American Home Shield Review
- January 12, 2018 - Since the home warranty industry has a reputation for confused, unhappy customers, we’ve updated our review to clarify the pros and cons of a warranty through American Home Shield. We continue to think AHS is the best provider on the market thanks to its flexible terms.
Our American Home Shield Review
The home warranty industry is difficult to navigate. Contracts can be confusing, and many consumers don’t fully understand the purpose of a home warranty before they purchase one. We think American Home Shield is better than other major providers at limiting the fine print and offering flexible coverage. Its build-your-own plan allows you to focus on just the systems and appliances you’re most concerned about, rather than requiring you to pay for coverage you don’t need.
A home warranty does not equal homeowners insuranceHome warranties generally cover items inside your home, rather than your home itself. Problems with your furnace? A good home warranty will have your back. Need to replace your roof or repair fire damage? These things are typically the domain of homeowners insurance.
American Home Shield promises to protect their customers from having to pay out-of-pocket for large and unexpected home repairs, whether it’s a refrigerator that’s on the fritz or an A/C system that gives up the ghost in the middle of August. It has three set plans that cover your home’s major systems (like plumbing and electric), appliances (like dishwashers and hot water heaters), or both. American Home Shield is also the only provider we found that offers a build-your-own bundle: You can hand-select 10 systems and appliances, allowing you to exclude items you don’t actually need coverage for. (Maybe you don’t have a dishwasher, or you installed a brand-new refrigerator that’s still covered by its manufacturer’s warranty.)
You’ll pay a monthly premium that will vary depending on your exact plan. If a covered item breaks, AHS will send a technician to repair or replace the item, and all you have to pay out of pocket is a small service call fee ($75, 100, or $125, depending on the plan and premium you choose).
Is it True?
Yes. But be aware that all home warranties come with drawbacks. Most home warranty contracts, including American Home Shield, include a number of conditions that limit how and when the warranty can be applied. And like most home warranty providers, AHS gets to decide on a lot of the details:
- If a covered system or appliance breaks, AHS determines whether to repair it or replace it.
- If AHS replaces an item, it will attempt to make sure that the new model matches the old model’s “features, capacity, and efficiency.” But it won’t guarantee a matching brand, color, or set of dimensions.
- AHS makes an effort to expedite service in “emergency” situations, but it’s up to them to decide what constitutes an emergency.
- If AHS is unable to provide a repair or replacement, they’ll give you cash to complete the process on your own. In these cases, “The [cash] amount will be based on what a consumer without this contract would pay after negotiating the best price for such services in your area.”
- It’s also important to be aware of the individual coverage limits for each system or appliance. An example: Your plan covers your plumbing system — but not bathtubs, sinks, or showers. These restrictions inevitably lead to frustration when customers discover repairs aren’t covered after they need them — or that they aren’t guaranteed their exact choice of replacement. Home warranties are also considered “secondary coverage,” which means if your system or appliance is already covered by a manufacturer’s warranty, you’ll be expected to file a claim with the manufacturer, rather than the home warranty provider.
That said, if you plan around these limitations and understand exactly what you’re signing up for, a home warranty provides a cushion against worst-case scenarios. A broken fridge might cost several hundred dollars to fix; a busted heater could set you back by a few thousand at minimum. If both failures happen within the same year, paying $30 to $50 a month will save money in the long-run (and will be easier to factor into a monthly budget).
A Closer Look At Features
|Price||Varies by location and covered items|
|Covered Systems||Air conditioning, including ductwork
Heating, including ductwork
Instant hot/cold water dispensers
Built-in microwave ovens
Free-standing ice makers
Garage door openers
Built-in food processors
|Service Call Fee||$75, $100, or $125|
|Contract Length||1 year|
|Years In Business||45|
|Better Business Bureau Rating||B|
|Best For||Flexible coverage that is customized to your needs.|
|Falls short||If you prefer to select your own technicians and appliances|
Our Deep Dive
- Flexible, custom plans: American Home Shield offers three basic plans — a Systems plan, an Appliance Plan, and a Combo plan. But the Build-Your-Own option is our favorite. It allows you to pick what you want covered exactly. Over the phone, representatives will work with you to customize your policy during the quote process. One tester’s home doesn’t have air conditioning, so the rep removed that from coverage to lower her rate.
- 24/7 service requests: American Home Shield responds to service requests at any time of day or night. But they usually only pay for repairs during normal business hours (a big problem if your A/C dies on a summer Friday night). AHS will cover emergency services — but they solely determine what constitutes an “emergency.”
- Choice of service call fees: Choose between $75, $100, or $125 service call fees. Higher service fees lower monthly premiums: Testers who chose a $100 service call fee saved $9 per month over the lower $75 fee.
- Network of qualified technicians: American Home Shield’s network of over 11,000 independent contractors and 45,000 service technicians mean they can get qualified professionals on service calls anywhere in the nation.
- Short waiting period: Most home warranty companies require a 30-day waiting period before activating your policy. American Home Shield halves this, with a 15-day wait period.
- No home inspection required: Some home warranty companies require a house call from inspectors to verify that your appliances and systems are tip-top before approving your warranty. American Home Shield doesn’t — the quote process can segue directly into a policy purchase.
- Getting a quote requires patience: The online quote tool wasn’t working when testers tried it, so they called and were put on hold for nearly 10 minutes before speaking to a human. Once they did, testers report the rep was very helpful and effective at walking the tester through the different plans and restrictions.
- 180-day guarantee on repairs: AHS guarantees all repairs up to three months. If you submit a claim to fix your leaking dishwasher, but it starts leaking again a month later, AHS will waive your service fee and send a repair-person back out at no additional cost. American Home Shield’s protection here is middle-of-the-road: Many providers don’t guarantee their work at all, but there are a few providers, listed below, that offer six-month guarantees.
What Others Are Saying
Angie’s List reports that home warranty companies have the dubious distinction of being one of the worst-graded categories on their website. When we reviewed home warranty companies, we found that all of our finalists scored “B” ratings, with plenty of disgruntled customers. Even American Home Shield, despite being our favorite, fell into this category. Customer complaints typically center around denied claims, and so it bears repeating: Before you sign your contract, make sure you understand the claims process and exactly what is or isn’t covered by your plan.
Total Protect offers a six-month guarantee on all repair work: If you continue to have issues even after the problem has been “fixed,” they’ll send a technician to do follow-up work at no additional charge. American Home Shield only guarantees work for three months. TotalProtect also doesn’t place a liability cap on most systems and appliances, versus American Home Shield’s $3000-per-item limit. But there’s no option to build your own plan, which means you may be stuck paying for coverage you don’t actually need.
Sears has an impressive $10,000 cap on repairs and offers coverage similar to our other picks, plus a six-month guarantee on repairs. But monthly premiums are more expensive. The SEARS plans we received quotes for were generally about $10 more expensive than comparable quotes from American Home Shield.
First American Home Warranty lacks the flexibility of some of the other home warranty companies. Their two plans don’t cover certain systems, like air conditioning, that come standard with most home warranty companies — this coverage costs extra. But if you’re mainly interested in kitchen appliance coverage, it can't hurt to call and get a quote. Like SEARS and Total Protect, First American lacks the flexibility of a "choose your own" plan.
The DIY Approach
If you’re financially comfortable and willing to taking the gamble that none of your appliances will break down for the next year or two, you can also avoid home warranties and protect yourself from unexpected breakdowns: Saving $100 away every month in an emergency fund nets $1,200 by the year’s end, a comfortable cushion that should be enough to cover most home repairs.
But know that any route you choose is a gamble: It’s impossible to predict if or when your home systems might falter, or how much it will cost to repair or replace them. The policy quote we obtained from AHS would cost $516 annually plus $100 for every service call. If we needed to replace our $1,200 refrigerator, the savings would easily justify the monthly payout, but if our annual repairs amount to only a few hundred dollars, we’d have saved money by building an emergency account.
So is a home warranty right for you? Consider the age and value of your home systems and appliances, and determine how much money you can afford to sock away each month in an emergency fund. If a sudden equipment failure would be catastrophic to your finances, a home warranty may be the safest option.
The Bottom Line
Only you can decide if an American Home Shield warranty makes sense for your abode. Do the math, always read the fine print, and measure if the potential savings are worth the exchange of freedoms and limitations that come with any home warranty.