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I Have been a customer of AHS for over 3 years, and have paid on time every month. My contract states that my water heater and components are covered. The components under my contract are what CNJ call modifications. Yet AHS does not pay for modifications. Modifications *** /components are one and the same.

I refuse to pay CNJ any monies for any so called modifications which are components that really come with the water heater, according to several plumbers I called, as well as the company that installed my new water heater. They blamed AHS, and AHS blamed them for their price gouging. I am not into the blame game or into being gouged. I wanted a new water heater, not the run around of who pays what. The modifications which are really components were given to me as follows:

1. $85.00 Gas valve – a code requirement ( it’s an existing heater not a new install, so there is already a valve)

2. $85.00 Gas line - I was under the impression I already had a gas line from the old unit

3. $85.00 Drip T - another code requirement- (which surely was already in place in order to get approval from the permit it was required to have when it was originally installed)

4. $85.00 Vent Line Modification – Why? There is already a vent, and didn’t need to be modified at all even though my new heater was taller.

5. $125.00 Ball Valve Modification – came with the new water heater, not an additional fee

6. $125.00 Water Line modification – already has a water line that works fine.

7. $125.00 Temperature and Pressure line modification – What the *** Seriously

TOTAL $715.00 – which did not include the water heater, the labor to install or the disposal. Not to mention I paid $125.00 for them to come out on Thursday 08/16 and take a picture of the unit and send it to you in a queue on line. Couldn’t even call it in to get results right away. Then I was called on Monday 08/20/18 by Roslyn who provided me with CNJ’s additional charges. I refuse to aid in their price gouging of your customers.

I emailed in my receipt to their claims line as requested on 8/23/18 and they said it was just received on 9/4/18, and that it will take another 7-10 business days to get the check.

THis company has a customer service department that has difficulty speaking english and gives you the circus run around. I will no longer do business with them. ***

Product or Service Mentioned: American Home Shield Water Heater Warranty.

Reason of review: Problems with payment.

Monetary Loss: $750.

Preferred solution: Full refund.

American Home Shield Cons: No real care of customer service.

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This info may not be helpful to you to understand the warranty business model, but here goes. Maybe another customer will find this useful or at least understand why things are this way.

Home warranties force their vendors to adhere to an artificially low pricing average. All the work orders assigned to the vendor are averaged, and the average cannot exceed around $120 for the Plumbing trade. It’s around $200 for the HVAC trade. That means that if a water heater replacement job costs $1200, which is a reasonable amount a plumber would charge under normal retail circumstances, the AHS plumber will only be able to bill AHS $120 for the entire job, including the water heater, in order to remain as their vendor.

AHS doesn’t want more than one or two vendors in a 150-200 mile radius. They find 2 small plumbers, and give them all their calls, swamping them with call volume. With artificially low billable averages, the contractor has to look elsewhere for his money: the customer. The expenses you listed are legitimate necessities on a water heater installation.

The plumber can’t possibly absorb AHS’ costs and yours too. In the private sector, a profit must be made. AHS is wrong to hold the contractor to artificially low rates, but it is no different than a doctor who works for a health insurance company. The doctor has to waive much of the bill in order to service the patients with insurance, or not accept the work.

In the case of the AHS contractor, warranty work cannibalizes the retail business model, because of the high call volume and the negative feelings associated with home warranties. The plumber or contractor becomes totally dependent upon warranty work, and expands the workforce and fleet accordingly, but still has to cut corners to stay afloat, due to the extremely low profit margin. Remember, if there is no profit, there is no point in remaining in business.

If the contractor goes under, AHS will find another plumber willing to cut his own throat. There are always plenty of warranty customers, because even after reading all these negative reviews, people will still buy the plans, and realtors will still offer them on home sales.

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