We have a home buyers protection policy from First American Home Buyers Protection Corporation. Our heater was emitting carbon monoxide gas and was shut-off and red tagged by the gas company. First American sent out a contractor to look at the heater. They determined that the heater needed to be replaced and promised (on their invoice) to send us an estimate of the "uncovered charges" later that day. Since we had a 1 year old and 3 year old in the house, and the temperature at night was in the 20's, we hoped to get the heater replaced as soon as possible. After numerous calls for the next 5 days, they finally sent an estimate. The estimate of uncovered charges was $1200. We spoke to other heating contractors and received additional estimates. Both companies agreed that the charges for "modifications" that supposedly were not covered by our contract (this is in dispute, also), were grossly inflated and many were unnecessary. When I called the original contractor, they said that they would charge us the cost based on the estimate because all of the "modifications" they proposed were necessary. They also said that they "had to charge more because the insurance company didn't pay them enough." We went back to the insurance company and requested a new contractor or second opinion. They told us that they would not change the contractor or provide a second opinion. They explained the option of a "cashout" and defined it as the exact cost that they would have to pay if the contractor did the work. The representative I was speaking with gave me prices based on the work the contractor proposed and what was covered by the agreement. This totaled about $850. There was another charge on the estimate that I disputed and I was told that it would also be covered by the insurance contract.
I called the insurance company back the next day to again ask for another contractor or second opinion and they again refused. I asked to get a final total including the additional $150 charge that I was told would be covered. They came back and said they made a mistake and the cashout amount would only be $488. They said the contractor would only charge them $138 total for labor to bring out a new heater, install it, take away the old heater, pay for permits and do the other work that they were going to charge us $150 that should have been covered by the contract. Therefore, we could pay $1050 for the existing contractor which included bogus charges and price gouging (since we didn't have a choice). Or, we could take $488 as a cashout from the insurance company. I strongly questioned the amount as not being honest based on their policy to pay us the same amount as their direct cost (since it was over $800 the day before). We have received two estimates for the same job from reputable companies. One for $2,200 and one for $1,600. I believe we are being defrauded and that the contractor and the insurance company are scamming us and both are complicit.
This company requires you to use sub-standard, ripoff contractors and are in on the scam of having the contractor come up with a bunch of charges to make up for what the insurance company isn't paying them. They REQUIRE you to use their crooked contractor who is in on the scam. They proceed with claims in bad faith and then do not tell the truth about the cashout amount.
I'm sure we're not alone in being scammed by this company and being forced to use a crooked contractor (with no chance of a second opinion or a competitive bid). I would love to participate in a class action. In the meantime, we are going to court.