- Price/Fee: $74.99/mo.
- Coverage: Major appliances, including refrigerator, dishwasher, washer and dryer, oven and cooktop, built-in microwave, free-standing ice maker, garage door opener, and trash compactor.
- Price/Fee: $74.99/mo.
- Coverage: Major systems, including heating with ductwork, electrical, water heater, garbage disposal, air conditioning, ceiling fans, and doorbells.
- Price/Fee: $84.99/mo.
- Coverage: All systems and appliances are covered in the first two plans.
- Price/Fee: Varies depending on systems and appliances chosen
- Coverage: Choose your own options from a list of 21 systems and appliances.
How Do Home Warranties Work?
A home warranty plan lowers your out-of-pocket costs when a covered appliance or system in the home breaks down. Policyholders typically file a claim with their warranty provider, and the provider will cover the cost to either repair or replace the item, minus any deductible or service fee that is your responsibility.
A contractor for American Home Shield, for example, will generally first try to repair an item, such as a washing machine, that is not working. If the contractor is unable to make the repair, AHS will in most instances cover the cost of purchasing a comparable washing machine.
Coverage varies from one plan to the next. When signing up, home warranty companies offer their best home warranty plans, each of which cover specific systems and appliances. Assume that if a home warranty contract does not explicitly list a certain item, the item is not covered by the plan.
What a home warranty covers
Generally, the best home warranty plans will cover two broad categories — systems that assure the overall habitability of the home (electrical, plumbing, HVAC, and more) and/or appliances (refrigerators, dishwashers, dryers). Most home warranty companies will have some variations of these items in each category, so it is important to read the fine print.
Additionally, many companies will include optional or add-on coverage for separate items. These often include garage door openers, doorbells, sump pumps, and septic system coverage.
What a home warranty doesn’t cover
As with insurance policies, home warranty plans do have important limitations. A home warranty is designed primarily to repair or replace systems and appliances, that is equipment. Therefore, a home warranty will not cover structural damage like walls or stairs.
Additionally, the typical home warranty plan will not cover items that have been damaged by misuse of the equipment or the failure to properly maintain the item. It’s crucial to carefully read all of the plan’s limitations and ask clarifying questions before purchasing a home warranty.
How to Choose the Best Home Warranty Company
Although we try to make it easy to find the best home warranty company and plan, it does require a little legwork. Here’s how to find the best home warranty plans:
- Make a general assessment and list of the systems and appliances to be covered. Include any other unique items that may not fit into normal categories such as sump pumps and second refrigerators.
- Look at the best home warranty companies rated by third-party sites based on comparing customer satisfaction ratings and experience, cost, and coverage.
- Ask local professionals — like real estate agents — or other homeowners for recommendations on home warranty companies.
- Match the top several companies with your needs, obtain several quotes, and compare.
Types of Home Warranties, Explained
A home warranty plan is a great choice if you are currently in a home that you own (or have mortgaged) and you are not planning to move in the near future. In most cases, you pay for your home warranty either monthly or annually, and the plan will cover either home systems, such as electrical and plumbing, your major appliances, including refrigerators and dishwashers, or some combination of both.
Home warranties are not a substitute for your homeowners insurance, which covers you from damage caused by weather, theft, or other named perils. A home warranty’s purpose is to help you pay for repairs when normal wear and tear takes a toll on your home.
A homebuyer’s warranty is similar in scope to a regular home warranty plan, but tweaked slightly to make it a great choice for anyone who is purchasing a home, and does not want to be saddled with repairs before the boxes are unpacked. The homebuyer’s warranty may be paid by the buyer as part of the closing costs, or by the seller or realtor.
A homebuyer warranty is typically offered by the best home warranty companies and is usually good for someone who is making the significant investment of purchasing a new home. Despite a buyer’s ability to contract to have the seller repair certain items identified in a home inspection, a buyer is unfamiliar with the overall condition of the systems and appliances in the home and the previous wear and tear.
A seller’s home warranty is also similar in coverage to the standard home warranty plan, but gives you the security of knowing that last-minute repairs or requests by the homebuyer will not cost you out-of-pocket. This is a good way to add certainty to the out-of-pocket costs you will pay to close the sale.
Additionally, particularly in a market in which selling homes is difficult, a seller’s home warranty may also be a perk that is intended to increase the desirability of a property for potential homebuyers. This may prove to be a creative and competitive way to close a sale without the need to adjust the price which will be difficult to raise again if the deal on the table does not close.
There are a wide variety of home warranty plans that cover various forms of homeowner dwellings as well as investment properties. This may include mobile homes as well as recreational vehicles. The same reasons for protecting against the cost of major system or appliance breakdowns apply in these situations. It is wise to find the best home warranty company for you and inquire about these other home warranty plans.
If you own a rental property, a home warranty that is specifically designed for landlords may help you when there are major repairs to be made on your property. They are especially useful if your property is older and more likely to require a claim.
Home Warranty FAQ
The best home warranty company can ease the financial strain that may arise with a system or major appliance breakdown in your home. Spending a relatively certain amount upfront to avoid an expensive and unpredictable surprise down the road may be worth it.
According to our research, the best home warranty is offered by Global Home Protection. Its plans include both coverage for systems and appliances, as well as plenty of add-on coverage options.
The best home warranty companies offer at least two levels of plans with varying premiums. Typically, there is a fixed monthly premium starting as low as $25 a month. On top of this, most companies charge a service fee per job which usually ranges from $75 to $125.
Most companies will provide an easy-to-reach number to make a claim and service call. Make sure you have this number when you sign a contract as well as understand everything you will need when you make the call.
You are legally entitled to cancel a home warranty plan at any time. Typically, most companies do not require payments beyond month to month so you should not be stuck with payments beyond the month you cancel.
We evaluated home warranty companies based on customer experience, customer satisfaction, monthly cost, trade service fees and coverage to determine Reviews.com scores and create our best home warranty reviews. To compare home warranty companies with other providers across the board, we calculate each Reviews.com score based on the following:
- Starting Monthly Price: The lower the cost of a home warranty company’s monthly contract, the higher the score. Inversely, the higher the cost of the monthly contract, the lower the score in this metric.
- Trade Service Fee: We awarded higher scores to home warranty companies with lower trade service fees.
- Customer Satisfaction: Reviews.com utilized the Better Business Bureau ratings to assign customer satisfaction scores to home warranty companies.
- Customer Experience: Using the Better Business Bureau, we reviewed rating of customer complaints lodged and resolved with BBB.
- Coverage: We compared available coverage and add-ons offered by home warranty companies to assign Reviews.com scores.