A home is a major investment, and oftentimes your biggest asset — as well as a potentially big expense.

When it comes to your home, it’s not a matter of “if” a major home system or appliance breaks down, it’s when. The cost to repair or replace an appliance can be high, and home systems such as your HVAC unit can be even more expensive. To help mitigate those unexpected expenses, home warranties can help provide peace of mind — and savings.

“Homeowners are under a lot of stress these days,” says Tom Collins, senior director, public relations for Frontdoor Inc., which is the parent company of home warranty provider American Home Shield. “Inflation. Uncertainty about the economy. Declining consumer sentiment. So, a home warranty is a good way to protect your budget and bring a little bit of peace of mind for relatively low cost.”

American Home Shield is a leader in home warranties with a network of thousands of independent contractors. The company is launching a special offer of a 20% discount for veterans - anyone who currently serves or has served previously in the U.S. military.*

Military Times spoke with Collins about home warranties, what they offer and what homeowners need to know about them.

This transcript has been edited for length and clarity.

Military Times (MT): As somebody’s looking at buying a house, or buying a new house, and they’re looking at a home warranty, what are those key things that they need to look at?

Tom Collins (TC): Number one, look at the coverage. You have to do your research.

There are many providers out there. American Home Shield founded the industry and remains the largest provider in the space. You need to figure out ‘what do I really need coverage for.’ We have a basic plan that covers electrical and plumbing systems and your HVAC, and a mid-tier plan that includes appliances if you want, and then another plan that adds on things such as roof leak repair.

It’s important to look at your budget and figure out what you really want covered. Make sure you read your contract and understand what is and is not covered.

MT: Are there any red flags there when you’re looking at warranty coverages? I’m thinking “these are the things that absolutely have to be in a home warranty, and if it’s not in there, then you should probably stay away.”

TC: Yeah, say you want a plan that covers your HVAC system, those can be very expensive to repair. If you find a provider that will only cover the first $1,000 in repairs, that doesn’t go very far, so be sure to look at the coverage limits.

If you’re in a new home, you may think the appliances are all new so that’s really not an issue, but we’ve found that about 25% of new homeowners who have a home warranty end up using that warranty in the first year. It’s inevitable that some systems are going to break; obviously the older the home is the more likely that is to occur, but it happens in new homes, too.

Also, look to see if the provider has limitations on the age of the systems and appliances. Will they cover appliances and systems no matter how old they are? Do they have a workmanship guarantee? And how long is that guarantee once they’ve done the work?

MT: So, as we look at this as part of an overall protection plan for a home, how does a home warranty fit into that? What does it do that something like homeowners insurance does not do?

TC: Your home is probably your most valuable physical asset, and you obviously want to protect that with homeowner’s insurance to guard against things that may happen, like floods or hurricanes or wind damage. That’s a key point: Insurance covers what may happen.

You may never have a flood or a fire, but a home warranty protects against the inevitable breakdown of your home’s covered systems and appliances. Home insurance and a home warranty are a great combination to protect your most valuable asset.

MT: I want to talk a little bit about looking around for the best deal on a home warranty. What are those key considerations when you’re looking at cost versus coverage, things like that?

TC: On the American Home Shield website, we have a form that will ask you certain questions. Things like the square footage of your home, what items you want covered, and where you live, because these factors and more impact the price.

The AHS tool helps you lay out what you want covered, and then we can tell you what it would cost. If you want to look at other providers, I will just say, do your research, go online, look at their consumer ratings, see how they stack up. Make an informed decision based on the things that matter most to you and your budget.

MT: Is there anything else you want our readers to know about home warranties?

I would reiterate that home repair and maintenance can be expensive. Anybody that owns a home knows that, and to really guard against unexpected hits to your budget a home warranty is a high value, relatively low-cost way to protect your budget against potentially having to repair or replace an expensive covered appliance or a major system like your HVAC. A home warranty is a cost-effective way to do that.

Another important feature to highlight, with American Home Shield, we now have video chat with an expert. Through the American Home Shield app, if you’re a member of our gold or platinum plans, as a benefit you can video chat with one of our experts and talk through your problem in real time. Since we launched this feature at the end of February, we’ve seen that more than 15% of our video chats were solved right there over the phone or they gave the member the information they needed to do the repair themselves. That saved our members time and money by not having to send a contractor to fix the problem. That’s a big benefit of having an American Home Shield warranty. No other provider today has that capability at scale and it’s all through the convenience of the AHS app.

*To learn more about American Home Shield and the 20% discount for veterans, visit https://shopping.ahs.com/military