A thermostat hovering at fifty-two degrees, a dryer full of soggy clothes—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 like American Home Shield for reassurance that their systems and appliances will be covered with a flat monthly rate—but is it really that easy?
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 your property, 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. Unlike homeowners insurance, which 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 home warranty may cover it.
American Home Shield Basics
American Home Shield has a variety of home warranty options to choose from based on homeowners’ needs. The flexible pricing is a great way to feel in control of your service plan, but coverage restrictions can be frustrating if you haven’t read the fine print. AHS works with preapproved service contractors all over the country, which limits your choices but also eliminates the need to research and find your own contractor.
A Quick Look at Pricing and Plans
Build Your Own Plan
1 or 2 years
1 or 2 years
1 or 2 years
1 or 2 years
*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 an AHS Plan
1. AHS Systems Plan
Heating and AC with ductwork
Instant hot/cold water dispensers
2. AHS Appliances Plan
Clothes washers and dryers
Freestanding ice makers
Garage door openers
Built-in food centers
3. AHS Combo Plan
All items from both the Systems Plan and the Appliances Plan
4. AHS Build Your Own Plan
Any 10 items from the Systems Plan or the Appliances Plan
Additional items can be added for $2 each per month
AHS’s warranty service plans cover up to twenty-one systems, and AHS does not require a prior home inspection or maintenance records. But like most warranty companies, AHS won’t cover pre-existing conditions.
When you visit the AHS website, you’ll see that there are four main types of service plans: the Systems Plan, Appliances Plan, Combo Plan, and Build Your Own Plan. There are a few important factors to consider when looking at these plans.
1. 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 competitors, like Choice Home Warranty, don’t offer this.
2. Changing your service fee changes your monthly cost. Every AHS plan gives you the option to choose your service fee—but at a cost. Think of the service fee kind of 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.
3. There is a waiting period. When you sign your AHS contract, you’ll have thirty days until your warranty goes into effect. Your first payment will be processed at the end of that waiting period.
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, at which time you will be required to pay your service fee. Within twenty-four hours of your call, AHS will call an approved local contractor who will then call you to schedule an appointment. 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.
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 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
Q: Is an AHS home warranty worth it? A: 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.
Q: What are American Home Shield’s ratings and reviews? A: 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.
Q:What’s the cancellation policy? A: AHS says you can cancel at any time. If you cancel within thirty days of your coverage start date, the company will refund contract fees minus any service claims. After thirty days you’ll owe “administrative fees” of up to one month’s payment, minus any “pro-rated contract fees.”
Q: Is there a limit on the number of service calls or repairs I get? A: There’s no limit to the number of repairs you’re entitled to, but dollar cap limits per each covered item still apply.
The Bottom Line
If after reading this American Home Shield Review you feel anxious at the thought of a sudden appliance or system breakdown, an AHSwarranty may be right for you. As long as you’re willing to get familiar and comfortable with the fine print, an AHS warranty can give you the peace of mind of knowing you’ll be working with a trusted service professional and paying a flat repair fee. Learn more about plans and price at American Home Shield or read up on our top picks for the Best Home Warranties.
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