I get more emails from disappointed home warranty customers than I care to count.

Home warranties only apply to normal wear on your appliances and systems. They often limit how much they’ll pay, always have exclusions and never guarantee that they’ll make a repair before diagnosing the issue. But they can save you money if you know how and when to use them.

Here are seven common misunderstandings that customers have about their home warranties.

A true warranty repairs manufacturing defects, and homeowners insurance pays for items that are damaged suddenly. Home warranties do neither.

Home warranties are service contracts that cover normal wear and tear. This includes issues that pop up from everyday use and are normal for appliances and systems as they age.

A lot of people confuse home warranties with insurance because some companies advertise that customers pay a “deductible.” That’s not accurate. Home warranties charge service fees, which you pay before you know whether or not your claim has been approved. The fee isn’t a guarantee of coverage; it pays for the technician to diagnose the problem, not make the actual repair.

With insurance, a deductible comes into play after a claim is approved. It’s your share of the repair cost, and the insurance company will cover the rest.

Home warranties cover systems and appliances in a way that manufacturers’ warranties and insurance don’t. This is a good thing if you’re wanting that type of everyday-wear-and-tear coverage. But that means home warranties also have different terms. And if your claim fits with their coverage, you could save money on big repairs.

One of the ways home warranty companies make money while still paying for repairs is by limiting coverage to a certain dollar amount, known as a coverage limit. These can range from $150 to $7,000, depending on the covered item, type of repair, plan and company.

Many home warranty companies also refuse to cover certain situations, such as pre-existing conditions or wear and tear caused by neglecting to maintain your systems.

Regardless of how a home warranty limits coverage, it’s probably a safe bet that it has policies that protect the company from paying for all of the repairs you request.

Some customers have legitimate claims that can cost home warranty companies thousands of dollars. In those cases, customers benefit more than the companies and probably get more out of the warranty than the company that sold it to them.

So even though your home warranty company is betting they’ll spend less on you than you’ll pay them, that’s not always how it works out. You might save money with a home warranty instead.

One of the most common customer complaints I see is that a home warranty didn’t pay for a replacement appliance or system. Instead, the company paid a customer a portion of the actual cost to replace an item. That left the homeowner paying the rest of the bill for a replacement.

If your home warranty can’t fix your water heater, it’s not going to send you a check for whatever it costs to buy a new version of your water heater. Instead, many of them calculate how much your old water heater (or stove or dishwasher) is worth.

Similar to how cars go down in value over time, appliances and systems depreciate as well. That means your 12-year-old water heater might only be worth $100, and that’s how much a home warranty is likely to give you to buy a replacement.

It doesn’t matter that a new one could cost more than $3,000 with installation and labor. You might be on the hook for the remaining $2,900.

Even if you have to pay for labor or costs over your coverage limit, your home warranty can keep you from paying the full cost of major repairs.

Let’s say your home warranty agrees to replace your dishwasher. If the company pays $400 of the $800 price tag, you still only had to pay half of the price tag even though your plan didn’t pay for the full replacement.

If you’d already paid $876 and your home warranty paid only $400 for a replacement dishwasher at the end of that year, you’d be out at least $476. Probably more by the time you paid your service fee for the dishwasher claim.

In cases like this, you can actually save money by not having a home warranty.

Each customer will have a different set of claims, a specific plan and a mix of appliance and system models. That means no two situations are the same.

Some customers might lose money with a home warranty, but others will save money with one. If you get one or two major repair claims approved, you could come out ahead with a home warranty.

A home warranty company can make you pay a service fee and then deny your claim.

The service fee is similar to the house-call fee that a repair company might charge you when you schedule an appointment with them directly. It’s how they ensure they make some money in case you decide not to have them repair whatever they came to look at.

The difference here is who can decide if a technician is going to make the repair. If you hire the company directly, you decide if you want them to repair your water heater. In that case, you’ll probably get to apply your house call fee toward the total cost of your repair.

With a home warranty, the company decides if it wants to pay someone to repair your water heater. If your claim is denied, you could lose your service fee.

A few home warranty companies are skipping service fees, so their customers don’t pay for a technician to visit their homes. That way they’re not paying out of pocket before they know if a claim will be approved. If you consider a company that doesn’t charge service fees, check how that might affect the monthly rate compared to prices other companies offer.

Your contract has to say what your home warranty will and won’t cover. But service agreements tend to be long and full of technical language, which can make them difficult to understand. So a lot of people don’t read them before agreeing to the terms.

Look, I’m not judging. I have no idea what I agreed to when Spotify last updated its terms, but I checked that “I agree” box immediately so I could keep streaming Sarah McLachlan’s newest album without interruption.

But your home warranty company is going to follow the terms that you agreed to when you signed up for a plan. So it’s a smart move to read those terms before paying for coverage that you might not understand.

I know reading pages of fine print to find out which parts of your heat pump are covered by your plan doesn’t sound like a relaxing Saturday afternoon. But your home warranty company will quote sections of the contract to you when you ask why your claim was denied.

Knowing the policies and exclusions in advance will help you avoid frustrating situations.

Many home warranty contracts have clauses that say you can’t sue the company. Instead, you have to go through arbitration, which is a way to resolve disputes without going to court. These clauses usually keep you from filing a class action lawsuit as well.

According to the Economic Policy Institute, arbitration is worse for consumers than for companies. This is because customers tend to lose more often than the companies, and end up paying arbitration fees.

Even when a home warranty company doesn’t follow its contract, it’s difficult for a customer to prove their case because of how arbitration works. Most successful cases against home warranty companies are filed by a state’s attorney general after they’ve investigated a lot of customers’ complaints.

When a state successfully sues a home warranty company, it usually makes the news. This gives other customers a way to learn about their rights and which home warranty companies haven’t been honest with their coverage.

If you’re thinking of buying a home warranty, search for any news about the company being involved in lawsuits. And if you are having trouble with your home warranty and need a resolution, contact your state attorney general’s office to file a complaint.

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American Home Shield’s video chat lets some customers talk with a repair technician to repair small issues on their own. This can save homeowners $100 or more in service fees for each skipped service call.

But choosing video chat over an in-person appointment brings the risks of misdiagnosis and denied claims. After reading customer reviews and digging through Reddit threads about the video chat feature, I can confidently say it’s not a good option for every homeowner.

With the potential risks and limits on how the feature works and who can use it, some customers are wondering if swapping an in-person repair for a video chat is really all it’s cracked up to be. So I decided to look deeper into the home warranty industry’s newest technology and give you a look before you join a video chat.

Video chat offers more hands-on homeowners a way to potentially skip the wait and service fee that come with home warranty repairs. Using the video chat and filing a claim for a repair are separate steps. American Home Shield isn’t replacing in-person repairs with a video chat.

Video chatting with technicians might be a new feature for American Home Shield, but the process behind it has been around for a few years. Frontdoor, Inc., the company that owns American Home Shield, added video chats with repair professionals to the Frontdoor app in 2023. Now, it says it’s adding the feature to the American Home Shield app to save customers money and time if they can fix an issue on a video chat.

Depending on your situation, the American Home Shield video chat option might be a good step to take before filing a claim and paying a service fee. But like all things, there are drawbacks to keep in mind as well.

Here are a few highlights that make it worth considering:

Things to know before starting a video chat include:

You can start a video chat through the American Home Shield app on a smartphone or tablet. The app puts you in line to connect with the first technician that’s available and has experience repairing your appliance or system. For example, you’ll be connected with a plumber if you want to chat about a toilet that isn’t flushing.

Once you connect with a technician through video chat, you explain your problem, and they try to help figure out how to help you fix your appliance or system. It’s up to you if you do the repair while you’re on the phone with the technician. If the repair sounds too complicated or you’re not certain it’s safe to do it on your own, you can tell the technician. In that case, they’ll send notes to American Home Shield about your conversation, and you can submit a claim for a technician to visit your house.

The video chat won’t always connect you with a repair technician immediately. If the technician you need isn’t available right away, the app will send you a push notification to tell you when a technician is ready to chat.

The video chat holds your spot for three minutes once a technician is available. If you don’t join in time, the technician moves on to the next customer. If you miss your chance to talk with a technician, you can get back in line for a video chat, and the app gives you priority over other customers.

But why choose a video chat if you’re already paying American Home Shield to cover your repairs? Because it could save you a service fee.

Because video chat is free for customers with American Home Shield’s ShieldGold and ShieldPlatinum plans, getting a virtual diagnosis and fixing a small issue on their own could save a homeowner $100 or more on a service fee.

But that’s not a guaranteed fix. If the repair professional can’t help you through the American Home Shield app, you’ll need to file a claim for a technician to check out your appliance or system in person.

American Home Shield’s website says the repair technicians who talk with customers through the video chat feature are professionals with an average of 20 years of experience in repairs. Depending on the problem you’re having, the person will likely be experienced in plumbing, electrical, HVAC, appliance or general repairs.

An emergency, such as a burst pipe flooding your bathroom, is not the time to use a video chat. An in-person repair by a professional is likely to be what you need to save your floors from more damage.

But if you’ve got a little problem — say your dishwasher won’t run a full cycle or your garbage disposal hums but doesn’t spin — that might be a candidate for a video chat.

American Home Shield advertises the video chat as a way to save money by avoiding a service fee. So if you’re not sure if a problem is worth the service fee that you’ll have to pay for an in-person repair, you can use video chat to find out.

You don’t have to fix it yourself, even if the technician thinks you can. You can always file a claim for an in-person visit.

If it’s going to be a while before a technician can make it out to look at your appliance or system, you can do a video call instead. An easy fix that a technician can walk you through is faster than waiting two weeks for a plumber to have an opening.

This might sound obvious, but you’re going to need to be comfortable with the ins and outs of a video chat. You might need to troubleshoot your microphone or swap your front and back camera so the technician can see the problem.

If you’re confident that you can navigate a video chat, using the technology might be worth trying. But it’s probably a hard pass if any of the situations above sound intimidating.

American Home Shield says you don’t have to have tools nearby, but the expectation is that you’ll make your own repair to get the most out of the video chat.

If it’s something as simple as tightening a few screws or clicking a reset button, most of us can probably manage that. But if you can’t remember which way to turn a screwdriver without whispering “righty tighty, lefty loosey,” be honest with the technician. They can help you decide if the suggested repair is too much for you to do comfortably.

A video chat could also be helpful as a quick check that your appliance or system actually needs a repair before you commit to paying a service fee. Then you can research if your plan will cover that repair.

The repair technician can’t tell you if your plan will cover the repair you need though. Only American Home Shield can.

Video chat is free for customers with the ShieldGold and ShieldPlatinum plans, and you can use it as many times as you want throughout your contract term. Customers with a ShieldSilver plan don’t have access to the video chat feature.

As it turns out, quite a bit can go wrong. I put on my Nerd glasses, dug through customer reviews, Reddit threads and the fine print of American Home Shield’s sample contract. And there are a few things that stood out to me as potential red flags that homeowners should know.

Video chat limits how much a repair technician can see or hear, which means they can make mistakes they might not have made if they were there in person. One customer’s review shared that a video chat led to a wrong diagnosis, and American Home Shield denied the claim. The customer pushed back to get a second opinion, which found the real reason for the issue. The customer said that American Home Shield eventually covered the repair.

American Home Shield’s sample contract says customers can request a second opinion within seven days of a denied repair. But getting a second opinion means more waiting and hoping the second diagnosis isn’t by video session as well.

American Home Shield can require you to let a repair company use a video call instead of make an in-person visit.

Your hands are the ones doing the work when you use the video chat, even with a technician walking you through the repair. This is important because you could accidentally damage an appliance or system if you do something wrong, even if you’re following the technician’s instructions.

American Home Shield’s sample contract states that it covers improper repairs. So I asked the company what would happen if a customer damaged a covered item during a video chat.

“American Home Shield would not deny coverage based on an Expert interaction,” Rian Buckley Goodwin, senior director of product and strategy at American Home Shield, said by email.

But that coverage doesn’t apply to items that are already excluded from your contract, as one homeowner discussed in their online review. While on a video chat with a repair technician to troubleshoot garage door issues, the homeowner’s garage door failed and bent its track. The reviewer said American Home Shield refused to repair the track, likely because it is excluded from American Home Shield plans.

The takeaway: If you break a non-covered item while repairing a covered item on video chat, American Home Shield won’t fix it.

If video chat keeps a repair technician from seeing how bad things really are, the technician might recommend a small fix instead of solving the actual problem. The repair would be a bandaid while the real problem gets worse. In this case you could end up with a much bigger and more expensive issue later on.

For example, if a technician says over a video chat that your garbage disposal is backing up from a clogged drain, they might tell you to run some Drano down the drain to clear it out. But if the actual problem is a leaking pipe, you could wake up the next morning to warped flooring.

Even though American Home Shield has only offered the video chat option for a little over a year, customers have already taken to the internet to share their experiences with it. And they have mixed opinions about the feature.

Some customers who like the video chat feature say it’s an effective and convenient option that’s helpful for troubleshooting issues, and others say the technology works well.

A few online reviews mention the technicians on video chats confirming that customers needed to have a repair company come to their homes to repair items. And others say the video chat option helped them fix an issue quickly instead of waiting to schedule a technician visit.

But some customers feel like American Home Shield is trying to get out of doing repairs. One customer didn’t like the feature and was frustrated about having to pay a monthly fee for access to help fixing her items when she wanted a repair technician to do the work.

Other customers highlight the potential for the video chat feature to cause problems when filing claims. As with the customer reviews I mentioned in the section above, the feature can backfire if a technician misdiagnoses a problem or a video chat leads to more damage that American Home Shield then uses as a reason to deny future claims.

American Home Shield is staying ahead of competitors by offering video chats as a first step in handling repairs. While it might be helpful for some homeowners, the risk to their coverage keeps me from saying it’s a tool every customer should use.

I think video chat could be useful for customers who want more information before paying a service fee. With a professional opinion in hand, you could read your service agreement and plan details to see if the suggested repair will be covered. This might help you avoid a denied claim after paying a service fee for a house call.

Video chat is also a convenient feature for homeowners who feel up to doing lighter repairs on their own and just want the comfort of someone telling them they’re doing it right. Having the feature in your back pocket might boost your confidence in these situations.

But after more than two years of reading home warranty contracts and customers’ experiences with denied claims, I’m uncomfortable with any homeowner repairing a covered item. If you make a mistake that damages the appliance or system further, you’re in a situation that could give American Home Shield a reason to deny future repairs on the item. That’s too big of a risk for most homeowners.

My verdict: Confident and handy homeowners who understand the risks can give American Home Shield’s video chat a try. But customers who are hesitant to do more than basic home maintenance or want the reassurance of having a repair technician on site are probably better off sticking to the old-fashioned way of submitting a repair request.

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