The Best Home Warranty
There’s peace of mind knowing that if your refrigerator is on the fritz, you won’t be unexpectedly set back hundreds of dollars for repairs. But we’ll be the first to admit that home warranties can be a risky investment. The industry as a whole has a terrible reputation, and groups from Consumer Reports to Angie’s List have reported on a slew of customer complaints — everything from service delays to band-aid repairs to denied claims.
So we set out to find a provider that will come through on its promises. Of the 17 home warranty providers we analyzed, American Home Shield was our top pick. Its customizable plan means you pay to cover only what you want or need, and it couples generous limits with friendly, informed customer service.
Our runners-up — Total Protect, SEARS, and First American — each had similarly generous coverage limits and knowledgeable reps, but the plans weren’t quite as flexible or affordable as American Home Shield.
How We Found the Best Home Warranty
A home warranty is a type of service agreement that covers the cost to repair or replace items in your home if they break down. It doesn’t cover accidents or natural disasters (that’s homeowners insurance) but the pricing model works in a similar way. You pay a monthly fee or a lump sum for your plan, like a premium. When you request a repair, you pay a one-time service fee (like a deductible) that covers parts and labor.
That’s what home warranties are intended for — to cover the costs of unexpected home repairs. But google “home warranty complaints” and you’ll find thousands of disgruntled customers. The gist: Many buyers don’t fully understand the limitations of their contracts.
“Home warranties are one of the most consistently complained about categories of service on Angie’s List, but largely because of misunderstandings by the owners. They assume it covers all their major appliances, and when one breaks, they call the company expecting a full replacement or repair just because they have a warranty.”
All of our top picks have at least a B rating from the Better Business Bereau or Angie’s List, but we didn’t pick providers based on ratings alone. Our goal: find a provider we could trust to fully cover major repairs or replacements.
We started with 17 home warranty companies that offered plans in at least 40 states (this excluded smaller, regional companies like Fidelity National or Old Home Republic). Then we put their service to the test.
We cut any providers that were difficult to work with.
As Cheryl Reed told us, the majority of complaints about home warranties comes from a misconception of what a policy does and does not cover. We wanted to find providers that cleared up the confusion and were upfront and transparent about their product.
To get a sense of how each of our 17 contenders would treat us as a policyholder, we called each company (multiple times) with questions about its coverage and claims process. Then, we dug into each provider’s service agreement — the contract that details what it will fix and the maximum amount it’ll pay to fix it.
We sought out friendly, educated reps that were upfront about coverage areas and the breadth of their service provider network. But we didn’t always get that. In fact, HMS Home Warranty sales reps gave us a quote in an area we knew it didn’t service. When confronted about it, we were told that they actually don’t check if they cover your address until after you’ve signed up. Why purchase a policy you might have to immediately cancel? Any provider that consistently kept us on hold was out too. In one instance, America’s Preferred Home Warranty put us on hold for over 18 minutes and eventually dropped the call.
Some providers work with larger networks of service techs. If you're in a rural or remote area, call and ask how many techs service your zip code. The larger the network, the easier it will be to schedule a repair.
We also passed on a few companies whose sales reps ignored our questions and launched right into a sales pitch. Choice Home Warranty was a repeat offender. When we told one of the reps “No thank you, I’m still shopping around,” he hung up on us without so much as a goodbye.
All of our remaining picks needed to share their sample contracts online. Tim Meenan, executive director and general counsel for the Service Contract Industry Council (SCIC), told us the SCIC recommends that all home warranty companies make it easy to find and review its contract. You shouldn’t have to call a company, survive a sales pitch, and surrender your email just to see the company’s coverage details.
But it’s not enough to just link to the fine print; you should be able to read it too. Especially because it’s often the only place you’ll find a full list of exclusions — the issues a warranty won’t cover. We wanted to see easily readable documents with well-defined headers and scannable sections. We found very few of those. Compare the tiny, condensed font of the worst offender, Home Warranty of America, to one of the best from First American Home Warranty.
2-10 Homebuyers Warranty, American Home Guard, America’s Preferred Home Warranty, Choice Home Warranty, HMS Home Warranty, Secure Home Warranty, Select Home Warranty
Then we dug into the contracts.
We compared the remaining 10 providers’ contracts to see what is and isn’t covered under each plan. But first, a quick overview of common terms:
- Appliances: These are the self-contained items primarily found inside your home, like a washer, fridge, or microwave.
- Systems: Items that are a bit more intricate and/or costly to repair or replace, like an HVAC, hot water heater, and the electrical wiring throughout your home.
- Service fee: The flat rate that you pay when a covered item needs to be serviced, similar to a deductible. Most providers' service fees are $75, $100, or $125 per claim. Often, you can choose to pay a high service fee in exchange for a lower monthly payment.
- Limits of liability: The maximum amount of money a home warranty provider will pay in a year. Some providers list specific limits for individual items. For example, if a provider has a $500 yearly limit on washers, it will only pay $500 each year for the repair or replacement of your washer, regardless of how many times it breaks down. Some list a larger “maximum aggregate limit” that applies to all systems and appliances. Most providers have a mix of both.
- Recall period: Sometimes called a “workmanship guarantee,” this is the length of time that the home warranty provider will fix issues with a repair or installation rendered by one of its approved technicians. So if something is incorrectly repaired, or one of your replacement parts was faulty, the provider will make amends at no charge to you.
Right off the bat we learned that there are several things you can expect from any home warranty:
Anything outside of “normal wear and tear” isn’t covered.
Each company has its own definition, but things like rust, improper installation, mismatched systems, and pre-existing problems generally aren’t covered. Standout companies, like American Home Shield, do cover things like pre-existing problems or improper installation as long as the issue isn’t easily detectable.
According to the AHS contract, that means that the item “appears structurally intact and without damage or missing parts that would indicate inoperability,” and operates “without causing damage, irregular sounds, smoke, or other abnormal outcomes.” In other words, it won’t cover items that were clearly broken before the policy’s start date.
Anything that isn’t explicitly covered in the contract is probably not covered.
Some contracts, like SEARS’s, list out all items that are covered and those that aren’t. Others, like First American, says it covers “all parts and components,” then follow it with a list of exclusions. Either way, if you don’t see a specific scenario, part, or issue explicitly outlined, it probably isn’t covered.
Routine maintenance is often required in order for a device to be eligible for repair or replacement.
Home warranty companies expect you to perform regular maintenance on all of your appliances and systems (cleaning vents, changing filters, oiling hardware). If you haven’t, your claim could be denied. All of the contracts we looked at require “routine maintenance as specified by the manufactuer,” except for America’s First Choice Home Club, which requires a “prior satisfactory annual maintenance record from a licensed technician” in order to qualify for replacements and repairs.
Replacements are a last resort.
Home warranty companies decide whether to repair your device or replace it. If you qualify for a replacement, the company will either choose a similar model for you, or give you the cash to purchase your own.
The biggest difference between service agreements was the maximum liability.
To our surprise, half the companies on our list cap their coverage at $500. Is that enough? Probably not.
Imagine your refrigerator breaks down. According to data from Home Advisor, the average refrigerator repair costs between $200 and $400. That means if it breaks down again later that year, you might only have $100 to put towards another repair. And if it needs to be replaced altogether, you risk paying for most of it out of pocket.
Most appliances start falling apart in under a decade.
*Replacement cost is for a mid-range device
We were surprised just how low that was in comparison to the others; American Home Shield will pay up to $1,500 per item and TotalProtect doesn’t cap their coverage at all. So we dropped any providers that capped big-ticket items at $500 in favor of those who could see us through an expensive repair or a new replacement.
365 Home Warranty, American Residential Home Warranty, America’s 1st Choice Home Club, Home Warranty of America, The Home Service Club, Total Home Protection
We didn't factor in the price of a policy.
Don't be afraid to ask for a lower price. All service contract prices are negotiable. We recommend getting a quote over the phone for that very reason. Online there’s no way to pitch for a more competitive price.
Policy costs vary greatly from state to state. In some cases, we saw the same plan vary by more than $100 just a few states away. But the numbers aren’t set in stone. Several of the experts we spoke with indicated that pricing was flexible, but we didn’t really understand what that meant until we tested it for ourselves.
During one of our calls we were quoted $570 (per year) for the plan we wanted. We told the representative that our budget was $450. He responded by saying, “OK, let me work on this.” Thirty seconds later, he returned to inform us that they were running a special promotion that brought our bill down to (you guessed it) $450. That’s not to say that a little haggling will always score you a $120 price drop, but if you don’t mind negotiating a deal, it might turn out to be worth it.
The Best Home Warranty Providers
American Home Shield (AHS) invented the concept of home warranties 46 years ago, so it comes as no surprise that it boasts the most complete nationwide coverage of any other provider. It also has the most transparent terms and conditions we found, and our experience with customer service was a league above the rest.
AHS has four plans to choose from, but we really loved its “build your own” option — the only one like it on the market. It works like this: You pick the 10 items (appliances or systems) that you want covered. If you don’t own a dishwasher, don’t pick it. If you just bought a brand-new hot water heater, slot another device in its place and maximize the value of your contract. DIYers benefit too: you have the flexibility to cover only the devices you wouldn’t attempt to fix yourself.
The plan also starts at $32 per month, making it by far the most cost-effective way to cover the systems and appliances you care about the most — and nothing you don’t.
Your home warranty should cover the items that are most expensive to replace. For appliances, that includes refrigerators, dishwashers, oven/range/cooktops, and washer/dryers. For home systems, that’s air conditioning, heating, plumbing, electrical, and water heaters.
If you’re looking for a plan that covers more than 10 items, AHS has you covered too. The combo plan includes all covered systems and appliances, including built-in microwaves, garbage disposals, ceiling fans, smoke detectors and more starting at $38 per month.
No matter which plan you choose, pools, spas, and well pumps will cost and additional $7–13. Your cost of monthly coverage will vary depending on the service fee amount you choose: $75, $100, or $125. The cheaper your service fee, the higher your monthly coverage.
American Home Shield’s quote tool makes it easy to compare your options.
Limits make or break a home warranty. If a company will only pay $500 to fix or replace an appliance, it doesn’t matter how comprehensive the coverage details are. We liked that AHS will pay up to $3,000 per item for most of its appliances and up to $1500 for most of its systems. Compare that to 365 Home Warranty which is only liable for $3,000 during the entire life of the contract.
The only exception to American Home Shield’s best-in-class coverage: it caps plumbing expenses at at $1,000 for plumbing repairs. While that’s lower than what our other top picks offer (SEARS and TotalProtect don’t put a cap on plumbing at all), it will most likely be enough to cover the most common repairs or replacements. A broken sump pump is generally the most expensive plumbing issue you might run into, and replacing it costs around $500.
During our first call with AHS, we were impressed with how well the representative knew the ins and outs of her product. We poked and prodded with some finely tuned questions about the contract, but she remained composed and echoed exactly what we already knew to be true from reading the contract ourselves. For example, when asked what the maximum liability was for an HVAC was, the first rep explained that AHS has no cap for HVACs unless it contains a boiler-type furnace — exactly what’s listed in the contract. The second representative we spoke with didn’t have as many answers right off the bat, but didn’t hesitate to transfer us to someone in the claims department who did.
We didn’t get this level of treatment anywhere else. With other providers, we often felt as if we were being assuaged with false assurances: No matter what we asked our American Home Guard rep, the answer was “yes” or “don’t worry about it.” AHS was completely transparent about what would or wouldn’t be covered in its agreement.
Like all of our top picks, AHS has a few online benefits that make owning a home warranty much simpler. Customers can submit and track claims on the site, and pay their bills. No paper mail. No phone trees. Just a few clicks is all it takes.
Other Home Warranties to Consider
American Home Shield is the best option we found, but if you happen to live in an area of your state that has very few AHS-approved service technicians — or doesn’t have AHS coverage period — there are a few others you should consider. All three met the same high standards to which we held American Home Shield, but weren’t quite as flexible or affordable.
TotalProtect was a close competitor, but it doesn’t offer a custom option like American Home Shield. Where TotalProtect stands out is a 180-day “workmanship guarantee” that’s twice as long as AHS. If you experience problems with a repair or installation up to six months after the fact, TotalProtect will waive the service fee. Faulty replacement parts and incorrect repairs aren’t always immediately apparent, so we liked that TotalProtect went the extra mile (SEARS also has a lengthy workmanship guarantee.) It also doesn’t have liability caps on any major appliances or systems. In fact, there’s no maximum aggregate liability for the contract term either. So no matter what breaks down, you’re covered.
We recommend the “Combo” plan because it’s the most comprehensive. It includes the most expensive, repair-prone systems and appliances, plus other, uncommon or inexpensive items like central vacuum systems, doorbells and chimes, garage door openers, smoke detectors. At $44 per month, it’s about $5 more expensive than AHS’s combo plan. But in terms of coverage, it’s right on par, plus whirlpool tub coverage, which AHS doesn’t offer. Appliance and system plans are also available, starting $23 and $35 per month, respectively. Like American Home Shield, you can choose your service fee ($75, $100, or $125).
There’s no live chat option on the site, so plan to call TotalProtect directly if you have any questions. Otherwise, TotalProtect is a strong, slightly more expensive alternative to our top pick, American Home Shield.
Just like TotalProtect, SEARS Home Warranty impressed us with a 180-day recall period. We also liked that customers get a free heating and cooling maintenance check every year, and select East-coast customers (plus a few in California and Michigan) get the added perk of discounted oil changes and tire rotations at Sears Auto Centers. There’s a $1,000 limit for liability on your pool (and ultra-premium appliances), but everything else is covered by a generous $10,000 cap. Another perk: The site has a live chat option, which makes it easy to get your questions answered without the hassle of waiting on the phone.
Now for the not-so-good. SEARS is one of the most expensive providers out there. Plan for plan, it’s consistently around $10 more expensive (per month) than American Home Shield. Its “Whole House Warranty” is a full $20 more per month for the same items, plus water softeners. SEARS offers two service fee options: $75 or $100.
What’s more, the future of the business is unclear. In early 2017, Business Insider reported that Sears Holdings (the parent company that oversees home service agreements and retail stores) could be nearing bankruptcy, in which case there’s no guarantee it would be able to satisfy ongoing home warranties. In response, the CFO, Jason Hollar, stated in a blog post that Sears is “a viable business that can meet its financial and other obligations for the foreseeable future.” If that changes, its customers can always cancel their agreements.
First American Home Warranty gets a blue ribbon for having the most organized contract of all our top picks. It still looks like a legal document, but it clearly lays out the what each plan does and doesn’t cover.
It’s $25-per-month “Basic” plan is comparable to the appliance-centric plans found in our other recommendations. And it’s only $300 if you pay upfront, which is a pretty great deal paired with a flat $75 service fee. (Choosing a $75 service fee elsewhere would bump your plan up by about $100/year.) All your regular kitchen appliances are included, plus a few extras (water heater, electrical, ductwork, and a well pump). If you are primarily looking to cover your kitchen, that’s a pretty competitive price.
If you’re looking for a more comprehensive plan, know this: You’ll have to upgrade to its “Premiere” plan ($41 per month) to cover your furnace, and AC coverage is only available as a $9-per-month add-on. That makes First American about $10 more than American Home Shield per month, and it comes at the expense of less flexibility. Another bummer: First American has a 30-day recall period, which is the lowest of all our top picks.
There are eight states, including New York and Illinois, that First American Home Warranty does not service. The other six are a mystery. None of the representatives we spoke with knew what they were (they only check to see if they can cover the property address) and there’s no information in the contract or on the site — which, to us, is a significant oversight. If you’re interested in purchasing a home warranty, get a quote for your address before you spend any amount of time reviewing the plans.
Who should get a home warranty?
Homebuyers and sellers benefit the most.
According to a 2014 industry study, homes with warranties spend approximately 11 fewer days on the market and sell for an average $2,300 more — around $1,800 more than what the seller probably spent on the home warranty. Sellers benefit from the extra incentive, and buyers get the peace of mind that they won’t have to pay for repair after repair out of pocket.
But before you purchase a home warranty, ask the seller or your real estate agent if they have any documentation on manufacturer warranties — the manuals should indicate if they are still in effect. The manufacturer’s customer support channels should also be able to help. If all of the major appliances are already covered by the manufacturer’s warranty, you won’t want to duplicate that coverage with a home warranty.
And, if you’re moving into a brand-new home, be sure to ask your real estate agent about the possibility of a builders warranty. Some new homes come standard with 6- to 12-month warranties on systems and appliances, courtesy of the contractor.
Homeowners with lots of older appliances save too.
Based on user-submitted data, Home Advisor found that the median repair cost for common home appliances like fridges, ovens, and washers is around $200, and the most expensive repairs tend to max out around $350. Repairs for heating units, air conditioning units, and other big-ticket systems average between $160 and $500 with a max of about $1,000. When an appliance needs multiple repairs or has to be replaced altogether, you might be on the hook for double or triple that price.
If multiple appliances or systems are nearing the end of their average lifespan, a home warranty can save you a lot of money and grief. The trio of a busted AC compressor, a leaky fridge, and a snapped dryer belt — three fairly common issues for aging appliances and systems — can easily exceed the cost of a home warranty and service fees.