Call Kurtis: Should You Have To Pay Upgrade Fees For Home Warranty Repairs?

MODESTO (CBS13) — Fans were blasting in the Lazo house when the AC unit went out.

"The house was very hot," said homeowner Jeffrey Lazo.

Lazo says he pays for a $500 a year home warranty with American Home Shield.

However, he says the contractor AHS sent out demanded extra $2,156 to update his AC units piping and ductwork.

"You got to do it and you have no choice and they're putting a gun to your head," said Lazo.

Before letting the contractor AHS sent out do the job, Lazo found an independent contractor who claimed that stuff did not need to be replaced. However, Lazo says American Home Shield would not work with that contractor.

With the Lazo family feeling the heat, Jeffrey caved and paid the money for the upgrades.

"I say wow what happened here," said Lazo.

"They're going to tell you it's for the longevity of the equipment," said Gary Almond with the Better Business Bureau.

Almond says often home warranty companies pay these contractors a low negotiated rate, which may be incentive for an upsell. If you think it's happening to you complain to your home warranty company immediately.

"'Your agent is trying to sell you something I don't need' and 'Do you want to send somebody else out to evaluate the situation," said Almond.

We reached out to American Home Shield, a spokesperson for the company told us
"If you have any questions or feel like you're being upsold, you should absolutely call your home warranty company" adding "because of this story, we're putting a hold on using this contractor."

"I feel like I was duped," said Lazo

After we got involved Lazo says American Home Shield offered him $1,600.

Lazo says he'll accept the $1,600 but is considering dropping AHS.

"It just left me with a cold feeling in the middle of a warm summer," said Lazo.

AHS says if you do not like what you are hearing from one of its contractors ask another one to come out.

The contractor in question here is Central Heating and Cooling out of Hughson. Company owner Chris Ramsey insists his company does not upsell.

We've learned the state has pending disciplinary action against Central Heating and Cooling, but owner Ramsey says he is appealing the violations.

American Home Shield's Full Statement:

"In each case, we are committed to providing our customers with quality service and value, and honoring the terms of our agreement. In the event that we fail to meet any expectations, we work to do the right thing and ensure that the situation is properly resolved."