American home shield warranty

[Lily S.]

Any thoughts - pros and cons, of using this warranty to maintain your properties would be greatly appreciated. What does your typical operating/maintenance expense look like once under this policy? Is it expensive or comparable to normal capex reserve? Thanks so much!!

[Amanda G.]

Hi Lily,

These policies have a purpose, but I personally do not like them. They are a listed policy, meaning that the repair needed has to be one on their list, not a blanket covering everything. You will still have the out of pocket cost of the equivalent of a co-pay. In my area, that's about the cost of the repair itself for basic stuff. I'd rather hold my own reserves. That said, they are popular with first time buyers who are using all their cash on the downpayment and would be sunk if one of the big things (roof, HVAC, water heater) goes bad right away. I favor personal control and keeping my own cash reserves, but your situation might be different.