Lawsuits against First American Home Warranty have mostly failed to move forward as class actions. Two proposed class cases reached the federal courts — Diaz v. First American Home Buyers Protection Corporation and Carrera v. First American Home Buyers Protection Co. — and in both, class certification was denied. The bigger reason group litigation is rare is contractual: the warranty agreement requires binding individual arbitration, which keeps most disputes out of court entirely and channels them into small claims court or the American Arbitration Association.
The Diaz Class Action
Emily Diaz sued First American in federal court in California on behalf of a proposed nationwide class of warranty holders. Her complaint alleged that the company refused to make timely repairs, used substandard contractors, and wrongfully denied claims. She brought state-law claims for unfair competition, misrepresentation, concealment, breach of contract, and breach of the implied covenant of good faith and fair dealing, along with a violation of the California Consumer Legal Remedies Act.1Findlaw. Diaz v. First American Home Buyers Protection Corporation
The district court dismissed the concealment, unfair competition, and consumer remedies claims early on. In September 2011, it denied class certification, leaving Diaz with only her individual claims for misrepresentation, breach of contract, and breach of good faith.1Findlaw. Diaz v. First American Home Buyers Protection Corporation
First American then tried to end the case by making a Rule 68 offer of judgment for $7,019.32, an amount calculated to cover Diaz’s full claimed damages plus interest and a trebled amount. Diaz rejected the offer. The company argued the case was now moot and the district court agreed, dismissing the remaining claims for lack of subject matter jurisdiction.1Findlaw. Diaz v. First American Home Buyers Protection Corporation
The Ninth Circuit reversed in October 2013. It held that an unaccepted Rule 68 offer, even one that would fully cover a plaintiff’s damages, does not moot a case. The court called an unaccepted settlement offer a “legal nullity” and sent the surviving individual claims back to the district court.1Findlaw. Diaz v. First American Home Buyers Protection Corporation
The Carrera Class Action
A second proposed class action, Carrera v. First American Home Buyers Protection Co. (No. 16-56038), reached the Ninth Circuit in 2017. Homeowners alleged that First American misrepresented how often it actually pays out on warranty claims. The lower court denied class certification, and the Ninth Circuit affirmed that denial in an unpublished opinion on November 16, 2017, finding that the company’s statements to individual homeowners were not uniform and the claims lacked the commonality a class action requires.2Bloomberg Law. First American Avoids Home Warranty Class Action
Why Class Actions Are Rare
First American’s warranty contracts contain a mandatory arbitration clause. It requires disputes to be resolved through binding arbitration administered by the American Arbitration Association and governed by the Federal Arbitration Act. In practice, this means customers generally cannot file or join class action lawsuits against the company.3FairShake. First American Home Warranty: File a Claim
How You Can Bring a Claim
Two routes remain open to individual customers. The first is small claims court, which the arbitration clause does not block. Small claims courts handle monetary disputes only, and dollar limits vary by state — in California, where First American is headquartered, the limit is $12,500 for individual plaintiffs. The second is individual consumer arbitration through the AAA, a largely document-based process in which an arbitrator reviews the evidence and issues a binding decision.3FairShake. First American Home Warranty: File a Claim
Before either step, customers are generally expected to try to resolve the issue directly with the company and to send a formal demand letter. The letter should describe the problem, prior attempts to resolve it, and the remedy being requested, and should be mailed to the address listed in the service agreement.3FairShake. First American Home Warranty: File a Claim
What Customers Are Complaining About
The Better Business Bureau profile for First American Home Warranty shows 2,865 complaints filed over the most recent three-year period, with 829 closed in the last twelve months. The overwhelming majority, 2,447, involve service or repair issues. The remainder relate to sales and advertising, order problems, product issues, customer service, billing, and delivery.4BBB. First American Home Warranty Complaints
Customer reviews on the same profile, numbering 1,448 with an average rating of 1.94 out of 5 stars, describe grievances that mirror the allegations in Diaz. Reviewers report claim denials based on findings of “lack of maintenance” or determinations that damage resulted from something other than normal wear and tear. Others describe long wait times for emergency repairs, temporary fixes that fail to address the underlying problem, and difficulty reaching customer service.5BBB. First American Home Warranty Customer Reviews
Recent BBB complaints show how the company applies contract terms to deny coverage. In one 2026 case, a homeowner’s pool pump claim was denied because contractors determined the failure resulted from overheating and low water levels rather than normal wear. In another, a washing machine claim was initially approved and then reversed, with the company calling it a “clerical error” and attributing the damage to “catastrophic component failure” from excessive mechanical stress. The company also denies coverage for modifications or upgrades required during appliance installation, citing the “Limits of Liability” section of its contracts.4BBB. First American Home Warranty Complaints
When the company provides a payout in lieu of repair, it bases the amount on negotiated rates with suppliers, which it acknowledges may be lower than retail cost. One recent case involved a cash-in-lieu payment of $1,211.29. The company also enforces a policy requiring prior authorization before customers hire outside contractors, and denies full reimbursement for unauthorized repairs even when the customer acted because no assigned contractor was available.4BBB. First American Home Warranty Complaints
Filing a Regulatory Complaint in California
First American Home Warranty Corporation is licensed and regulated in California by the California Department of Insurance as a “Home Protection” company.6California Department of Insurance. Company Profile: First American Home Warranty Corporation Home warranties are not technically insurance in California, but the CDI requires home warranty companies to be licensed and to follow consumer protection rules. Contracts must clearly disclose exclusions, limitations, service fees, and performance terms, and must include a provision requiring that services be initiated within 48 hours of a phone request.
Customers who believe a claim has been unfairly denied can file a formal “Request for Assistance” with the CDI, which investigates complaints about unlicensed operations, unfair denials, and delayed repairs.7California Department of Insurance. Home Protection Contracts A regulatory complaint runs alongside, not instead of, the arbitration or small claims process spelled out in the contract.