What is a home warranty?

A home warranty is a service contract, not insurance, covering repairs or replacements for major home systems and appliances.

114 home warranty firms in U.S.

There are 114 home warranty firms in the U.S., with American Home Shield being the largest.

Home warranty ads promise coverage

Home warranty ads claim companies will replace covered items if they can't fix them, no matter their age.

“If AHS can't fix your covered item, they'll replace it, no matter its age.”

Vonda and Rick's AC problem

Vonda and Rick Perales, 20-year subscribers, faced AC repairs after their unit stopped working in June.

AC repair delays

Contractors repeatedly failed to access the AC unit due to roof access issues and claimed it was too old to repair.

AHS denied repairs

American Home Shield refused to replace the AC unit, requiring Vonda and Rick to pay $800 for Freon and buy a new window unit.

Financial impact

Vonda and Rick spent $1,205 on hotel rooms and $599 on a new AC unit due to excessive heat and repair delays.

AHS buyout

After 52 calls, American Home Shield agreed to a $4,600 buyout of Vonda and Rick's contract.

BBB rating

American Home Shield has a BBB rating of 1.28 out of 5 stars based on nearly 6,000 customer reviews.

Alternative solution

Instead of a home warranty, open a home maintenance savings account to budget for repairs.