8 Best Home Warranty Companies of 2023
A home warranty can cover repair or replacement costs for malfunctioning appliances or systems due to normal wear and tear. It typically costs around $50 per month. However, it's important to consider factors beyond just cost when choosing a home warranty policy.
When selecting a home warranty company, look for coverage options for both new and old homes, excellent customer service, comprehensive coverage, and prompt claims and technician response times. With so many companies to choose from, it can be overwhelming, but our list of top-rated companies can help you find the best option for your needs. Whether you are a first-time homebuyer or seller, a home warranty can be a crucial investment in protecting your home.
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The Best Home Warranty Companies of 2023
- American Home Shield – Best Overall
- Choice Home Warranty – Best for Older Homes
- America's Preferred Home Warranty – Best Customizable Home Warranty
- First Premier Home Warranty – Best Home Warranty for Value
- Select Home Warranty – Best for Free Leaky Roof Coverage
- Liberty Home Guard – Best for Additional Coverage Options
- AFC Home Club – Best for Longest Work Guarantee
- Complete Care Home Warranty – Best for Low Service Fee
- ServicePlus Home Warranty – Best for Quickest Claims Response
American Home Shield: Best Overall
American Home Shield (AHS) is best overall for its comprehensive plan, affordable pricing, ability to allow homeowners to choose the cost of their service fee, and its discount program.
Its competitive pricing, along with its comprehensive coverage options, puts American Home Shield as a top pick.
What are the Plan Options of American Home Shield?
The company offers three plans:
ShieldSilver: Best for major systems. It covers 14 home systems and has no coverage limit.
ShieldGold: Covers 23 essential home systems and appliances. This plan has no coverage limit for systems and an appliance limit of $3000 per appliance.
ShieldPlatinum: This is the comprehensive plan that covers both plans above. It has a coverage cap of $6,000 per appliance, $1,500 for roof leak repairs, no cap for systems, as well as $1,000 for code violations, permits, and modifications.
This fee—in addition to the monthly premium--to AHS’s contractor lets customers choose the service fee they like: $75, $100, or $125.
The lower service fee allows you to pay more each month.
A higher service fee allows you to pay a lower amount.
Another plus is AHS’s discount programs they offer to policyholders. For example, you are allowed to get new systems and appliances at a discount from top popular brands, including KitchenAid, GE, Whirlpool, Amana, Maytag,
|ShieldSilver||$49.99 a month|
|ShieldGold||$59.99 a month|
|ShieldPlatinum||$74.99 a month|
American Home Shield Pros & Cons
- Offers coverage uncommon in other plans, including improper installation of appliances, aging appliances, and mismatched systems.
- 24/7 customer support.
- Has an efficient claims process.
- Ability to choose your contractor.
- Provides generous coverage caps on certain systems and appliances.
- Discounted prices on name-brand appliances.
- 30-day guarantee for labor.
- Does not require maintenance records.
- Many customer reviews complaints based on denied claims and negative experiences with on-site technicians.
- Repairs only guaranteed for 30 days.
- Not available in Alaska.
- BBB rating is low: B average.
- Discontinued customizable plan.
- Does not offer a discount for paying annually in full.
Choice Home Warranty (CHW): Best for Older Homes
This top-rated home warranty company is ideal for older homes. That’s because, unlike other insurers, CHW offers coverage even if your home is old and even though your appliances are old as long as you’ve properly maintained them.
Old homes usually need repairs, and CHW offers a pretty good 90-day repair guarantee on parts and a 30-day guarantee on the company’s technician’s labor.
What are the Plan Options of Choice Home Warranty?
There are two plans offered.
The Basic Plan covers “basic” systems and appliances, such as ovens, dishwashers, plumbing, and heating systems.
The Total Plan, which is slightly higher in cost, covers 18 systems and appliances, including the equipment not covered in the Basic Plan: air conditioning, refrigerators, washing machines, and drying machines.
|The Basic Plan||$41.69 per month|
|The Total Plan||$50.00 per month|
Keep in mind these quotes vary depending on where you live.
The service fee is around $60 to $85 and is also lower than competitors. The lower the fee, the higher your monthly premium will be.
Choice Home Warranty Pros and Cons
- Comprehensive plan at highly competitive price.
- Guaranteed response time within 48 hours.
- Free coverage for the first month of service
- Doesn’t require a home inspection.
- Customers can cancel for free within 30 days.
- Optional add-ons are attractive.
- Covers items past the manufacturer’s warranty but doesn’t cover defects due to manufacturer’s fault.
- Defects caused by low to no upkeep or negligence are not covered.
- Commercial-grade systems and appliances like a La Cornue range are not included in either plan.
- It is up to the warranty company to extend you cash in place of actual replacement costs.
- Service is not available in all states.
- Only two plans are available besides optional add-ons.
- No choice of contractor.
America's Preferred Home Warranty: Best Customizable Home Warranty
America's Preferred Home Warranty (APHW) has a sterling reputation, particularly because of their transparency and customizable offers.
Not only is APHW BBB accredited but also garnered awards from the Better Business Bureau for its ethics.
What makes APHW really stand out is their offerings for different types of properties and letting customers decide on which licensed contractors they want to use for repair work.
Plans vary depending on if you want coverage for a single-family home, a condo, a townhouse, new construction, or a multi-family unit.
What's more, is that their basic plan includes fairly extensive coverage and they are also very transparent about what is not covered.
First Premier Home Warranty: Best Home Warranty for Value
First Premier Home Warranty started just a few years back, yet it’s getting rave reviews for its affordable pricing and customer service.
What are the Plan Options of First Premier Home Warranty?
First Premier offers two plans.
The Premium Plan
This basic plan covers most major systems and appliances.
The Premium Platinum Plan
This upgraded plan services large systems and appliances that are both difficult and pricey to repair.
As you can see, unlike other warranty companies, First doesn’t split plans by category or by systems and upgrades.
There are also plenty of a la carte add-ons for extra coverage.
|Premier Plan||$32 a month / $350 a year|
|Premier Platinum Plan||$45 a month / $499 a year|
The average premium plan in the industry is about $25-$50 a month.
Thus, the basic premium plan, at $32 a month, is in the low range, above $25 but significantly less than the $50 high range average.
This makes Premier more affordable than comparable insurers.
The average industry service fee is $75, whereas $75 is First Premier's high range for service. However, it can be as low as $45, putting it down there as one of the industry's lowest service fees.
First Premier Home Warranty Pros and Cons
- BBB: A-. Despite being new, the BBB has already accredited it at a very good grade.
- Excellent prices and glowing customer reviews.
- Highly vetted and trained service providers.
- Optional roof leak coverage.
- There’s not a lot of difference between the Premium Plan and the Premium Platinum Plan. The only things lacking in the premium or basic plan are coverage of AC, heating systems, refrigerator, washing machine, and dryer.
- Transparency: You can find the cost of each add-on on its site.
- Can’t choose your own technician.
- Is not available in 2 states, which are California and Vermont
- New to the industry; some warranty buyers may look at more established home warranty companies.
- You can call anytime at night but dispatching a technician to a home won’t begin until business hours start.
- But if your problem is a true emergency, it may expedite services.
Select Home Warranty: Best For Free Roof Leak Coverage
Founded in 2012, Select Home Warranty is known for its affordable premiums.
What it is also known for is its free roof leak coverage.
Most home warranty plans do not cover roofs. If they do, you’d have to purchase roof coverage as an add-on, which means your rate will go up.
A roof warranty costs around $45 to $180 a year, with the median being $100 a year. This can be very expensive.
Select is the only warranty we found that had roof coverage as a standard policy.
And Select’s roof warranty is absolutely free as a signup bonus when new homeowners select, well, Select.
What are the Plan Options for Select Home Warranty?
There are three coverages you can choose from.
- Bronze: Best for Appliances
- Gold: Best for Major Systems
- Platinum Care: Best for Comprehensive Coverage
Exclusions to the Warranty
If you buy a warranty, your appliances and systems must be in good working order without any pre-existing conditions.
And while coverage is affordable, we noticed plenty of exclusions from what Select has to offer.
- Solar or tankless water heaters
- Water softeners
- Solar heating systems
- Geothermal heat pumps
- Improperly installed ductwork
- Window air conditioners
There’s not a lot of difference in pricing, and even comprehensive or Platinum Care is relatively affordable.
Platinum Care also beat the median cost in the industry, which is
$50 per month.
Select requires a $40–$100 trade service call fee. You are responsible for paying the fee as soon as the technician is dispatched.
Select Home Warranty Pros and Cons
- Two free months of coverage after signing.
- 90-day repair guarantee.
- Distinct systems on appliances plans.
- Technicians or service providers can haul away appliances for a small fee.
- Nationwide availability.
- Discounts on multi-year coverage plans.
- Doesn't cover fixtures.
- Low coverage caps.
- You can rack up multiple service fees during a visit if there are many types of repairs.
- Free roof coverage doesn’t cover gutters, chimneys, and downspouts, as well as partial or full roof replacement.
- Will also not repair metal roofs or replace shingles.
- Air conditioning unit warranty covers only the home’s primary floor and a wall and window unit are excluded
Liberty Home Guard: Best for Additional Coverage
While Liberty Home Guard is new to the scene, the company is already known in the industry for providing impeccable customer service and great coverage regardless of the age of your systems and appliances.
But what Liberty does best is to offer its members a lot of additional coverages or add-ons—20 in total---that most companies typically don’t offer.
Since you pay for each add-on, your premium will go up.
But additional coverages help customers fine-tune their warranty plan to their liking and their home’s exact needs.
As such, add-ons can give you peace of mind that all or nearly all of your systems and appliances are protected.
Some of the add-ons include:
- Pool and spa
- Gutter cleaning
- Sump pump
- Septic system pumping
- Limited roof leak
- Pest control
- Well pump
- Fixtures (lighting and plumbing)
- Water softener
- Lawn sprinkler system
- Electronics protection
- Ejector pump
What are the Plan Options of Liberty Home Guard?
Liberty offers three coverages.
Appliance Guard covers major appliances like ovens and refrigerators.
Systems Guard covers essential systems like electrical and heating.
Total Guard protects both appliances and systems.
As usual, the prices depend on where you live and the plan you choose.
|Appliance Guard||$39.99 a month|
|Systems Guard||$49.99 a month|
|Total Home Guard||$59.99 a month|
Like some other warranty companies, Liberty doesn’t give members the option to choose their service fee.
But its own is a low service call fee of just $60.
Liberty Home GuardTotal Home Guard Pros and Cons
- Offers a 60-day workmanship guarantee.
- No contract requirement.
- 24/7 Customer service.
- Quickly dispatches technician within 24 hours if there’s an emergency breakdown of an appliance or system.
- A survey module allows members and technicians to submit feedback that is shared directly with the company’s higher-ups.
- BBB: A+ rating based on more than 250 BBB customer reviews.
- Doesn’t cover any known or unknown pre-existing conditions, although some do.
- Offers coverage in 45 states; not available in California, Illinois, Washington, Wisconsin, or Wyoming.
- Members can’t customize their plans.
AFC Home Club: Best for Longest Work Guarantee
Home warranty companies typically provide the standard guarantee of 30 or 60 days for any repairs done to your system or appliance.
But we found that the AFC Home Club is more generous and thus more unique, as the company offers a guarantee on parts and labor for the life of your membership.
This means you are covered for up to three years, which a typical warranty company doesn’t offer.
That’s a pretty good deal!
What are the Plan Options of AFC Home Club?
AFC offers four plan options: platinum, gold, silver, and system plans.
A System Plan is exclusively for systems.
The Silver Plan covers appliances like your oven or refrigerator.
The Gold Plan covers both systems and appliances.
The Platinum Plan is no different than the Gold Plan. It covers all the major systems and most appliances as well but adds on only three coverages, which are built-in microwaves, ice makers, and plumbing stoppages.
|Systems Plan||$38-$42 per month|
|Silver Plan||$31-$36 per month|
|Gold Plan||$45-$49 per month|
|Platinum Plan||$49-$54 per month|
We usually recommend the most comprehensive plan, but not in this case.
The Gold is cheaper than the Platinum, and the only three items that it doesn’t cover that the Platinum does is the coverage for the built-in microwave, the ice maker, and plumbing stoppage.
Plumbing stoppage we can live with. But how many of us have built-in microwaves? Most people have a stand-alone microwave. And ice makers? Well, that’s just—we won’t go there.
Customers have the option to choose a service fee between $75–$125.
AFC Home Club Pros and Cons
- 24/7 customer service.
- Service requests can be submitted online or over the phone, 24/7.
- Offers benefits like free credit monitoring, identity protection, and Emergency Alert Network services.
- Free programs and discounted items and services.
- Does not require a home inspection for coverage to begin.
- Pricier than most home warranty companies.
- Not available in CA or HI.
- Must submit a claim within one day after noticing an issue with a system or appliance.
- Provides a window between 24 and 48 hours to initiate claim; for comparable companies, the window is only 24 hours.
- Charges a $75 cancellation fee.
- BBB: B rating.
Complete Care Home Warranty: Best for Low Service Fee
Complete Care made our list due to its low service fee.
If you can commit to at least three years of coverage with Complete, the company will allow you to pay a very low service fee of $45 a month for the life of the term.
This service fee is the lowest in the industry, allowing you to save on out-of-pocket costs during a claim.
The national average service fee for most companies is usually seventy-five bucks.
If you can’t sign up for a contract of three or more years, your service fee will cost you $60. That’s still lower than the national average.
What are the Plan Options of Complete Care Home Warranty?
The Systems Plan provides coverage for seven major home systems: AC, plumbing, heating, electric, water heaters, ductwork, and plumbing stoppages.
The Appliances Plan covers ten appliances, from the small (microwave) to the big (stove).
And naturally, the Combo Plan covers both plans.
|Systems Plan||$43 per month|
|Appliances Plan||$43 per month|
|Combo Plan||$50 per month|
Add-ons cost between $3 to $13 per month.
Complete Care Home Warranty Pros and Cons
- 90-day guarantee on parts.
- Provides free roof leak coverage with annual billing.
- 24/7 customer service and claims support.
- Contracts can be paid not just per month, but also annually or multi-year.
- Members can choose their preferred repair service provider.
- Vetted repair technicians and contractors are not just licensed, bonded, and insured, but also must have a great customer reputation.
- 30-day money-back guarantee.
- No inspection needed at first.
- No appliance age restriction; some warranters won’t cover an old appliance if it was manufactured before a specific year.
- If a covered repair fails, it will be re-serviced.
- Available in only 47 states; excludes Alaska, California, and Washington.
- BBB: B+ (relatively low compared to other warranty companies on our list).
- Policy doesn’t go into effect until 30 days have passed.
- Canceling contract before end of term comes with cancellation fee.
- Phone only claim submission.
- No online presence or app as of 2021.
- Doesn’t cover chimneys, flues, or linings, or the cleaning and relighting of pilot lights.
- Faucets and other plumbing fixtures are not covered.
- Covers electrical system components and parts including built-in bathroom exhaust fans but doesn’t cover DC wiring, attic exhaust fans, or exterior wiring or components.
ServicePlus Home Warranty: Best for Quick Claim Response Time
Founded in 2016, ServicePlus is already garnering attention for its superb customer service and its ability to be reached in three different and convenient ways, which are online, an online chat, or through a phone call with a rep. On top of that, customer service is available 24/7, and you can submit a claim online.
Beyond that, ServicePlus has a fast response time to claims. That’s what makes ServicePlus truly unique.
It has a 2-day time frame for getting back to you and making repairs. 2 days is below the industry average.
However, on weekends the timeframe extends to 4 days. 4 days may sound long, especially since the industry average is 2.7 days.
If there’s an emergency and you need an appliance or system fixed ASAP, ServicePlus offers 24/7 emergency service, as does close to 90% of the industry.
What are the Plan Options For ServicePlus Home Warranty?
Two plans are offered: Gold and Platinum.
Gold includes plumbing and electrical systems, a garage door opener, and coverage for a lot of kitchen appliances. It’s a good mix of systems and appliances.
Platinum covers appliances and nearly all home systems, including two air conditioning units, heating, electricity, and plumbing.
As for appliances, this plan includes the repair of the washer and dryer, the refrigerator, gas or electric stove, an oven or cooktop, a microwave oven (only if it’s built-in), a dishwasher, and garbage disposal, a trash compactor, and much more.
Add-ons include coverage for the pool, spa, second refrigerator, standalone freezer, sump pump, and much more.
|Gold Plan||$46 per month|
|Platinum Plan||$52 per month|
The deductible, which is paid at the time of repair, is the industry standard rate of $75.
ServicePlus Home Warranty Pros and Cons
- Excellent customer service.
- Even if claim falls outside service agreement, the company will try to assist you to all extents of its abilities.
- Online claims are easy and save time.
- Sample contracts are easy to understand and follow.
- A large network of bonded and licensed service technicians.
- Comprehensive coverage plans.
- Re-service for failed repairs
- Has 4-star rating on Google Reviews, above the industry average of 3.4 stars.
- Will wait to start your coverage until pre-existing problems on older units are repaired.
- Not available in five states.
- A name change in the company due to previous service issues.
- Air-conditioning window units, humidifiers, non-ducted wall units, and commercial grade equipment are not covered.
- For eligibility, heating system should not exceed a 5-ton capacity; anything over will be a commercial unit and will not be covered.
- Electrical system coverage is capped at $500 for access, diagnostics, and repairs or replacements per contract term.
How We Decided & Picked the Best Home Warranty Companies
When it comes to home warranty companies, there aren’t that many discounts available to customers.
Still, to narrow down our list of the best home warranty companies, we usually included a company that offered a discount that made it worth purchasing the policy.
A few of the discounts we did look out for include:
- Discount on multi-year coverage plans.
- Discount when getting new systems or appliances.
- Discount for programs and discounted items and services.
- Discount or free offer for benefits like complimentary credit monitoring, identity protection, and emergency alerts.
A home warranty covers important home systems and appliances that need repair or replacement after breaking down from regular wear and tear.
Specific coverage ultimately depends on the provider and plan and the details contained in the fine print in the home warranty contract.
To narrow down our list, we looked at how much a plan offered; if a company offered a plan that covered 14 or more home systems and which had no coverage limits, we put that company on our list.
The more a plan offered, the more attractive the company was to us.
It’s important to note that we also looked at unique coverages that a home warranty company offered and that were included in a plan and not as an add-on, which could drive up your premium.
For example, roof leak coverage, built-in microwave coverage, and ice machine maker coverage all came standard in a policy.
An online website or a mobile app makes getting additional coverage, plan details, paying your bill, and making a claim easier in comparison to having to talk to a customer service rep where you may be put on hold for a long time.
For the most part, we chose home warranty companies with an online presence or portal and a mobile app.
So, the convenience of a company’s technology was very important to us.
But we kept in mind that some of the companies we chose are relatively new to the industry and had not yet set up the technology. They should not be penalized because of that.
When deciding on a home warranty company, it's important to look at customer reviews. We scoured customer reviews from many sites to see how well a home warranty company performed.
We specifically zoned in on customer service review complaints, as the face of the company has great bearings on how the company ultimately performed when it was time to make a claim and how well-received the technician sent to your house.
As such, friendly service was also important to us.
We looked at home warranty companies that had the most affordable price. If the policy had a premium below the national average, or if the policy had a low deductible compared to similar companies, we put those companies on our list.
What is a Home Warranty?
A home warranty protects your major home systems and appliances when they fail to work or malfunction due to normal wear and tear.
Many homeowners will purchase a home warranty to prevent them from having to shell out money for expensive repairs or replacements after their warranty from a manufacturer expires.
A home warranty is not a type of insurance.
It’s a service contract that you pay monthly or annually to a home warranty company to cover major kitchen appliances and electrical, plumbing, heating, and air conditioning units known collectively in the industry as “systems.”
Having a home warranty allows homeowners to enjoy their homes without worrying that their AC, for example, will not get busted and need repair during the dog days of summer.
So if the AC does stop working, homeowners have peace of mind that a technician will come to their home to repair it.
What are the Separate Categories for Home Warranty Companies?
Home warranties separate what they cover into two broad categories: systems and appliances.
The specifics depend on your contract with the warranty company, but in most cases, the company has separate plans for each and usually offers a premium plan, also known as a comprehensive package, that covers both categories.
Comprehensive coverage is always more expensive than separate coverages.
Systems are like your HVAC.
Appliances mostly cover kitchen appliances such as the dishwasher, refrigerator, or stove.
But they also cover your washing machine and dryer.
Why Do I Need a Home Warranty When I Have Homeowners Insurance?
Purchasing a home warranty adds an additional layer of protection for your home by covering the cost of repairing or replacing your home’s appliances or systems.
You need a home warranty, especially if a system or appliance can’t be repaired by the company’s inspector or technician. A home warranty company will reimburse you, but only if the system or appliance is covered by your warranty.
Meanwhile, a homeowners insurance policy also protects the interior of your home.
But it is different from a home warranty because it provides coverage or reimbursement to your personal belongings in case of damage or loss due to fire. theft or vandalism, and natural disasters such as high winds or hurricanes.
Also, a homeowners insurance policy is mandatory if you have a mortgage, as the mortgage company needs to protect its investment, which is your home.
But a home warranty is not mandatory and is always optional.
Here’s a handy guide to the differences between a home warranty and a homeowners insurance policy.
Who Should Purchase a Home Warranty?
Home warranties usually cater to first-time homebuyers because they lack experience in maintaining a home and its systems and appliances.
Especially after the arduous task of closing on a home, the last thing new homebuyers want to face when they move in is that their stove, for example, is not working.
First-time homebuyers may pay for the coverage, but in some cases, the seller will throw home warranties into closing deals to help entice them.
However, you run the risk of losing money if you opt for a home warranty plan and your home is old.
That’s because, in old houses, the systems and appliances may be outdated or at the end of their lifetime and thus are more susceptible to breaking down.
If so, repairing older items may not be possible because the replacement parts may no longer be available.
If that occurs, you lose money buying a policy.
And you also lose money if you never have to make a claim.
In the end, you must decide if peace of mind matters more than the expense.
What Systems Are Covered in a Basic Home Warranty Policy?
Typically, the following systems are covered in a standard home warranty policy:
- Heating system
- Air conditioning system
- Plumbing system
- Electrical system
- Water heater
- Garage door openers
- Ceiling fans
- Central vacuum
What Appliances Are Covered in a Basic Home Warranty Policy?
A home warranty covers any appliances in your home specified in your contract regardless of age.
Typically, they include the following:
- Built-in microwave oven
- Trash compactor
- Instant water dispenser
- Garbage disposal
- Clothes washer
- Clothes dryer
- Range, oven, and cooktop
Are There Optional Coverages to Protect My Pool or Guest House?
There are many optional coverages that you can buy as an add-on to ensure that all your systems and appliances are protected.
- Roof leak repair
- Well pump
- Sump pump
- Septic tank
- Pool and spa
- Water softener
- Guest unit
- Central vacuum
Are There Different Types of Issues That Are Not Covered?
Home warranties do not cover issues related to the following.
- Preexisting conditions
- Improper installation or maintenance
- Code violations
- Items typically covered by home insurance
- Unusual wear and tear
- Structural elements
- Smart devices
- Solar panels
- Items under manufacturers' warranties
- Commercial-grade appliances
For commercial-grade appliances or high-end appliances, this means a home warranty isn’t liable for repairing or replacing them.
Think of brands like Sub-Zero, Wolf, Viking, Bosch, GE Monogram, Thermador, and many more.
But other name-brand appliances that are significantly lower than high-end ones are covered.
Think of brands like KitchenAid, Whirlpool, Amana, Maytag, and JennAir.
The fireplace is also on the excluded list, but it’s good to know that your home warranty will cover the gas lines to the fireplace since it’s considered part of your home’s systems, namely the heating system.
And solar panels aren’t covered because they typically come with a long warranty from the manufacturer.
If your home warranty technician or inspector discovers that an item may be coming to the end of its life expectancy, then the warranty, in most cases, won’t cover it because you, the homeowner, were told about it.
The terms and conditions of a home warranty will spell out exceptions to covered appliances and systems.
For example, a refrigerator is covered, but a second one, which is perhaps located in the basement or garage, is not
And if your appliance or system was improperly installed, they also won’t be covered.
Also, mismatched systems are not covered.
In sum, it’s very important for you to thoroughly read and review the contract agreement before you purchase a policy to see what systems and appliances are included, and the reasons why some of them are excluded.
You should be able to do this online without contacting a rep because a sample contract agreement can be found on the company’s website. If the information is not included, skip that company and go on to the next.
Remember, you’re looking for transparency as well.
How Much Does Home Warranty Coverage Cost?
The cost of a home warranty depends on the type of coverage you choose, the add-ons you include in your plan, where you live, and the length of your contract.
However, you should not purchase a home warranty based on price alone. That’s only one factor.
The best home warranty companies for you should cover a wide range of systems and appliances, have higher payout limits, show flexibility in paying their claims and have good customer service.
For a home warranty, you are paying for two things: your premium and your deductible.
Your premium is the cost you pay every month or year for the entire duration of your contract.
The deductible used interchangeably with the term “trade service fee” is the cost you pay on every occasion you need help from a service technician.
On average, for full coverage from a home warranty policy, expect to pay around $50 per month, or as low as $25 a month and as high as $75, depending on what company you choose.
The premium will go up if you purchase add-ons.
The premium will go down if a company allows you to pay for a full year of coverage upfront, if you choose a higher service call fee, or if you sign up for multiple years of coverage at the time you purchase the coverage.
The average rate for the trade service fee is $75.
Some companies allow policyholders to choose the cost of the service fee that they like, which is $75, $100, or $125.
The lower service fee allows you to pay more each month.
A higher service fee allows you to pay a lower amount.
What are the Coverage Cost Limits on Home Warranties?
All home warranty companies put a cap on how much they will pay to cover your claim.
Like a homeowners insurance policy, a home warranty company may not cover the full amount of the repair or the replacement.
The repair or replacement will depend solely on the type of coverage you have.
Once again, it’s wise to read the fine print---the terms and conditions--in your service contract carefully and determine if you will benefit from a home warranty policy based on the age, the condition, and the quality of appliances and systems that you have in your home.
If your contract states that the maximum dollar amount on your gas oven coverage is $1,500, then that’s the most the company will contribute to repair or replace the oven.
When a company puts an annual cap on how much it will pay for a claim, you may have to pay out of pocket if the claim exceeds the cap.
Therefore, you should only sign up with a provider that can give you coverage that you are comfortable with. That's the best way to protect your finances.
How Do Home Warranties Work?
Most home warranties work the same. Here are the steps:
- If a covered system or appliance fails to work or breaks down due to normal wear and tear, the homeowner will file a claim online or through the phone.
- In turn, the company will call one of the providers that they work with.
- The provider or the technician will then call the homeowner to make an appointment.
- When the technician comes to your home, the technician will fix or repair the problem.
- If the item can’t be repaired, the company will pay to replace and install it, depending on the contract coverage.
- Lastly, the homeowner pays the visit's deductible or the trade service fee.
When Do Home Warranties Pay Claims?
There’s a waiting period after you purchase a home warranty. It’s usually 30 days, which means you can’t file a claim or request a service visit until after those days pass.
A home warranty company will usually tell you that they will send a technician to your home within three to five business days after you file a claim.
But some are quicker and can send out a technician within 24 hours, but that mostly happens if there’s an emergency.
How Long Do Home Warranties Last?
Usually, a contract with a home warranty company is sold for a one-year term.
But homeowners are allowed to renew their policy year after year, which means their systems and appliances are maintained without gaps in coverage.
Is a Home Warranty Worth It?
Yes and no.
If you have it, you’ll be spared forking out a lot of money if your systems and appliances unexpectedly fail.
But if your items are brand new or are still covered by a manufacturer’s warranty, you don’t need it.
Do You Need a Home Inspection Before Your Purchase a Home Warranty?
Most companies won’t require you to get an inspection before your coverage begins.
But it’s a good idea to get an inspection before moving into your new home so you can have an idea of what appliances or systems have pre-existing conditions that may not be covered by your policy.
What is a Pre-Existing Condition and Why Doesn’t a Home Warranty Pay for It?
A pre-existing condition is a defect or mechanical failure that may not have been detected by a visual inspection exam or mechanical test.
This issue pre-dates the purchase of your home warranty, i.e., they were present before the warranty began, and some companies only cover items purchased after the start of coverage.
You need to consider if a home warranty covers dated systems or appliances. In most situations, breakdowns due to aging are not covered.
And if you failed to maintain a system or appliance or if you are having issues that stem from your neglect or mishandling. your warranty can deny your claim.
On occasion, though, a warranty may cover pre-existing conditions, due to a few reasons, including:
- You got your home inspected, and the appliances all work properly.
- The system or appliance had a fault that couldn’t be detected during a visual examination.
If you want to invest in your old-ish appliances and systems, home warranty companies cover items with pre-existing conditions.
It’s worth finding one, and to put you on the correct path, consider that our list pick, American Home Shield (AHS), doesn’t exclude items with pre-existing conditions.