Real estate listings often mention home warranty plans as a perk to entice buyers, but what benefit do home warranties offer? While homeowners insurance covers the cost of repairing damage to a home caused by weather, accidents, fires, or vandalism, it won’t offset the financial hit caused by the failure of a major home system or appliance. A home warranty will. In fact, the best home warranties companies cover the cost of maintenance, repair, and sometimes replacement of whole-home systems and appliances included in the policy during the period the policy covers.
Home warranty companies offer a variety of different contracts. Most will offer home system contracts that limit coverage to electrical, plumbing, and HVAC systems; appliance coverage that includes kitchen and laundry appliances; and combination policies that have both. These contracts are particular. Whereas homeowners insurance policies cover everything unless the event is expressly excluded, home warranties are the opposite: If a system or appliance is not listed in the policy, it’s not covered, so it’s critical to read the policy carefully before signing.
The best home warranty companies offer a wide range of coverage options and high coverage limits. They work with reputable technicians or allow customers to select their own and provide clear, easy-to-understand conditions. A raft of add-ons to customize the coverage can also be a crucial feature. Finally, a great warranty company needs to provide options (usually balancing the cost of the premium and the per-call service charge) that work within a range of budgets. Keep reading for a curated selection of reputable options for homeowners.
- BEST OVERALL: American Home Shield
- RUNNER-UP: AFC Home Club
- BEST CUSTOMER SERVICE: Choice Home Warranty
- BEST GUARANTEE: Cinch Home Services
- BEST ADD-ONS: Liberty Home Guard
- BEST BANG FOR THE BUCK: American Residential Warranty
So, How Does a Home Warranty Work?
A home warranty company’s policy begins with the payment of an annual premium (though some companies permit quarterly or monthly premium payments). When a repair or service is needed for a covered system or appliance, call the warranty company to open a claim, pay a preset service charge, and a qualified technician will come and perform the repair or replacement at no additional cost.
The policies have coverage limits per service call, event, appliance, and year, but these will be specified so there will be no surprises. Especially if a home is older or has aging devices and systems, the cost of the premium and service charges can be significantly less than one or two service calls without a warranty.
What to Consider When Choosing One of the Best Home Warranty Companies
As home warranties have grown in popularity, many start-up companies have joined the more established warranty companies in the field. Determining whether or not a company is reliable, follows good business practices, and provides good customer service can be tricky. To make sure homeowners choose the best warranty company for their needs, they should assess those needs, consider the budget, and compare how each company handles the aspects of the contract. Checking with the Better Business Bureau and the National Home Service Contract Administration (which offers accreditation for home warranty companies), consulting friends and neighbors, reading home warranty reviews, and collecting policy quotes from several companies can make the choice more manageable.
Appliances and Systems in Need of Coverage
Home warranty policies can cover home systems, including electrical, plumbing, and HVAC, and sometimes water heaters, garbage disposals, and garage door openers. In addition, they can cover kitchen appliances, including refrigerators, ovens, stovetops, and ranges, wall-mounted microwaves and hoods, and dishwashers. They do not usually cover second refrigerators, countertop microwaves, and other small appliances. Before investigating warranty companies, a quick appraisal of the systems and appliances a homeowner wants to cover will help them compare the various options more easily.
Suppose there are appliances or systems in a home that are not traditionally covered in a home warranty policy. In that case, a homeowner should look for a company that offers add-ons to the standard policy. However, they will want to check to see how much those add-ons will cost to make sure the premium doesn’t skyrocket.
Policies and Plans
Before a homeowner settles on the first home warranty home company they come across after doing a Google search, it’s essential to compare each company’s specific offerings. Homeowners can compare each company’s policy terms, plan options, and costs, keeping their needs in mind.
Most companies will generally offer whole-home system plans, in addition to appliance, combination, and add-on plans for items not covered in the basic plans. In addition, warranty companies will offer tiers of service, including a range from basic, less-expensive packages to premium plans that are costly but include more coverage.
A great benefit of a home warranty plan is budgeting for repair and maintenance services. While the average cost per month will stay the same once a homeowner has signed a contract, that cost will vary significantly based on the home’s location, the level of coverage selected, the coverage limits, and the cost of service charges. A homeowner must know what their budget is as they begin to compare companies and products. A lower budget doesn’t necessarily mean less coverage: The total cost balances the premium, service charges, and coverage limits. For example, customers who need a lower initial cost can choose a higher service fee to keep their premium lower, which they’ll only need to pay if they actually need to file a claim. Each company will offer different packages to allow flexibility in the average monthly cost, so a homeowner will want to determine a budget before comparing options.
Most home warranty companies offer free quotes, which makes comparing the offerings easier, but the process of actually getting those quotes differs from company to company. While some companies will happily provide a quote online, others prefer that shoppers call and speak directly with an agent who can help them customize their coverage and hunt for the right combination of options. In the end, there’s a good likelihood that a homeowner will end up speaking with an agent even if they begin the application process online, as the default quote-generating system won’t ask all of the questions necessary to customize the coverage.
A homeowner needs to provide some basic information to get an accurate quote. Most reputable companies won’t give a generic quote without specific information because, without that information, any quote would be inaccurate. But this can be frustrating for people trying to get a basic idea of costs. Shoppers should expect to provide the home’s age, ownership status, and address.
Alternatively, homeowners can call the customer service line and speak to an agent instead. If a customer service agent makes a shopper feel uncomfortable or pressured, it’s a good sign that the company the agent works for isn’t the right one, and the shopper can simply end the call and move on to the next option. Usually, though, the agents are anxious to help a shopper find the right coverage level. Because of their deep knowledge of the plans and policies the company offers, they can help shoppers find a better deal on the coverage they need than they would be able to do on their own.
What happens when a homeowner needs to call for service? Each company will have a slightly different procedure, so it’s a good idea to ask specifically how this works. Nearly all home warranty companies have call centers or hotlines for customers to call when they have a claim to file, but more and more companies also have online or app-based claim filing options.
The best home warranty companies have a call center or online portal that is open 24/7. When a customer needs service badly enough to call at 2 in the morning, they need service promptly, not after the office opens in the morning. Companies will also vary regarding payment. Some companies expect a homeowner to pay for the technician. In contrast, others will have a homeowner submit a bill, and the company will pay the technician. A homeowner should compare the process at each company and be sure it’s one they’re comfortable with.
Each time a claim is filed, the policyholder will pay a flat service fee. The fee and what it covers differs from company to company. The service fee is usually between $55 and $150 and will be selected when the policy is purchased. Also stipulated in the policy is what that fee covers; most often, the fee is per event. So if a washing machine needs repair but the technician needs to order the part and return on another day to install it, the service fee will cover both visits and the cost of the part. Some companies limit how many technician visits can be covered by one service charge, after which another service charge is applied.
Comparing the service fee options and examining how they track with the premium cost can help homeowners determine their total average monthly cost. Usually, a higher premium will align with a lower service fee, and a lower premium aligns with a higher service fee, but not all companies balance these the same way. A homeowner can compare how much each plan will actually cost by guessing how many service calls they’re likely to need (which isn’t terribly reliable but can allow shoppers to compare plans evenly) and total up the service fees for that many calls plus the premium cost.
Where does the warranty company you’re considering do most of its business? Some companies are national, while others are regional, but even then, a homeowner will want to look at their coverage network. Especially if the company uses its own preapproved contractors, the service area is an important consideration. Just because the company offers policies in your area doesn’t mean they have a great network of qualified technicians. And if a home is outside a technician’s regular area, the homeowner may find themselves waiting a long time for service. With companies that allow the policyholder to select the contractor or technician, this is less of a concern but still something to think about.
Parameters for Approval
Few things are as frustrating as researching and choosing a home warranty policy only to have the company reject the claims when a homeowner tries to file them. This type of rejection is the source of most rumors that home warranties are scams. However, reputable home warranty companies include the requirements for claim approval clearly in the contract. Most home warranty companies require a 30-day waiting period after the policy purchase before a claim can be filed. This protects companies from unscrupulous buyers who note a problem, buy the policy to cover it, and then immediately file a claim.
Home warranties will not cover appliances or systems that failed before the contract’s execution date, those in disrepair, or those that have not been maintained. For example, if the furnace fails and the technician determines that the filter has not been changed for years, the company may reject the claim. One of the best ways to protect against this claim denial is to schedule a home inspection before purchasing a policy. A home inspector will assess the health and maintenance level of the systems to be covered and attest that they’re in working order, making it more likely that claims will be approved.
Those who have recently purchased a home can find it frustrating to discover that the previous owners did not maintain the house in a way that would allow for warranty claims to be approved. Some warranty companies offer “fresh start” or “clean slate” options for new home buyers, in which they’ll honor claims as long as the new owners practice appropriate maintenance after they’ve taken ownership. If this situation applies to a homeowner, they should seek out companies that provide this option.
Choice of Technician
When most people choose a technician, contractor, or repair person, they carefully vet the individuals or companies they choose. After all, the workers will be in the home, potentially digging around in the attic or basement, and homeowners want to make sure they’ve chosen someone qualified and trustworthy. Some home warranty companies allow their customers to select any qualified contractor they prefer, as long as the contractor meets the specifications the home warranty company provides and doesn’t charge more than the warranty company permits. Other home warranty companies prefer to choose the technicians and contractors themselves, both to make sure the workers are qualified and so that the company can limit their costs. If a homeowner has found a warranty company with many service professionals in their area and doesn’t already have established relationships with other technicians, this may not be a concern. Others may not be comfortable letting someone else choose who will be in their home; in that case, it would be preferable to select a home warranty company that enables homeowners to select their own technicians.
Our Top Picks
Choosing between home warranty companies can feel like a land mine, especially if a homeowner is considering a warranty for the first time. We evaluated a number of factors such as plans, pricing, claims process, and more to choose the best home warranty companies.
Why It Made the Cut: American Home Shield is an established company that offers a wide range of customizable coverage options, including several that aren’t available from other companies, in a price range comparable to companies providing fewer services.
Over 23 home appliances and various services are listed in American Home Shield’s options for covered systems, including several items that aren’t even available in the add-on packages from other companies. In addition to the expected systems and appliances, American Home Shield offers coverage for pools and spas, roof leak repairs, and coverage for code violations and associated repairs. Along with a wide range of covered appliances and systems, American Home Shield offers its clients several perks that encourage regular maintenance that makes system failures less likely. The company’s highest-cost ShieldPlatinum plan offsets the up-front cost of the plan by offering free HVAC tune-ups and unlimited air conditioning refrigerant, so clients save money on other services that would otherwise be quite costly.
American Home Shield offers warranties in every state except Alaska, with good coverage and a broad network. Its website is the weakest link, but with a bit of patience, users can find what they need or call a customer service rep for help, and the benefits American Home Shield provides more than makes up for the minor inconvenience of a slightly clunky interface.
Most unusually, American Home Shield covers the repair and reinstallation or replacement of incorrectly installed appliances as long as the installation was initially done by a qualified professional. Costs are comparable to similar competitors, but the limits on coverage are quite generous, so policyholders are getting more coverage for a similar cost.
- Plans: ShieldSilver, ShieldGold, ShieldPlatinum
- Average monthly pricing: $59.99
- Claim process: Online or phone
- Service fee: $75 to $125
- Service area: Not available in Alaska
- Coverage caps are generous
- Improper installations and repairs are covered
- ShieldPlatinum plan has extra perks like unlimited A/C refrigerant and free HVAC tune-ups
- Website is somewhat user-unfriendly
Why It Made the Cut: AFC Home Club’s phenomenal guarantee of the quality of craft and 5-year rate lock alone would have put it near the top of our list; the additional security benefits included with membership cinched it.
Round-the-clock customer service via phone, email, or online portal is the first sign that AFC Home Club takes serving its customers seriously. The easy-to-navigate website breaks down exactly what is covered and what is not and even goes so far as to provide sample contracts for each package so customers can read the fine print at their leisure before being asked to sign. The language is clear and easy to follow.
Offering warranties in the contiguous 48 states, AFC provides an exceptionally flexible stable of packages based on how many appliances and services are included or expressly excluded. In addition, the options for add-on coverage are significant, so customization is easy. Given the many opportunities to build a package that suits a homeowner’s needs, it’s not surprising that the quote process can be a bit tedious and lengthy. AFC Home Club offers members additional benefits, including free credit monitoring, discounts on home security, home appliances, home systems, and more.
Most impressive are the guarantees: AFC provides a 5-year guarantee on their monthly rate from the time of signing, so customers can accurately budget for their warranty coverage. AFC also offers a 3-year guarantee on work. This eclipses the standard 30- to 60-day guarantees provided by most companies, even though AFC allows customers to choose their own technicians, so customers know the work done in their homes will be held to a high standard.
- Plans: Platinum, Gold, Silver, systems
- Average monthly pricing: $50
- Claim process: Online or phone
- Service fee: $75 to $125
- Service area: Not available in Hawaii
- Customers can choose their own technician
- 5-year guarantee on monthly rate
- 3-year guarantee on work
- Quote process can be drawn out and complex
Why It Made the Cut: Choice Home Warranty assigns multiple representatives to each claim so customers can always connect to someone familiar with their case.
Choice Home Warranty boasts over 15,000 professional case managers to serve its clients. Multiple case managers service each claim to avoid details slipping through the cracks—any time a client needs an update or has a question, chances are good that one of the case managers will be available to help without requiring the client to tell their whole story again. This saves time and frustration at a moment where frustration is probably already high. Unfortunately, Choice Home Warranty is unavailable in California or Washington, but the other 48 states and Washington, D.C., can enjoy the lower-than-average service fee and low monthly pricing.
Most home warranty companies protect themselves from fraud by sharply limiting coverage for the first 30 days after the policy is purchased. Choice has a similar policy but does provide a waiver if a new client can show that they were covered by another warranty company immediately before the new policy taking effect. This is excellent news for those switching from another warranty company and an incentive for homeowners considering a move.
Choice does require that claims be handled by the technicians it has selected. When possible, the company will offer clients a selection of approved technicians to choose from. Its network is substantial enough that there’s a good likelihood that a technician a customer already knows may be among Choice’s options. Choice’s coverage packages are thoughtful, and while its roof leakage coverage is capped at $500, it’s one of the relatively few companies that offer roof leakage coverage at all. The range of add-on options is sizable, and of course, a customer service representative is always available via phone or online portal to guide homeowners through the process.
- Plans: Basic Plan, Total Plan
- Average monthly pricing: $55
- Claim process: Online or phone
- Service fee: $85
- Service area: Not available in Washington or California
- Relatively affordable monthly pricing and service fee
- 30-day waiting period waived with proof of coverage from another company
- Multiple representatives assigned to each claim
- $500 maximum for roof leakage coverage
Why It Made the Cut: For customers with older homes and appliances with some pre-existing issues, Cinch Home Services is a great option—it’s one of the only home warranty companies that covers appliances with rust, corrosion, and other signs of trouble from the moment the policy is activated.
There’s no waiting period before new clients can make a claim, no coverage rejection for questionable maintenance or pre-existing issues, and add-ons include high-cost items such as swimming pools, septic systems, and well pumps. These features make Cinch Home Services a fantastic option for those with older homes, homes that haven’t been well maintained in the past, and systems that might be on the brink. Three service tiers cater to different customer needs, and generous add-ons are available. If an appliance has failed, Cinch offers a replacement payout of up to $2,000, so policyholders don’t need to worry about having to replace their appliances with lower-quality items. This generous coverage does come at a cost, as Cinch’s service fees are at the higher end of the spectrum. However, the monthly price is lower than average, so the balance of cost and coverage evens out.
Round-the-clock customer service with the options for live chat online or telephone calls means there’s always a representative available. Cinch promises to respond to queries within 24 hours and guarantees repairs for a generous 180 days.
- Plans: Appliances, Built-in Systems, Complete Home
- Average monthly pricing: $32.99
- Claim process: Online or phone
- Service fee: $100 to $150
- Service area: Not available in Alaska or Hawaii
- Plans allow for coverage of pre-existing conditions like rust or corrosion
- Coverage begins immediately after purchase
- 180-day guarantee on workmanship
- Service fees tend to be higher than others on the market
Why It Made the Cut: Ideal for the homeowner with unique coverage needs, Liberty Home Guard offers packages and add-ons that aren’t found elsewhere.
Liberty Home Guard seems to specialize in doing what other companies don’t. Its three basic plans include what one would normally expect: an appliance plan, a home systems plan, and a combination plan. The difference becomes evident with a glance at the list of available add-ons. First, Liberty offers coverage for professional-grade appliances. Because pro appliances are expensive to repair and usually require a specially trained technician, they are excluded from most home warranty policies, but Liberty offers this coverage for a reasonable charge. Other hard-to-find add-ons include coverage of sump pumps, secondary spas, pest control, carpet and floor cleaning, and preventive gutter maintenance cleaning. If these services aren’t something you expect to need, then Liberty may not be the right choice for you, but if you do need them, Liberty is likely to be the only place you’ll find them.
Liberty allows clients to choose their own technician, with service fees as low as $60 per event (one of the lowest fees in the industry). The average monthly cost is a bit higher than average to balance that. Some of Liberty’s policies restrict claims for a full 60 days after purchase instead of the standard 30 to protect against fraudulent claims for events that occurred before the policy start date. If you’re considering selling your home soon, Liberty’s month-to-month contracts are another unique option that can keep you from paying for more coverage than you need. While Liberty is not available in some states, the network does stretch across the country, and the 24-hour service is available through the online portal or by phone.
- Plans: Total Home, Systems, Appliance
- Average monthly pricing: $60
- Claim process: Online or phone
- Service fee: $60 to $125
- Service area: Not available in California, Illinois, Washington, Wisconsin, and Wyoming
- Add-on coverage for services like gutter cleaning and carpet cleaning
- Special coverage for pro-series appliances
- Month-to-month contracts available
- Some plans restrict claims until 60 days after purchase
Why It Made the Cut: American Residential Warranty offers customizable plans with one of the lowest service fees in the industry and a low average monthly price, offering value at a lower cost than its competitors.
American Residential Warranty offers a robust coverage package at one of the lowest overall costs on the market. There are small sacrifices in exchange for the low rates, one being the smaller-than-average total payout limits on some claims. However, the convenience of flexible monthly, quarterly, or annual payment plans allows shoppers to budget and spread out their payments to maintain their coverage, and packages are zeroed in on what homeowners might need most. In addition to all-appliance, all-system, and combination packages, American Residential offers smaller packages such as Heating and Cooling, Kitchen Plus, and a selection of add-ons.
Taking a unique middle-of-the-road approach to the “who picks the technician?” question, American Residential Warranty recognizes that clients want to choose their own technicians. In order to maintain its reputation and low costs, the company permits the client to choose the contractor—but they have to have the contractor approved by American Residential first. This allows the company to ensure quality work while keeping costs down.
American Residential is available in 46 states and provides solid coverage with flexible payment plans at a lower cost than its competitors, making it a great value.
- Plans: Heating and Cooling, Kitchen Plus, Platinum, Platinum Premier, 3-in-1, 4-in-1
- Average monthly pricing: $55
- Claim process: Online and phone
- Service fee: $55
- Service area: Not available in California, Virginia, Iowa, and Texas
- Service fees are relatively low
- Customers can choose their own technician
- Additional electronics coverage offered
- Annual coverage cost caps can be relatively low
American Home Shield offers the most comprehensive coverage for most home warranty shoppers at a lower rate than many comparable competitors. The customization options are great, and the stability of a company offering home warranties for more than 50 years is unparalleled. AFC Home Club’s stellar guarantees and competitive services make it another solid choice for most homeowners.
How We Chose the Best Home Warranty Companies
Evaluating service providers can be difficult, especially since it’s impossible to manufacture a tangible way to test the process of using the service. In this case, we evaluated a range of home warranty companies through extensive research. To establish the top home warranty companies, we came up with a methodology that broke our assessment into concrete categories that we could evaluate and compare.
First, we chose the elements of home warranties that we wanted to consider. Coverage options, coverage limits, pricing, customer service options, packaging, and the details in the fine print were determined to be the most critical aspects when selecting a home warranty company. Next, we scoured the companies’ websites, looking for transparency, clear communication about the services provided, and their costs. Finally, we looked for elements that made a company stand out from the pack—unique aspects that took a company providing competent, reliable service and gave us a reason to look more closely.
Before You Choose One of the Best Home Warranty Companies
Homeownership is expensive. Most people budget for mortgage and insurance payments, but not all homeowners are in a position to build a large emergency fund, especially in the first few years after a home purchase. The combination of homeowners insurance and a home warranty can protect your investment and protect your finances, potentially depleted from the home purchase itself, from being wiped out by a system or appliance failure.
That said, if you are in a position to build substantial savings and can comfortably cover the cost of maintaining, repairing, and replacing the systems and appliances in your home, a home warranty may not be necessary for you. You might save some money if you have several service calls in a row, but if you don’t need the shield of the warranty to cover costs, a home warranty may be an unnecessary expense.
If you determine that a warranty is protection you’d like to have, then there’s one caveat to purchasing a policy: You have to read the whole policy before you sign. All of it. It’s not in any way entertaining, and some of it may be confusing (although if it’s too confusing, you should question why). Everything you need to know about your warranty is in that policy—every cost, every limit, every reason a claim might be rejected. You need to read it carefully so you know exactly what you’re purchasing and how to use it. If you don’t, you stand to waste a fair amount of money.
Cost of Opting for One of the Best Home Warranty Companies
Pricing models for home warranties are based on your choice of coverage, the service charge you select, and any additional coverage you add to a package. Expect to pay $264 to $1,425 yearly (or an average of $600) for a basic package. If a homeowner needs a covered home appliance assessed, they’ll need to part with an additional $55 to $150 service charge for each event.
Depending on budget priorities, a homeowner may be able to negotiate premium rates down in exchange for a higher service fee or lower coverage caps; this is especially useful if they own a home with newer appliances in good repair but still want the peace of mind a warranty provides.
The Advantages of Using One of the Best Home Warranty Companies
Home warranties provide a strong layer of financial protection for homeowners, buyers, and sellers. The cost of repairing or replacing a major home system can be astonishing and, quite frankly, ruinous, especially to someone in the midst of selling a home and buying another or a new homeowner who has just sunk most of their savings into the home purchase. Working with the best home warranty company provides several clear benefits to the policyholder.
- Homeowners are protected from the financial burden of a major system failure.
- Warranties make it easier to budget for system and appliance repair and replacement.
- Home sellers are protected from paying for unexpected repairs during the home-selling process.
- New home buyers are financially protected from unexpected (and potentially unaffordable) repairs shortly after the home purchase.
- Warranties eliminate the panic of finding a technician when a repair is urgently needed.
Home warranties are often confused with other services, such as homeowners insurance or manufacturer’s warranties. When the confusion clears, most people have a lot of questions about what a home warranty really is and what it does. These are some of the questions we are most frequently asked.
Q: What does a home warranty cover?
A home warranty covers the cost of maintaining, repairing, or replacing whole-home systems and appliances included in the policy documents. Policyholders pay an annual premium and a flat service fee per call.
Q: What does a home warranty not cover?
Home warranties don’t cover damage. If a tree falls on your home or your neighbor hits your garage, a home warranty can’t help—but your homeowners insurance can. Warranties are limited to covering events that happen due to age or natural wear and tear. Warranties also don’t cover the damage caused by a system or appliance failure, so if a pipe bursts, the warranty will cover the repair of the pipe but not the damage caused by the water from the pipe flooding the basement.
Q: How much do home warranty companies charge on average?
On average, a home warranty ranges between $264 and $1,425 a year. Service charges, written into your contract and charged each time you request a service call, range between $55 and $150. Costs are determined by what you choose to include in the warranty.
Q: Can I cancel my home warranty at any time?
Most often, yes. You’ll have to reach out to a representative of the home warranty company and write a notice of termination. Depending on the terms of cancellation written into your policy document, you may be subject to a cancellation fee.
Q: How long does a home warranty last?
Most home warranty contracts are for 1 year, although some have longer periods and a few have month-to-month contracts. Some policies include an auto-renew feature, so if you don’t plan to continue your coverage you’ll need to make sure you cancel the policy before it renews.