American Home Shield is the largest home warranty company in the United States. In fact, they’ve paid out more than $2 billion in claims in the last five years alone. Home warranties cover you when home components break down. For instance, they can cover your furnace, water heater, appliances, etc.
As a real estate agent, I’ve seen how home warranties can benefit a homeowner. For example, I had one client who saved nearly $5,000 on home repairs during the first year of homeownership thanks to her purchase of a $700 home warranty.
However, you should still think carefully about the decision to purchase a home warranty. If you can afford to repair your home “out of pocket” that may be a more viable option.
American Home Shield Home Warranty Plans
American Home Shield has a variety of plans for you to choose from. The plan you choose depends on several factors. Let’s go over each of the plans so you can get a better idea of which one might be right for you.
American Home Shield has four main plans:
- Systems plan
- Appliances plan
- Combo plan
- Build-your-own plan
Let’s start by going over the details of each of the main plans.
American Home Shield Systems Plan
The Systems Plan covers repair or replacement of components and/or parts in 11 major home operations systems, including:
- Air conditioning
- Heating electrical
- Water heaters
- Smoke detectors
- Central vacuum
- Garbage disposals
And others. You can also get add-ons to cover your well, septic, and more.
American Home Shield Appliances Plan
The Appliances Plan covers repair or replacement of components and/or parts on 10 appliances throughout the home, including:
- Washing machines
And others. With this plan, you are eligible for the same add-ons that you are when you get the Systems plan.
American Home Shield Combo Plan
We don’t really need to go into detail about what the Combo plan covers. Basically, it covers everything that the Systems plan covers and that the Appliance plan covers.
In addition, you are eligible to purchase add-ons such as well and septic too. You get a better price when you purchase the combo plan than you would if you purchased the Systems plan and the Appliance plan separately.
American Home Shield Build-Your-Own Plan
American Home Shield’s Build-Your-Own plan is kind of like the buffet of home warranty plans. You get to choose ten systems or appliances your plan covers, choosing from the list of systems and appliances covered in their other plans.
This plan offers a great way to customize a plan to fit your specific home warranty needs.
The company also has a less comprehensive plan that might interest homebuyers and home sellers.
American Home Shield Real Estate Plan
A fifth option you can get through American Home Shield is their Real Estate Plan. The real estate plan covers buyers and sellers within the context of a real estate transaction. Contact American Home Shield’s customer service center for more details.
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Cost for American Home Shield Home Warranties
The cost of an American Home Shield home warranty varies based on three different factors:
- Type of plan you purchase
- Trade service call fee amount you choose
- Where you live
You can choose between three different trade service call fees for your plan: $75, $100, $125. The lower your trade service call fee, the higher the monthly price of your warranty, and vice versa.
Note that the trade service call fee isn’t a part of your repair cost. It’s simply the fee you pay the contractor for his or her visit to your home. Also, note that you may be responsible for costs of repairs that aren’t covered in your contract.
Each warranty lasts 12 months and you can repurchase after your contract is up. You can renew your warranty when it expires. If you need service, you can request service 24/7 online or call their service number during regular business hours.
You pay the plan fee for your service plan on a monthly basis.
The company gives free online quotes right from their website. When I typed in my Minnesota address to get a price quote, here’s what the company offered me for pricing.
- $75 trade fee, $59.99 per month for Systems or Appliances plans, $69.99 per month for the Combo plan
- $100 trade fee, $49.99 per month for the Systems or Appliances plans, $59.99 per month for the Combo plan
- $125 trade fee, $44.99 per month for the Systems or Appliances plans, $54.99 per month for the Combo plan
Other Coverage FAQs
There are a few coverage facts that you’ll want to know about as you consider an American Home Shield Home Warranty too.
- You can start requesting service 30 days after you purchase your warranty. This rule is in place to help avoid those that want to purchase the plan only when an item in their home goes out.
- American Home Shield will designate a contractor for you to use. In some cases, they may approve the use of a contractor that is outside of their service list.
- You don’t need to have a home inspection before you are eligible for a home warranty through American Home Shield.
- There is no limit to the number of repairs you can have done during your warranty contract period. However, there are dollar limit caps on some repairs.
- Your repair/replacement may or may not be covered, depending on the contractor's diagnosis and whether or not that diagnosis is covered in your contract.
- There is a 30-day workmanship guarantee on all work performed by American Home Shield approved contractors. If the same defect happens within 30 days of repair, American Home Shield will send out a contractor free of charge.
- You can cancel your home warranty, although the American Home Shield website doesn’t spell out the terms in which you can cancel.
American Home Shield Pros and Cons
Here is a summary list of pros and cons of American Home Shield.
- Flexible plans to cover a variety of needs
- Highly rated customer service team
- Covers normal wear and tear
- Covers appliances of any age
- Doesn’t cover items under a manufacturer’s warranty
- Price may be a deterrent for some
- Doesn’t cover manufacturer’s defects
Should You Get a Home Warranty?
Now that you know some of the main facts about American Home Shield, you might be wondering if it’s a good idea for you to get a home warranty.
As a realtor, I typically advise clients to consider a home warranty if the home they’re purchasing has systems and appliances that are over five years old. The last thing you want to do is to get into a home and have to replace a furnace or refrigerator the next month.
However, having a sinking fund for appliances, systems, and other home repairs can be a viable alternative too. Think of it this way. Let’s say you save $50 per month plus another $100 a year (an average trade service fee call) into a sinking fund. In just the first year alone you’ll have $700 set aside toward appliance and system replacement or repair.
You’ll have $1,400 plus interest at the end of the second year, and $2100 plus interest at the end of the third year.
Now, that amount of money might cover the replacement or repair of a broken appliance or system, or it might not. Your job is to decide which option gives you more peace of mind.