The Best Home Warranty
Get reassurance on your biggest investment — as long as you read the fine print
The right home warranty policy can ensure you won’t get caught needing to foot the bill to repair or replace large appliances, like your refrigerator, or major household systems, like your septic tank. If our refrigerator stopped working in the middle of the night, the last thing we’d want to worry about is whether or not we can afford to fix it.
So, we dug in to find out if a home warranty policy is really worth it, who it’s best for, and which companies you should consider. After spending 180 hours researching the industry, our team concluded that American Home Shield (the industry leader for years) and The Home Service Club (our personal favorite) are two of the best.
The home warranty industry as a whole doesn’t have a very stellar reputation. Most of the sour reviews stem from misconceptions about how home warranties actually work and misrepresentations about what the policies cover. That peace of mind homeowners have quickly dissipates when they’re forced to pay out of pocket for a household fix they thought was covered. But that’s not the whole story.
We surveyed realtors and general contractors, compiled a list of more than 60 providers, evaluated the coverage options of every one of their plans, went through the quote process of more than 20 of our top contenders, spent 5 hours on the phone with sales reps, and read a whole lot of fine print. In the end, we found that home warranties are a good idea for prospective home buyers and sellers who want reassurance on their new investment, for homeowners with appliances that may need to be repaired (but not replaced), and for homeowners with multiple properties.
Here are four of the best home warranty providers:
- The Home Service Club (Best Overall)
- American Home Shield (Best Reputation)
- America’s 1st Choice Home Club (Best Phone Quote Process)
- First American Home Buyers Protection (Most Well-Rounded)
Our other top picks:
How We Found the Best Home Warranty Companies
We knew we’d need to get our hands on some contracts and compare the purchase experience with multiple companies in order to really figure things out, so our research team spent a full week compiling a list of home warranty providers, comparing their coverage plans, and gathering key data about each company.
With more than 100 hours of research behind us, we started to narrow our list of 65 companies down to the top contenders.
First, we cut any home warranty companies that focus only on particular appliances or systems.
Some home warranty providers focus exclusively on certain appliances or systems. For example, some of the companies we examined only cover basic appliances, while others only service big-ticket items like septic tanks or roofs. The average homeowner will want access to a variety of coverage options, so we cut any home warranty company that did not provide comprehensive coverage options that included both appliances and major household systems.
Second, we cut any home warranty companies that aren't available nationwide.
Availability was an important factor for us when we went through our review. A company might offer great plans and flexible coverage options, but if the service is not available in your area, it’s obviously not the best option for you. Half of the home warranty providers in contention were available in fewer than 25 states — and 16 providers only offered service in 1 or 2 states.
Regional and local companies may have competitive plans, but because they serve a limited population, we can’t recommend them to everyone. And for that reason, we chose to remove home warranty providers that aren’t available in all of the lower 48 states.
A Note on Availability
Our research team went through the quote process with 22 of the top home warranty providers. All of these contenders claimed to offer service in at least 48 states, but as we went through the quote process, there were several instances where we could not find coverage for a number of major cities in states that were supposedly covered.
Even though those companies claimed to offer service nationwide, there were clearly significant gaps in their coverage. Ultimately, we decided to allow companies that claimed nationwide coverage to pass this round of cuts, even if we had problems getting quotes in some states where they claimed to offer service.
Then, we cut any home warranty companies that are primarily affiliates.
One of the most unexpected discoveries of our research was the intricate web of relationships between home warranty providers. As we worked through the quote processes, we had instances where smaller providers redirected us to larger companies; parent companies redirected us to regional affiliates; and there were a few companies where we were never able to completely pin down which organization would actually be responsible for the coverage.
Most of these companies were legitimate businesses that were fairly transparent about their relationship to other home warranty providers; however we also came across a few websites that presented what seemed to be legitimate, nationwide businesses, but when we looked closer were clearly lead-generation sites. These companies had no social profiles, no identifiable management team, and were not licensed in any of the states that require licensing. For example, when we called the primary “Get a quote” phone number listed at the top of Select Home Warranty, the person who answered the phone said she was with the claims department and when we inquired about wanting to purchase a new home warranty, she gave us the phone number for America’s 1st Choice Home Club, a completely different company.
When you purchase a home warranty, you sign a contract with a specific organization — and that’s the provider you’ll turn to when an appliance breaks down. Any affiliate or lead-gen company you interacted with along the way has no obligation to help you and won’t be there to solve your problems.
Because of this, we decided to exclude organizations that primarily act as affiliates or lead generation for other home warranty providers.
Only the home warranty companies with the best coverage options, quote process, and reputations made our final cut.
Before we moved forward and actually purchased a few home warranties, we wanted to make sure we were identifying the top providers. Our research team created a test that enabled us to evaluate and score the remaining contenders based not only on data, but also on our own personal experience with each company.
The test was based on the following criteria:
- Coverage Options: We compared the appliances, systems, and additional add-ons that are available in comparable plans from each company. Companies with relatively generous coverage options received higher scores.
- Quote Process: Our research team went through the quote process (both online and on the phone) for each of the top contenders. For their online quotes, companies received a score based on the quality of the site, access to information, and overall easiness of the process. For the phone quotes, providers were rated based on how long the quote took, whether we were sent through an automated system or spoke with a real person, and the easiness of the process.
- Public Opinion: In order to approximate general public perception, we gathered customer-satisfaction scores from sites like Angie’s List, and ratings from the Better Business Bureau (BBB). Home warranty providers received a Public Opinion score based on these inputs.
We excluded five contenders based on the weighted Coverage Options, Quote Process, and Public Opinion score. After extensive interaction with each company, we were well-prepared to make our recommendations.
Our Picks for the Best Home Warranty Companies
The Home Service Club stands out for superior coverage. When we compared the appliances, systems, and add-ons offered by each of the top home warranty providers, the Home Service Club received the highest score for coverage. This is quite an accomplishment for the brand, since it’s a relative newcomer to the industry; it has only been in business 7 years, while some of its competitors have been in business more than 40 years.
Coverage with the Home Service Club also kicks in much sooner than with other providers. Home Service Club coverage begins 10 days after you purchase your home warranty. This may seem a like a long wait to some, but with many other home warranty providers, coverage doesn’t kick in until 30 days after you buy a plan. Though the Home Service Club doesn’t offer an appliance-only plan, which some homeowners like for its relatively low price tag, its entry-level plan is competitively priced, especially for the exceptional coverage it offers.
There’s one area where the Home Service Club could use a little work — public opinion. The company has a respectable B+ rating on the BBB, but it’s got a C on Angie’s List. Our experience with its site was great though. We purchased a Standard Coverage home warranty from the Home Service Club website. The website isn’t fancy, but the user experience is intuitive and we were able to buy the plan without a hitch. We received a confirmation email right away that had our contract number, our Home Service Club username and password, a link to the login page, and a link to view the contract. The confirmation email was helpful and clear and we were able to immediately log in, view the details of our account, and file a claim. Overall, our experience with the Home Service Club was extremely positive.
American Home Shield founded the home warranty industry and has been in business for 44 years. It stands out for its positive public opinion and strong ratings on both Angie’s List and the BBB, and was one of only three home warranty providers who had easy-to-locate business licenses in all of the states that require them.
American Home Shield offers four different coverage plans, including packages that cover appliances only — which is a great option if you aren’t worried about larger household systems like heating and AC. Any contract with American Home Shield won’t kick in until 15 days after the purchase, which isn’t ideal, but it still beats the 30-day industry norm.
When we purchased an American Home Shield warranty, there were a few things we didn’t like about our experience. For example, the confirmation email informed us that we would not be able to review our contract until coverage started, 15 days after the purchase. It did include a link to a sample contract, but that didn’t sit well with us — we couldn’t view our actual contract, even though we’d already signed it.
We also didn’t get any information on how to file a claim. We tried to contact the American Home Shield using the generic form on the website, but we haven’t gotten a response (34 days and counting). We also called the phone number listed on the site multiple times; the line either just rang and rang or we reached a voicemail that said, “We are temporarily dealing with interruption to our phone service. Please call later.”
Despite our subpar purchasing experience, when we consider all the data and the positive public perception about American Home Warranty, we recommend it as an industry leader that is still worth considering.
Best Phone Quote Process
America’s 1st Choice Home Club is another relatively young home warranty provider; it’s only been in business for six years. But the company has grown quickly and already provides service in all 50 states.
When you get a quote from America’s 1st Choice Home Club on the phone, you actually speak with a real person and you’re not forced through an automated system. We appreciated that. The company also has a relatively low standard service fee of $60, but unfortunately contracts don’t kick in until 30 days after the purchase.
First American Home Buyers Protection is another stalwart of the industry that has been providing home warranties for more than 30 years. In our comparison of coverage, quote process, and public opinion, First American stood out for consistency. It did not rank the highest in any particular category, but it was competitive enough in each area to earn one of the top overall scores.
Though the company provides coverage in 48 states, we had trouble with its online quote tool. Even when we tested multiple addresses in several major cities across the United States, we weren’t able to successfully complete a quote online. The quote process by phone was much easier, and its entry-level plans are among the most affordable in the industry; they come in at just $288 per year.
What We Learned While Researching the Home Warranty Industry
At the outset of our research, we assumed that home warranties were similar to auto insurance — everyone should have coverage, and it can really be worthwhile to pay for the most coverage you can fit into your budget.
However, after researching the industry, we made two important discoveries. The first is that the home warranty industry doesn’t have a stellar reputation, and the second is that, when doing the math, a home warranty may not actually be the right choice for everyone.
Gregg Cantor is the fourth-generation owner/CEO of Murray Lampert Design, Build, Remodel; Vice Chairman of the Board of BBB San Diego for 20 years; and co-host of The Home Pro Show.
When reviewing a home warranty coverage plan, sometimes you have to account for resulting fallout work. For example, cabinet modifications when replacing built-in appliances due to changes in size/configuration, or concrete work covering an in-ground pipe.
With the added electrical components to newer appliances, especially Energy Star-efficient appliances, it’s made it more difficult to repair if you are not a trained and certified factory repair specialist. Attempts on your own may void the appliance/system warranty.
If you’re buying a new home, ask the selling realtor to select your own plan for them to purchase. If the home is already covered by a plan, ask the existing provider for a list of contractors that would be servicing your ZIP code and make sure they are licensed and bonded according to state laws.
The industry reputation needs improvement.
After reading hundreds of online reviews from happy and unhappy customers, we found that misunderstandings about what home warranties actually cover were at the heart of many customer complaints. Some homeowners seemed to have the impression that a home warranty was a fast-pass to all-new appliances, which is absolutely not the case.
To be fair, there is a lot of room for improvement in the home warranty industry when it comes to transparency. After immersing ourselves in home warranty research for several weeks, it was easy to see why the casual consumer might think they’re getting more coverage than they actually are: Most contracts are really tough to digest and critical contract details are buried deep in the fine print.
The most satisfied home warranty customers were the ones who had appropriate expectations about what their home warranties actually covered. That means you’ll have to read all the fine print and ask a lot of questions before you sign a contract.
Common customer complaints about their home warranties:
- Pre-existing conditions: If your appliance has already had work done for a problem, it probably isn’t covered. That means that home warranties on older appliances tend to be less valuable than on appliances that are brand-new. This is also why it’s a good idea to ask about any repairs that have been made on appliances in a home you’re considering buying.
- Waiting periods: If your dryer breaks down just a few days after you’ve purchased your warranty, you may feel like you got lucky — unless you purchased a home warranty that has a waiting period of 30 days or more.
- Deductibles and other fees: Like other forms of insurance, home warranties generally have a deductible that must be met before coverage kicks in. In addition, you’ll have to pay a service fee when a contractor visits your home for the first time. The service fee is paid out of pocket and ranges from $50–$125 depending on the provider.
- Upfront payment and long reimbursement windows: Even if your home warranty covers the bulk of the repairs, you’ll still have to pay for them up front at the time of the fix, which means you’ll need to have a savings or a line of credit to cover the cost. You may find yourself waiting two to three months to get recouped.
- Limited service provider network: Some home warranty providers allow you to select your own contractor when an appliance or household system needs repairs, but in many cases, homeowners are restricted to a specific network of contractors and service repairmen associated with the home warranty provider. A limited network may mean you have to wait longer for repairs, while an under-qualified network may leave you with a subpar fix.
We surveyed a panel of 15 experts to get their input on home warranties. All of the experts we reached out to are industry professionals with considerable experience. We allowed them to submit their survey answers anonymously, as we’ve found that the most honest perspectives often come from unnamed contributors.
Why do some consumers have a negative impression of home warranty providers?
“Because [home warranty providers] try to find ways not to honor claims and the process is purposefully complicated in the hope that homeowners will eventually give up and no claim will have to be paid. Also, in smaller communities and rural areas, warranty companies do not have adequate providers to cover service calls.”
Reviews.com Realtor Survey
“[Home warranty providers] are unwilling to have good, reputable contractors that do understand what is involved in running a profitable business, that deliver quality, on-time, professional services to participate due to their extremely low pricing thresholds.”
Reviews.com Contractor Survey
“Because homeowners don’t realize all the exclusions and the quality of contractor due to the pay scale is not always good.”
President/CEO of Murray Lampert Design, Build, Remodel
“[Home warranty providers] don’t explain the full parameters of their policy and buyers don’t realize what ‘like kind’ is. Or they don’t realize if they buy in a remote area, the company may not have service representatives in the area that their home was purchased.”
Reviews.com Realtor Survey
“They continue to deny claims they shouldn’t. Must be more thorough with information on what they cover and don’t.”
Reviews.com Realtor Survey
Reviews.com Realtor Survey
Home warranties are better suited for certain homeowners.
During our research, it became clear that a home warranty can be an excellent option for certain types of homeowners. It also became clear that there are instances where a home warranty may not be the best option.
When a home warranty is a good fit:
- Prospective home buyers and sellers. Though home warranties are largely advertised as consumer-facing products, the truth is that one of the main reasons people buy a home warranty is to help their house sell faster or appear more attractive. According to a 2014 industry study, homes with warranties spend approximately 11 days fewer on the market and sell for more than $2,300 more, on average. That’s far more than the average cost of a home warranty and could definitely be worth the price if you’re trying to sell. As a buyer, a home warranty is an added bonus, because it ensures the appliances that come with the house are covered, regardless of their age. A home warranty is especially appealing if it covers extra household items, which may be costly to replace, like an in-ground sprinkler system.
- Homeowners with appliances that may need to be repaired, but not replaced. Here’s the tricky part about appliances: They all have a different lifespan. While a refrigerator can easily last 10 years or more, a washing machine tends to start to break down after just five. Part of this is due to user error — caring for your appliances can increase their lifespan by several years — but it’s also just the nature of owning a home. If your appliances are old enough that they’ll need repairs soon, but not so old that you want to replace them, a home warranty could save you big money on the repairs, especially if several appliances malfunction in a single year.
- Homeowners with multiple properties. If you’re regularly renting out your home through a service like Airbnb or have multiple rental properties, your appliances are going to have added wear and tear, and replacing them regularly might get costly. A home warranty can be a good investment in these situations, because it will ensure that if something goes wrong, you’re not out of business while you’re waiting to pay for repairs.
When a home warranty may not be the best option:
- Buyers of brand-new homes. A newly constructed home should already have coverage in the form of a builders warranty, which usually lasts for two to five years. For this reason, an additional home warranty is unnecessary.
- Homeowners who are looking to remodel. Unlike car insurance, which can sometimes help vehicle owners afford a new car after an accident, home warranty companies tend to push for repairs over replacements. If you’re looking to replace your appliances, a home warranty is not the way to do it — not only will you be spending money you don’t need to spend on the annual rate, but also you won’t be able to get the new appliances you want.
- Homeowners with appliances that are very old or very new. Similarly, brand-new appliances are most likely covered under their own warranties. And because it’s unlikely that they’ll begin to have troubles for several years, you probably don’t need to add extra coverage. Conversely, if your appliances are very old, you may be better off saving your money for replacements, not repairs.
We surveyed a panel of 15 experts to get their expert input on home warranties.
Based on your experience, do people generally benefit from home warranties?
“Yes, and I call for it every time I write an offer and prepare my sellers to expect to be asked for it.”
Merit Co Inc, Broker Associate
“I believe generally people benefit from home warranties as long as they are persistent.”
President/CEO of Murray Lampert Design, Build, Remodel
“In my experience, it’s about 50/50 regarding buyers who benefit and buyers who don’t.”
Reviews.com Realtor Survey
“Yes, but not all items are best for all customers. Some items like hot water heaters, air conditioning units, heating units, stoves/ranges, big TVs that are valued in the thousands are good items to have a warranty.”
Home Repair 83 Owner
“Yes. Many of my clients keep their rental homes covered to avoid high costs for which they may find themselves unprepared.”
Reviews.com Realtor Survey
“Based on 33 years in the residential home services industry — including the feedback of hundreds of clients with home warranties — the clients are extremely disappointed in the quality of the contractor and the good contractors do not wish to participate with the home warranty companies due to their inability to pay what is needed for a good, reputable contractor to stay in business.”
Reviews.com Contractor Survey
“Yes, when done properly the prospective buyer is informed on the condition of the property.”
Reviews.com Realtor Survey
Is a home warranty right for you?
For many homeowners, the decision to purchase a home warranty is a no-brainer. The peace of mind that comes with being protected against unexpected expenses is well worth the monthly or annual premium.
But unless you’re willing to break out a spreadsheet and conduct some financial analysis, deciding whether or not a home warranty is a wise financial decision can be a more challenging matter. Each appliance and system has its own life expectancy and costs associated with repair or replacement.
We developed a tool to help you visualize the replacement costs associated with the most common appliances and systems.
Other warranties may already have you covered.
One question homeowners often have is whether or not their existing coverage, or the coverage that came with their individual appliances, overlaps with their home warranty. Gaps in coverage can end up being extremely costly — whereas paying for too much coverage is a waste of money, as well.
Home insurance, which a lot of homeowners have, covers your house itself against natural disasters, thefts, or other accidents that could cause damage to the structure or the interior. And while it might help you buy a new television if yours is stolen in a break-in, it doesn’t cover repairs to appliances, and therefore, doesn’t offer much in the way of overlap. It’s a good idea to have a home insurance policy even if you don’t get a home warranty to cover your individual appliances.
Home builders warranty
A home builders warranty, however, does cover many of the same things as a home warranty. These warranties usually come with newly constructed homes, and exist to ensure that consumers aren’t getting a raw deal when purchasing a new house.
According to the FTC, new homes typically come with warranties that “generally offer limited coverage on workmanship and materials relating to various components of the home, such as windows; heating, ventilation, and air conditioning (HVAC); plumbing; and electrical systems for specific periods.”
They do not cover appliance repairs, though — but since all of the appliances will likely be brand-new and covered under the manufacturers warranty, an additional home warranty probably isn’t a good fit.
If someone just bought a brand-new home with all-new appliances and systems, they might not need a home warranty — if anything does break down, it should be covered under a builders warranty.
In a new home, it’s possible that the appliances, which are most likely also new, are still covered by their manufacturers warranty. In this case, you may not need a home warranty at all, because your appliances and your home are covered. If they aren’t already covered, even a basic home warranty will cover most appliances.
The best way to decide which coverage you need is to carefully read any warranties that came with your house or your appliances to determine exactly what is covered. Then, look for gaps in coverage and establish how best to fill them.
Best Home Warranty Companies: Summed Up
Home Warranty Companies
|The Home Service Club||
|American Home Shield||
|America's First Choice Home Club||
Phone Quote Process
|First American Home Buyers Protection||
More Home Warranty Reviews
We’ve been digging deep into home warranties for several years now, and we’ve started publishing additional reviews. However, we haven’t finished updating them to be consistent with our latest round of research. Be on the lookout for updates in the upcoming weeks.
Read a few sample contracts: It’s tempting to skim through lengthy service agreements, but when it comes to home warranties, the best way to ensure you don’t get stuck with an unexpected bill is by taking the time to read the fine print of your contract. Reading through a few sample contracts (The Home Service Club, American Residential Warranty, and American Home Shield) can also help you get more comfortable with a purchase before you commit to a provider.
Conduct a home inventory: Finding the best home warranty requires doing the math on what you need and what you can afford. Conduct an inventory of your own appliances and major systems, calculate approximate repair and replacement costs, and determine if a home warranty is right for you.
Maintain your appliances. Attempting to repair certain appliances can actually void your home warranty, but regular maintenance won’t. With or without a home warranty there are definitely actions you can take now to keep the appliances you do have running longer.