASE, and I had to explain every time I called that it’s actually THE DISHWASHER AND MICROWAVE CASE and that the dishwasher had been doing fine after the first visit. Apparently, changing the title of a case is an insurmountable impossibility to FAHBP) and promised a contractor would call me for an appointment. At this point I was quite satisfied, not realizing that it was the end of my satisfaction.

imageThe experience of the next month is better described in my BBB complaint below (with a few edits).

Company Information:

First American Home Buyers Protection
P.O. Box 10180
Van Nuys, CA 91410-1980
Website: http://homewarranty.firstam.com/
Phone: (800) 553-6699

Complaint Text

I'd like to preface this by saying that I haven't had such bad experience with a company ever since I dealt with Dell Home.
Every agent of FAHBP I've spoken with regarding my claim is extremely irresponsible.
Day 1. Contractor comes out to see my microwave. This is the only part of the process that worked OK, since he isn't associated with FAHBP. He tells me he needs a spare part for the microwave (built-into-the-shelf unit from 1985). Fine.
Day 8. No word from either the contractor or First American. I call them to find out that the contractor asked to initiate a part search that should be completed within a few days.
Day 14, 15, 16. Still no reply, so I call them myself. The part search has not come back yet (how long can I wait? Days, months? Nobody on the phone can answer that).
Day 17. I talk to yet another customer service rep, Brad, who informs me that the part search had never been initiated correctly, and nothing was happening. That's almost 3 weeks after we started the process. He assures me he is going to take ownership of my case and call me by the end of the day. No call that day, or the next 3.
Day 21. I call to talk to Brad but he's not available all day. Another agent tells me no part search is happening because they don't know the model number of the unit. Don’t have the part number of the unit?? How the ***** does that come up only now?The agent on the phone makes me go to my microwave and dictate her the model number. A call is promised by Brad and/or his manager.
Days 22-26. No call. They never-ever call back. I try Brad a few more times and every time he promises to call back, giving various excuses as to why nothing is happening. Additionally, I am introduced to a new amazing method of solving my problem: apparently FAHBP now found some repair place **** knows where. They are going to send the broken 23 year old part to this place and it will get repaired in an unknown amount of time. After that, they are going to send it back to me.

That's where I am today.

Resolution Sought: Do what you're promising to do on the flashy flyers. Enforce your own guidelines. Make the agents do their jobs and be responsible for cases they own. Make sure I get at least one call back out of the 10 promised. At least once, damnit! My case is not only unresolved, it's not even started after a month.

So, by day 26 I felt incredibly frustrated, pissed off, annoyed, furious, desperate, and helpless. Never in my life did I ever feel in such a way communicating with a company (with the exception of Dell and recently Netshops.com with their hundreds of properties, like ModernFurniture.com – an amazingly irresponsible company).

I had no other option but to follow through with my threat to submit a BBB claim. The BBB website claimed FAHBP had a very high rating of “BBB” (ratings explained here). That was news to me, so as last resort, I wrote up the complaint you’ve just witnessed and sent it in. That was Friday.

image Looking back at my experience, I now understand exactly how such big corporations work. The bigger the company, the faster it is going to act on any BBB complaint because it uses a very simple formula: consumers who haven’t done business with it yet are likely to look up BBB (and some other ratings) first. The amount of business the company is going to get is in some way proportional to how good its rating is. Therefore, it is much cheaper to prioritize and take care of the few BBB complaints as soon as possible than lose potential business brought by a lower rating. A corollary of the above is that though smaller companies are probably still likely to act on BBB complaints, they are not going to do it with the same vigor.

On Monday at exactly 10am, I received a phone call from a very upbeat woman. She introduced herself as some sort of a consumer resolution specialist from First American corporate. She had received my BBB complaint and was prepared to:

  1. Refund the $55 service call fee for all my troubles.
  2. Apologize profusely for how incompetently FAHBP has been handling my case.
  3. Offer me a brand new $1600 microwave/oven combination from Sears.com or a cashout of about $1300.

Wow, what a change in attitude. I felt like a cheap whore (apologies to all cheap whores out there), like a kid who couldn’t stand up for himself and had to go complain to daddy. Only after drastic measures did they begin to budge and that made me sick. I took the cashout option because I didn’t like the proposed microwave combination model and closed the case.

Whether or not you will chose to avoid FAHBP because of this article is up to you. Dealing with big corporations is not easy but knowing about BBB can be very powerful in certain cases and you, as a consumer, deserve to have this knowledge. Don’t abuse it but be aware of your options. Additionally, submitting your story to consumerist.com is another great way to go, which is what I’m now going to do retroactively.

Have you had any experience with First American or other insurance companies? Was it good or bad? Feel free to leave a comment.

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Artem Russakovskii is a San Francisco programmer and blogger. Follow Artem on Twitter (@ArtemR) or subscribe to the RSS feed.

In the meantime, if you found this article useful, feel free to buy me a cup of coffee below.