Choice Home Warranty has faced a decade of lawsuits from state attorneys general, insurance regulators, and private consumers, capped by an $11.8 million Arizona consumer fraud settlement finalized on January 23, 2026. The Arizona case is the largest home warranty consumer fraud settlement in that state’s history, and Arizona buyers who purchased a policy by phone between January 1, 2013, and January 1, 2023, have until August 1, 2026, to file a restitution claim.1Arizona Attorney General. Attorney General Mayes Opens Restitution Process for $11.8 Million Choice Home Warranty Settlement
The Arizona Settlement
The Arizona Attorney General’s Office filed suit in Maricopa County Superior Court on October 2, 2019, under the Arizona Consumer Fraud Act. The complaint alleged that Choice Home Warranty advertised protection for expensive appliance failures, including air conditioners and refrigerators, while its contracts actually excluded or sharply limited coverage for those same items. The state also said the company buried payment caps in fine print, including a $1,500 overall cap and a $500 plumbing cap, and pointed to a consumer who waited four days in summer heat for an air conditioning inspection only to have the repair denied.2Arizona Attorney General. AG Brnovich Files Consumer Fraud Lawsuit Against Home Warranty Company
The case took more than six years. Attorney General Kris Mayes, who took office in 2023 and made the case a priority, said Choice Home Warranty “fought every step of the way.” The consent judgment requires the company to reform its sales practices and give meaningful disclosures before selling a warranty, and to pay $11.8 million in monthly installments: $275,000 per month for 24 months, then $125,000 per month for 41 months. The Attorney General’s office said it will also run compliance checks by posing as homeowners with the company’s sales representatives.3Courthouse News Service. Arizona Wins $12 Million in Home Warranty Consumer Fraud Settlement Choice Home Warranty denied the allegations and admitted no wrongdoing.4Arizona Attorney General. Attorney General Mayes Announces $11.8 Million Settlement With Choice Home Warranty
How to Claim Arizona Restitution
You may be eligible if you bought a Choice Home Warranty over the phone between January 1, 2013, and January 1, 2023, for a property in Arizona. Restitution can be as much as the full purchase price of the warranty, and you do not need to have filed a prior complaint.1Arizona Attorney General. Attorney General Mayes Opens Restitution Process for $11.8 Million Choice Home Warranty Settlement File the claim through the online form at azag.gov/consumer/chw by August 1, 2026.5Arizona Attorney General. Choice Home Warranty Restitution Claim Form Payments are being distributed on a rolling basis as the state receives each installment from the company.6AZFamily. Arizona AG Urges Consumers to Claim Share of $11.8M Home Warranty Settlement
Other State Actions
New Jersey, 2014–2015
The New Jersey Division of Consumer Affairs sued CHW Group Inc. and three principals in Middlesex County Superior Court in July 2014, citing 1,085 consumer complaints and accusing the company of falsely advertising “comprehensive” coverage while denying claims through pretextual demands for maintenance records.7MyCentralJersey.com. Consumers File Complaints Against Home Warranty Company A June 2015 consent judgment required $779,913.93 in restitution and penalties, revised business practices, and a state-approved compliance monitor for up to two years.8State of New Jersey Office of the Attorney General. Division of Consumer Affairs Obtains Settlement With Choice Home Warranty
Oklahoma
The Oklahoma Insurance Department issued a cease-and-desist order in 2017 for selling policies without a required license, and later found the company kept issuing policies in violation of that order.9Oklahoma Insurance Department. Unlicensed Home Warranty After Choice Home Warranty stopped cooperating with refund efforts in early 2020, the department pursued further action involving fines, referred to an administrative law judge.10KJRH. Home Warranty Company Unlicensed to Sell in Oklahoma Faces Legal Action
Georgia, 2024
Georgia Insurance Commissioner John King banned the company from selling warranty or service contracts in April 2024 after it failed to post a required $100,000 surety bond.11Georgia Office of the Commissioner of Insurance and Safety Fire. Choice Home Warranty Prohibited From Selling Warranty and Service Contracts The company corrected the issue the next month, and the state retracted the cease-and-desist order in May 2024.12Georgia Office of the Commissioner of Insurance and Safety Fire. Choice Home Warranty Cease and Desist Order Retracted
New York, 2026
The New York Department of State entered a consent order in February 2026 finding that CHW Group made unsolicited telemarketing calls to consumers on the national do-not-call list, in violation of New York General Business Law §399-z. The company agreed to a $92,800 civil penalty and to register as a telemarketer in New York before making any future telemarketing calls in the state.13New York Department of State. Choice Home Warranty Consent Order
Class-Action Litigation
The Kernahan Arbitration Ruling
In January 2019, the New Jersey Supreme Court held in Kernahan v. Home Warranty Administrator of Florida, Inc., 236 N.J. 301, that the company’s arbitration clause was unenforceable. The court called the clause “ambiguous and misleading” because mandatory arbitration language was hidden under a section labeled “MEDIATION” in small font, and said it was “unreasonable to expect a lay consumer to parse through” it.14Bloomberg Law. Home Warranty Class Action Avoids Arbitration The ruling let class claims move forward in court instead of being pushed into individual arbitration. The current user agreement still contains arbitration and class-action waiver provisions.15Choice Home Warranty. User Agreement
TCPA Cases in 2025
At least five class actions were filed against Choice Home Warranty in 2025 under the federal Telephone Consumer Protection Act, in Illinois, Oregon, Nevada, and Texas, over unwanted text messages.16TCPAWorld. Choice Home Warranty Sued in Fifth TCPA Class Action in 2025 A federal judge in New Jersey denied the company’s motion to dismiss in Bradshaw v. CHW Group, keeping that case alive.17TCPAWorld. Choice Home Warranty Stuck in TCPA Class Action The cases remained in active litigation as of late 2025.
Why the Same Disputes Keep Recurring
The Better Business Bureau logged more than 11,000 complaints against Choice Home Warranty in a recent three-year period, with over 6,700 tied to service or repair issues. The company is not BBB-accredited and holds a “B” rating.18Better Business Bureau. Choice Home Warranty Complaints19Live 5 News. Lowcountry Family Among Thousands Nationwide Facing Home Warranty Headaches Recurring themes include claim denials based on fine-print exclusions such as “pre-existing conditions,” the company overriding its own technicians’ diagnoses, and consumers receiving partial reimbursements or gift cards rather than full repair costs. Consumers also report being told they were owed nothing upon cancellation because of pro-rata calculations and administrative fees, even with years of coverage remaining.
The contract itself explains much of this. Choice Home Warranty caps liability at $3,000 per covered item over a 12-month period, with lower caps (as little as $250) for certain optional coverages such as septic systems and well pumps. It excludes pre-existing conditions, requires that failures result from “normal wear and tear,” and lists pages of specific carve-outs by system. Air conditioning coverage, for instance, excludes underground piping and refrigerant line sets. The contract also states the company is not liable for the conduct of the third-party technicians it dispatches.15Choice Home Warranty. User Agreement
A Note on Regulation
Home warranties are legally classified as service contracts rather than insurance, and no single federal agency oversees the industry. Each state regulates on its own terms, typically through its insurance or financial services department, and requirements for licensing, bonding, and net worth vary widely.20U.S. News & World Report. Who Regulates Home Warranty That patchwork is why Choice Home Warranty could face a cease-and-desist in one state while selling freely elsewhere. South Carolina’s insurance department told a local news outlet in 2025 that it lacked authority to force the company to pay claims and could only act as a consumer advocate.19Live 5 News. Lowcountry Family Among Thousands Nationwide Facing Home Warranty Headaches If you have a dispute outside Arizona, your realistic options are your state insurance regulator, the BBB, small-claims court, or joining an active class action where you qualify.