Best Home Warranty Companies

Annual Costs

When comparing home warranty companies, you'll find that there is a wide range in annual fee costs. Some home warranty companies charge one comprehensive, annual fee, while others charge a lower annual fee but add in extra fees throughout the year. Don't assume that one company is a better choice just because it has a lower annual fee.

Take note that some home warranty companies will have different pricing based on your state. When evaluating cost, make sure you're looking at your state-specific cost, not the company's average cost across all states.

Service Fees

Be aware that most home warranty companies charge a trade call service fee every time a technician visits a customer's home, regardless of whether or not the item that needs repairing has been previously assessed. You'll owe a service fee even if the damage or problem isn't covered by your home warranty.

Most often these service fees must be paid at time of service and don't contribute to the repair cost. Failing to provide immediate payment could result in the suspension of the warranty coverage. Keep this in mind if you can't guarantee the ability to pay repeat service fees, or simply if that is something you don't want to deal with altogether.

Coverage

It is important to understand the specific coverage offered and any eligibility requirements regarding the condition of your appliances. There are usually two types of coverage plan options, generic overall coverage plans and customizable coverage plans:

• Overall coverage — Before choosing a home warranty company, review their state-specific guidelines to make sure they offer their full and best services in your state and for the condition of your appliances. Understand what kind of appliances and systems a home warranty company covers. For example, your protection plan may only cover one appliance. If you have a second of that same appliance, it might not be covered. Getting a home inspection from someone can be a good resource for getting accurate information on the problems that could occur with your appliances and what shape they are in.
• Customizable coverage — Typically, customers prefer a general protection plan package, but it may not include all appliances or systems they want protected. Because of these plan limitations, choosing a home warranty company that allows you to add optional coverage for a specific home system or additional appliance can ensure you have the protection you want.

Coverage Limits

Home warranty companies typically have a coverage limit for each covered appliance or system. The coverage limit is the maximum a company will pay towards covered damage.

Home Inspection

In some cases, customers prefer not to have a home inspection because it makes the transaction process a bit more complicated. Home inspections can have additional costs, so some customers prefer to save money up front and go with a company that doesn't require a home inspection.

However, getting a home inspection could give you peace of mind and help you determine what appliances and systems will be covered in your home.

Customer Service

Finding a home warranty company with good customer service and dedicated workers is essential.

A large part of home warranty coverage is the customer service and maintenance assistance customers receive from the company. Some warranty companies have faster representatives and technicians that respond to claims and service requests. Ask yourself the questions below as you evaluate home warranty companies:

• Does the company provide an estimated completion date for their services?
• Does the company respond quickly to service requests?
• Does the company have 24-hour customer service?
• Does the company have good customer service reviews and no history of warranty scamming?
• Can I request service on weekends and holidays?

Warranty Claim Denial

Many assume that home warranty companies actively look for ways or loopholes to deny a claim, and while that has and does occur, there are some valid reasons for why a company would deny a claim:

• Appliance or system isn’t covered — Home warranty companies typically offer various plans that cover different appliances and home systems, and they will only cover what is outlined in that plan and your contract.
• Appliance wasn't properly installed — Home warranty companies don't have any responsibility for or obligation to service a previously existing appliance that's been installed incorrectly.
• Appliance or system violates safety code requirements — Consider scheduling a home inspection to ensure that all appliances and systems are in working order and not in violation of safety codes.
• Appliance is not well maintained — If an appliance or system has issues due to apparent owner neglect or mishandling, your claim will likely be denied. Thus, it is important to use appliances and systems with care because you can’t assume that your warranty will cover anything that is damaged because of your own neglect.
• Damage was caused by pets, vermin, or insects — Home warranties don’t cover damage incurred by pets, vermin, or insects. Take precautions and preventive measures to keep your appliances and systems in good shape and out of reach from animals and/or insects.
• Coverage limit has been exceeded — Home warranty plans typically have an annual coverage limit and a payout cap. If either of these are exceeded, service will likely be denied. To avoid a claim denial because your coverage limit has been exceeded it could be a good idea to keep track of all previous claims and costs.

Home warranty companies don't usually cover all systems and appliances under all circumstances, especially if they have pre-existing conditions or problems. Thus, it is important to read and understand what is included in your contract. If you have any specific questions about your contract and coverage, speak with your home warranty company.

You may be more eligible for one home warranty plan over another, so the research on claims and coverage can be essential. Most of the time this information is laid out in easy-to-find sample contracts, but if not, talking with a home warranty representative may be helpful. 

Customer Reviews

Customer reviews offer valuable insight on the customer experience. Pay attention to the cumulative review data like average star ratings and ratio of positive reviews to negative reviews. This data offers a quick snapshot of how well a home warranty company treats its clients, particularly if the company's review count is high.

American Home Shield and Choice Home Warranty have some of the highest review counts on BestCompany.com with over 10,000 reviews. Although most companies listed have fewer, you'll find companies with several thousand or a few hundred. The review data on these companies will still help you gauge the customer experience.

In addition to considering the aggregate data, spend time reading home warranty reviews. Since companies can change over time, you'll get a better read on the company if its reviews are recent. As you read reviews, you'll learn what the company does well and what problems people have encountered with the company. 

You won't find a company without negative reviews. However, note the ratio of negative reviews to positive reviews and use the information in negative reviews to decide what questions to ask before you purchase and be aware of potential issues that may arise.

Real Estate Packages

Many potential home warranty buyers are real estate agents wanting to make sure their homebuyers are covered. If you're a real estate agent, consider what home warranty companies offer such packages and if they meet your needs.

Having a home warranty can help close a sale and some home warranty companies also offer real estate agents educational materials for no charge.

Homeowners Insurance vs. Home Warranties

Understanding the difference between homeowners insurance and home warranties can help you determine if a home warranty is right for you.

Homeowner's insurance is an insurance policy that covers accidental damage done to your home — damage from fire, theft, and some natural disasters.

A home warranty is a service contract that will replace or repair the appliances you have in your home.