A thermostat hovering at 52 degrees or a dryer full of soggy clothes can be a homeowner’s worst nightmare. An unexpected appliance repair bill can really take a bite out of your budget—and the worst part is not knowing how big of a bite it’s going to be.
Many homeowners are turning to home warranty companies for reassurance that system and appliance repairs will be covered with a flat monthly rate, but is it really that easy?
*Prices listed are for homes under 5,000 square feet, and prices do not include state and local taxes. **Service fees are $100 at this monthly rate. Customers have the option of changing service fees for a higher or lower monthly rate.
What’s Covered in Each Plan
Heating and AC with ductwork
Instant hot/cold water dispensers
Clothes washers and dryers
Freestanding ice makers
Garage door openers
Built-in food centers
Everything from the Systems Plan and the Appliances Plan
Build Your Own Plan
Any 10 items from the Systems Plan or the Appliances Plan
Additional items for $2 each per month
American Home Shield Basics
American Home Shield has a variety of home warranty options to choose from based on homeowners’ needs. The flexible pricing helps you feel in control of your service plan, but coverage restrictions can be frustrating if you haven’t read the fine print. Things like preapproved service contractors, service fees, and annual dollar caps are important to understand before signing on the dotted line.
Homeowners Insurance vs. Home Warranty Service
First, what’s the difference between homeowners insurance and a home warranty?
Simply put, homeowners insurance handles all the accidental damages that can happen to the structure of your home—like wind damage, fire, or flooding.
A warranty company, on the other hand, offers home warranties to cover unexpected breakdowns of your home’s systems and appliances due to normal wear and tear. Warranties may cover things like your plumbing, air conditioner, or built-in microwave oven. Unlike homeowners insurance that is usually mandatory, home warranties are more like a service contract for appliances or systems that will end up aging or breaking down eventually.
For example, if your toddler uses your dishwasher door as a trampoline and breaks it, a typical home warranty will not cover it. But if your dishwasher door won’t close correctly because the seal has come loose over time, your repair may be covered under a home warranty.
What You Need to Know Before You Buy
AHS’s warranty service plans cover up to 21 systems, and you don’t have to worry about getting a home inspection or providing maintenance records. But like most warranty companies, AHS won’t cover preexisting conditions.
When you’re trying to decide which AHS service plan makes sense for your home (and your budget) there are a few important factors to consider.
Don’t pay for coverage you don’t need.
Many plans may include items you don’t have in your home, newer items that are unlikely to require service, or items that you wouldn’t necessarily call a service professional to fix, like a smoke detector. For the best price, we recommend getting a quote for the Build-Your-Own Plan before you decide. Other home warranty companies, like Choice Home Warranty, don’t offer this.
Changing your service fee changes your monthly cost.
Every AHS plan gives you the option to choose your service fee, but you don’t get that choice for nothin’—a lower service fee will cost you more in your monthly premium. Think of the service fee like an insurance deductible: the lower your service fee, the higher your monthly payment, and vice versa. AHS offers three service fee options: $75, $100, or $125. We found that on average, lowering your service fee will raise your monthly fee by about $10; raising the service fee decreases your monthly fee by about $5.
There is a waiting period.
When you sign your AHS contract, you’ll have 30 days until your warranty goes into effect. Your first payment will be processed at the end of that waiting period. One month isn’t too long to wait, especially if you’re moving into a new house where you’re likely to discover little problems over time.
How It Works: Requesting and Receiving Service
Let’s say your air conditioning goes out. Once your plan goes into effect, you can call or go online anytime to request service for it. Within 24 hours of your call, AHS will contact an approved local contractor who will then call you to schedule an appointment.
Be ready to pay your service fee when you put in your request for service. But on the bright side, you won’t have to find your own contractor—AHS has a nationwide network of preapproved service technicians.
Once the contractor checks out the problem, they will contact AHS with the results of their inspection, and AHS will determine whether or not your warranty covers repair or replacement. If it is covered, the contractor will fix the problem at no additional cost to you.
The Fine Print
One of the main issues American Home Shield customers have with their warranties is finding out that a repair is not covered under their service plan. The easiest way to think of the fine print in an AHS warranty is to understand that you’re not getting a warranty on an entire system or appliance—you’re just getting a warranty on certain components of that system or appliance. Here are a few other fine print items to watch out for:
The AHS website may let you request service for an item that is not covered under your warranty (and you may pay a service fee at the time you request it).
If something like a water heater repair is not covered because you have the AHS Appliance Plan, then you’re out your service fee of $75 (or more) and you’ll have to pay for the repair out of pocket.
AHS warranties do not cover cosmetic issues or the repair or replacement of any part that does not “contribute to the primary function” of a covered item.
Warranties do not cover property that was damaged as a result of a malfunction. (Translation: if your laundry room floods due to a broken washer and it wrecks the hardwood floors, AHS will fix the washer but not the floors.)
AHS’s warranty plans allow for the cheapest fix possible, including the use of rebuilt parts and mismatched parts.
If the combined cost of labor and materials exceeds a certain amount ($200–$2000 per item), AHS will simply “cash out” and pay you the dollar limit (minus any expenses incurred by AHS), leaving you to foot the rest of the bill.
In short, you would be wise to read through a sample AHS contract carefully to fully understand what you’re buying with a warranty.
American Home Shield FAQs
Is an AHS home warranty worth it?
While it’s impossible to see the future, we can make some informed guesses. According to our calculations based on yearly repair estimates from Home Advisor and service call fee estimates from Angie’s List, you can estimate annual expenses for home maintenance to be around $863. Compare that to the average annual cost of an AHS home warranty—plus service fees—at about $684.
As long as you stay within or above the averages, you may save money with an AHS warranty. But if you’re worried about AHS coverage restrictions or about not using the full value of your warranty every year, you might want to consider just paying into a personal home maintenance savings account instead. Budgeting website The Balance suggests setting aside either 1% of your home’s purchase price or $1 per square foot each year to budget for home maintenance, which includes things a home warranty won’t cover, like roof repairs.
If you’re buying a home and have concerns about certain systems or appliances, you may be able to get the seller to foot the cost of an AHS home warranty. Check with your real estate agent when you’re putting your offer together and include a warranty in your negotiations.
What are American Home Shield’s ratings and reviews?
The Better Business Bureau gives AHS a rating of B, with most negative reviews having to do with poor customer service and spotty coverage on warranty items. Other expert review sites also point out consistent customer service complaints.
Most complaints are related to frustration over rejected claims or dissatisfaction with the company’s preapproved service technicians and contractors. We’ve also had customer reports of slow response times to service call requests.
What is American Home Shield’s cancellation policy?
AHS says you can cancel at any time. If you cancel within 30 days of your coverage start date, the company will refund contract fees minus any service claims. After 30 days you’ll owe “administrative fees” of up to one month’s payment, minus any “prorated contract fees.”
Is there a limit on the number of service calls or repairs I get?
There’s no limit to the number of repairs you’re entitled to, but dollar cap limits per each covered item still apply.
What appliances or systems are excluded from an AHS home warranty?
American Home Shield clearly outlines its covered items in the plan details, but like most home warranty companies some items always seem to be left out. Here’s a list of items that AHS doesn’t cover.
Window air conditioners
Outside or underground pipes and water lines, sprinkler systems
Fuel storage tanks
Fireplaces, wood stoves
Flues, chimneys, vents, exhaust lines
Bathtubs, showers, sinks, toilet lids and seats, caulking/grouting
Saunas or steam rooms
Water lines broken by roots or other foreign objects
If you’re worried about the budget crunch of a sudden appliance or system breakdown, an AHS home warranty is a good choice. Just be sure to get familiar with the home warranty policies and fine print so you don’t end up with an unexpected repair bill that isn’t covered and a monthly premium that you can’t get back.
Monthly payment options
Customer service complaints
Written by Kasey Tross
Kasey Tross is a stay-at-home mom with four energetic kids, and she's married to a security expert, so safety is a top priority in the Tross home. When she's not writing, she enjoys reading, hiking, playing the flute, helping out at church, and eating far more chocolate than she should. Learn more