Americans Beware: American Home Shield is a Rip-off

Reading this could save you considerable money and even more aggravation.

It all started with a mailing from my home mortgage company. Inside was an extensive invitation for me to sign up with American Home Shield. It grabbed my attention. After all, it sounded so sensible. For a monthly fee of $39 I would have the ability to call for service whenever virtually any home appliance or equipment - from plumbing to a furnace to a refrigerator and more - was not working. I would have to pay $55 for the service call, but then I would be entitled for whatever repair was necessary or - and this is the real enticement - actual replacement of the equipment if it could not be repaired.

This company's home warranty type product almost sounds too good to be true. And you know what that means. They promise fast and expert service. After all, we know how difficult it can be to get a first-rate repair person that you can trust. And here was a well established national company offering a service that my own mortgage company was urging me to buy.

Being somewhat cynical about the business world I decided to do some research on the Internet. I learned some interesting things about this company. It has been in business since 1971. It boasts that it serves 1.2 million homes today and handles 3 million service calls per year. A major part of its business is selling home warranties to purchasers of homes.

Clearly, it must pay mortgage companies for new customers obtained through the kind of marketing pitch I received. I also discovered that AHS has ties to the National Association of Realtors. Any member of NAR can obtain a $50 savings certificate for use at certain companies owned by ServiceMaster, the parent company of AHS. And if a NAR member sells a AHS warranty to a home buyer client, on the agent's behalf AHS provides the buyer with a $50 ServiceMaster savings certificate.