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Call Kurtis Investigates: Home Warranty Company Operates Illegally in California

FOLSOM (CBS13) — A home warranty company has been illegally operating in California, a Call Kurtis Investigation has uncovered. Customers up and down the state have complained after being sold policies for years of protection saying Colonial Home Warranty was not there for them when they needed the protection.

Neville Patel of Folsom says his microwave stopped heating. Instead of replacing the broken magnatron part, he says Colonial Home Warranty offered him a $45 buyout saying the part wasn't available. CBS13 confirmed with G.E., it had nearly 5-hundred of the same magnatron parts in stock at $246 apiece.

"They don't want to fix it," he said.

Ernie Hills of Sacramento says when his stove quit working, Colonial Home Warranty offered him a $35 buyout, saying the expensive part wasn't available.

"It wasn't available from the source they had, and they weren't willing to look for it," he recalls. Ernie says he found the part and told them where they could get it.

"They're despicable," he said.

CBS13 has learned Colonial Home Warranty headquartered in Delaware never should've sold policies in California, where they are not licensed.

"They were operating illegally," said Department of Insurance spokesperson Nancy Kincaid.

In fact, Colonial Home Warranty's own website stated its warranty program is not available in California. The Department of Insurance sent the company a cease and desist letter.

After our repeated calls to Colonial, we finally spoke with someone who would not address why the company sold policies in California. He initially agreed to look for a magnatron part for Neville before increasing the buyout offer from $45 to $165. Before paying Neville, the company suddenly shut down and filed for bankruptcy.

"We trust them with our money thinking they'll help us," Neville said.

Now he and Ernie are in line at the bankruptcy court where at most, they'll probably get pennies on the dollar covering what they're owed.

"They're crooks," he said.

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