16 things your home warranty probably doesn’t cover

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16 things your home warranty probably doesn’t cover
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When things go bump at your home, who ya gonna call? If your answer is, “My home warranty company,” we’ve got a few things you should know about that may be excluded from your policy!

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American Home Shield is the leading home warranty provider

According to the National Home Service Contract Association, there are more than a dozen big players in the home warranty industry.

American Home Shield (AHS) — the industry leader with more than 1.7 million customers in 49 states — says it has spent in excess of $2 billion over the past five years on covered service requests.

AHS home warranty plans start at $34.99/month ($419.88/year) and top out at $59.99/month ($719.88/year), according to a mailer one of our team members received at home.

You’ll see that each plan has a deductible, called a “Trade service call fee option” in this case. You’ve got to pay that to the repairman who shows up at your home each time you use your warranty.

american home shield prices

With AHS, you can get coverage on the appliances in your home, the systems in your home or both. There’s even a policy rider you can have as an add-on that will cover your pool!

But what are you really getting for the money? We took a look at what’s covered and what’s not in a sample contract and found some noteworthy exclusions you should know about before you purchasea home warranty. To its credit, AHS boldtypes the items and events that won’t be covered by its contract.

So, while the following list is specific to one provider, it should open your eyes to the fact that some things in your home that you would think would be covered might not be.

Forewarned is forearmed if you’re thinking about buying or renewing a home warranty.

The following items are not covered:

  1. Window air conditioning units
  2. Fireplace, grain, pellet or wood heating units — even if they are your sole source of heating
  3. Alarm system wiring
  4. Telephone wiring
  5. Plumbing lines that become broken, infiltrated or stopped by roots or foreign objects
  6. Septic system sewage ejector pumps are not covered — unless you purchase optional coverage
  7. Extra holding or storage tanks for water heaters
  8. Doorbells that are part of an intercom system
  9. Freestanding freezers
  10. Wine chillers
  11. Garage door track assemblies
  12. Removable accessories from built-in food centers
  13. Portable or above ground spas
  14. Ornamental fountains
  15. Above or underground piping for wells
  16. Broken or collapsed sewer lines outside the foundation

Clark’s take

Money expert Clark Howard isn’t a fan of warranties in general, but that distaste goes up to the umpteenth degree when it comes to home warranties!

This quote says it all:

“Home warranties aren’t worth the paper they’re written on.”

Why such a bold statement from Clark? In his 25+ years on the radio, the consumer champ says he’s “never taken a call where the [home] warranty was a good thing. It’s almost always a bad thing. You pay for peace of mind that is a mirage.”

“If something goes wrong in your home, the warranty companies are brutally difficult to deal with,” Clark continues.

“They require you to use their contractor only. That contractor may or may not come on schedule while you’re burning up in the heat of summer without AC or freezing in the dead of winter without heat. And then you’ve got a deductible on top of that!”

Instead of buying a home warranty, the penny pincher’s preferred alternative is for you to set up your own slush fund for unexpected home expenses. Start today and keep contributing to it on a monthly basis. Just $50 a month will turn into $600 at the end of 12 months. Then, you have that money the next time something breaks.

One exception to Clark’s ‘no home warranties’ rule

That said, Clark does have one exception to his rule that you shouldn’t buy a home warranty — and it’s when you’re selling a home.

“If you are selling a home, you are a merchant trying to give the buyer a sense of confidence about your used home. So for peace of mind you spend $400 on a piece of paper that’s not worth anything,” Clark says.

It just may give you the edge as a seller trying to entice a buyer in a tough market. According to one study, homes that come with warranties sell 11 days quicker and for an average of $2,300 more than those without.

Read Clark’s full take on home warranties here.

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