How to Cancel Home Warranty in 2026 — The $600/Year Insurance That Rarely Pays Out

Last updated: February 2026 • Difficulty: Medium

⚠️ The home warranty scam (yes, scam): Home warranty companies (American Home Shield, Choice Home Warranty, First American) charge $400-800/year + $75-125 per service call, then deny claims for "pre-existing conditions," "improper maintenance," or "not covered under your plan." Consumer Reports and the BBB consistently rate home warranty companies among the most-complained-about businesses in America.

Home Warranty Pricing

Annual premium: $400-800/year depending on coverage level
Service call fee: $75-125 per visit (you pay this EVERY time, even for denied claims)
Coverage caps: Most plans cap individual items at $1,500-3,000
What's "covered": HVAC, plumbing, electrical, appliances — with extensive exclusions
What's excluded: Pre-existing conditions, improper installation, cosmetic issues, outdoor equipment, known defects

How to Cancel

American Home Shield (AHS)

Call 1-888-682-1043
Request cancellation and prorated refund for unused months
AHS charges a $50 cancellation fee if canceling within the first year

Choice Home Warranty

Call 1-888-531-5403
Cancellation fee varies — typically $50 or administrative fee
Prorated refund minus cancellation fee and any claims paid

First American Home Warranty

Call 1-800-992-3400
Request written cancellation confirmation

⚠️ Prorated refunds: Most companies refund unused months minus a cancellation fee ($50) and the cost of any claims they've paid. If they've paid out a $1,500 HVAC repair, your refund will be reduced by that amount.

Why Self-Insurance Is Better

No claim denials: You decide what to fix and when — no fighting with adjusters
Choose your own contractor: Home warranty companies send the cheapest contractor available
No coverage caps: Your savings fund has no $1,500 limit per item
No service call fees: Every home warranty visit costs $75-125 regardless of outcome
The money grows: $50/month in a HYSA earns interest — warranty premiums are gone forever

The Math: Home Warranty vs Home Emergency Fund

Home warranty: $600/year premium + $100 average per service call × 2 calls = $800/year. Self-insurance: $600/year into a HYSA at 5% = $3,300 after 5 years (with interest). The self-insurance fund covers a new water heater ($1,500), HVAC repair ($500), and dishwasher replacement ($800) — with money left over. The warranty company would have denied at least one of those claims.

🔍 Find All Your Home Service Subscriptions

Home warranties are one of many recurring charges. Upload your bank statement to JustCancel and we'll find every subscription.

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