American Home Shield sells home warranties, also sometimes called “home repair insurance.” In exchange for a monthly fee, American Home Shield will pay to repair or replace any home appliance or system covered by your policy, like your refrigerator, stove or your home's HVAC system. You're only responsible for paying a set service fee per repair.
Overall, we found that American Home Shield's protection plans were a little too good to be true, as poor consumer ratings indicate that the company struggles to provide the service as advertised.
American Home Shield warranty: Our thoughts
In theory, home warranties like the ones offered by American Home Shield are compelling products. In exchange for a monthly fee, the provider covers all the costs of repairing or replacing major home appliances. Every repair has only a set flat service fee. The only exception to this is a maximum payout of $3,000 per appliance replaced or repaired.
If a plumber discovers a new problem halfway through a repair and it will take him twice as long as he originally thought, that extra money comes from AHS, not you.
However, American Home Shield struggles to live up to its promises. The company works with independent contractors who are assigned to service requests without customer input. Poor user reviews suggest that these contractors offer subpar service.
In cases where appliances are replaced, AHS guarantees the same features but not necessarily the same brand or quality. This may leave you with replacement appliances that are cheaper than what you originally had.
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In some cases, American Home Shield will allow you to take cash in lieu of repairing or replacing your damaged item. Unfortunately, this almost never works out in your favor. AHS pays you the amount it would have spent on a replacement, which can end up being much less than the retail cost.
To be fair to AHS, these kinds of complaints are common among home warranty companies in general.
We recommend that you avoid buying a home warranty if you can afford to pay for potential repairs out of pocket.
If you're set on purchasing a home warranty or receive one as a free incentive when buying a home, American Home Shield is as good an option as any. Compared to rivals, AHS offers competitive rates and has fewer ambiguous exceptions in its policy. For example, AHS covers damage due to neglect or misrepair, which many other home warranties do not.
What American Home Shield plans cover
Home warranties from American Home Shield only cover the items that you specify when you sign up. AHS separates these items into two categories: systems and appliances. You can choose to protect only your home's systems or appliances, select a "combo plan" that includes both, or create a custom plan that corresponds to the items you own.
Systems: No dollar coverage limit
- HVAC with ductwork
- Smoke detectors
- Ceiling fans
- Water heaters
- Garbage disposals
- Instant hot/cold water dispensers
- Central vacuums
- Rekeying door locks
Appliances: Covered for repair or replacement up to $3,000 per item
- Washers and dryers
- Built-in microwave ovens
- Trash compactors
- Free-standing ice makers
- Garage door openers
- Built-in food centers
Optional AHS Coverage Add-Ons
- Swimming pool
- Hot tub
- Guest house
- Septic pump
- Well pump
Note that replacement items provided through an AHS warranty are guaranteed to have the same features as your original device, but not the same make, model or color.
For example, a stainless steel Whirlpool refrigerator with a water dispenser will be replaced by another fridge with a water dispenser — but not necessarily stainless steel or Whirlpool branding.
Types of damage covered by American Home Shield warranty
American Home Shield covers a specific set of types of damage to your property. Any cause of damage or malfunction outside of these categories, or any damage from a specifically excluded cause, will not be paid for.
Covered damage causes include:
- Normal wear and tear
- Poor maintenance, rust or corrosion
- Improper installation or previous repair
- Unknown pre-existing conditions
The fact that AHS covers poor maintenance and neglect as acceptable causes of damage is notable. Most home warranty companies exclude damage to appliances due to neglect or poor maintenance.
American Home Shield Warranty Exclusions
American Home Shield warranties will not cover damage that's caused by:
- Misuse or neglect
- Lightning, fire or earthquake
- Manufacturer's defects
The warranty also doesn't pay for cosmetic damage, items still under a manufacturer's warranty or routine maintenance.
American Home Shield home warranty cost comparison
To understand how the cost of American Home Shield stacks up against its competitors, we collected sample prices from AHS, Sears and TotalProtect. We found that American Home Shield's monthly rates were competitive with other home warranty companies who offered similar plans.
Customer service reviews of American Home Shield
American Home Shield has troublingly negative reviews regarding its customer service. Many consumer complaints describe problems with the contractors that AHS hires, including lack of expertise and lengthy delays caused by frequent disagreements between the contractor and AHS.
Users also note frequent difficulty in contacting AHS throughout the service request process, citing long telephone hold times and technical difficulties on the company's website.
While American Home Shield's customer service department is open 24 hours, many of the contractors they work with are not.
This effectively limits service to regular business hours.
Some customers reported a positive experience with American Home Shield, and a few remarked on getting a brand-new high-quality appliance for little or no cost. However, the reason for purchasing a home warranty is to reduce uncertainty and provide peace of mind, and the inconsistency of customers' experiences make the service difficult to recommend.
AHS Home Repair Insurance vs. Homeowners Insurance
American Home Shield's home warranty and a standard homeowners insurance policy both protect you from excessive costs when your home is damaged. However, they cover different parts of your home and insure your property for different types of damage.
For example, homeowners insurance covers a leaky roof while an AHS warranty does not.
As such, a home warranty is not a replacement for homeowners insurance (and vice versa). Whether you buy homeowners insurance and whether you buy a home warranty are separate decisions that you should make independently of one another.
What Homeowners Insurance and Home Warranties Cover
|What's Covered?||Homeowners Insurance||Home Warranty|
|Systems and appliances||Yes||Yes|
|Causes of Damage||Disaster||Yes||No|
|Wear and Tear||No||Yes|
|Neglect||No||Yes (AHS, not all companies)|
Neither homeowners insurance nor home warranties are legally required in any state, though most mortgage lenders require you to buy home insurance to qualify for a loan. We recommend homeowners insurance under most circumstances, as it can save you hundreds of thousands of dollars if the worst happens; meanwhile, a home warranty will pay out a few thousand dollars at most.