Real estate listings often mention home warranty plans as a perk to entice buyers. But those buyers might wonder exactly what benefits a home warranty can provide for them. While the best homeowners insurance companies help cover the cost of repairing damage to a home caused by certain weather events, accidents, fires, or vandalism, they won’t offset the financial hit caused by the failure of a major home system or appliance. A home warranty can, though. In fact, the best home warranty companies often cover the cost of maintenance, repair, and sometimes replacement of whole-home systems and certain appliances during the period the policy covers.
A home warranty is a type of service contract designed to meet the needs of a wide range of homeowners. For instance, some home warranty providers may offer basic home system service contracts that limit coverage to electrical, plumbing, and HVAC systems; appliance coverage that includes kitchen and laundry appliances; and combination policies that have both. These service contracts are very specific about what they cover. Whereas homeowners insurance policies typically cover everything unless the event is expressly excluded in the contract, home warranties are the opposite: If a system or appliance is not listed in the policy, it’s not covered, so it’s critical for homeowners to read their policy carefully before signing to make sure they understand the policy fully.
The best home warranty companies offer a wide range of coverage options and high coverage limits, along with clear, easy-to-understand conditions. They work with reputable technicians or, in some cases, allow customers to select the technician of their choice. A selection of add-ons to customize the coverage can also be a crucial feature. Finally, a great warranty company needs to provide options (usually balancing the cost of the premium and the per-call service charge) that work within a range of budgets. This guide features a curated selection of the best home warranty companies for homeowners to consider.
- BEST OVERALL: American Home Shield
- RUNNER-UP: AFC Home Club
- BEST CUSTOMER SERVICE: Choice Home Warranty
- BEST GUARANTEE: Cinch Home Services
- BEST ADD-ONS: Liberty Home Guard
- BEST BANG FOR THE BUCK: American Residential Warranty
How Does a Home Warranty Work?
A home warranty policy begins with the payment of an annual premium (though some companies permit quarterly or monthly premium payments). When the policyholder needs a repair or service for a covered system or appliance, they will contact the warranty company to file a claim. The policyholder will pay an agreed-upon service fee, after which a qualified technician will come to their home and perform the repair or replacement at no additional cost, up to the coverage limit (if one exists).
Home warranty policies may have coverage limits per service call, event, appliance, and year, but these will be specified in the agreement so there will be no surprises for homeowners along the way. The cost of the premium and service charges can be significantly less than one or two service calls without a warranty, especially in older homes or those with aging appliances and systems, so many homeowners find the cost of a home warranty to be worth it.
What to Consider When Choosing One of the Best Home Warranty Companies
As home warranties have grown in popularity, many start-up companies have joined the more established warranty companies in the field. Determining whether or not a company is reliable, follows good business practices, and provides good customer service can be tricky. To make sure they choose the best warranty company for their needs, homeowners will want to assess their coverage needs, consider their budget, and compare how each company handles various aspects of coverage. Checking with the Better Business Bureau and the National Home Service Contract Association (which offers accreditation for home warranty companies), consulting friends and neighbors, reading home warranty reviews, and collecting policy quotes from several companies can also make choosing a provider more manageable.
Service Area
A provider’s operational footprint is an important consideration for homeowners when searching for the best home warranty company. Some companies offer national coverage, while others are regional; but even then, a homeowner will want to look at the home warranty company’s coverage network. The service area is an important consideration, especially if the company uses preapproved contractors. But just offering policies in a homeowner’s area doesn’t mean the company has a great network of qualified technicians. And if a home is outside a technician’s regular area, the homeowner may find themselves waiting an extended period for service. With companies that allow the policyholder to select the contractor or technician, this is less of a concern, but still something to think about in case their preferred contractor is unavailable.
Appliances and Systems in Need of Coverage
Home warranty coverage can be very extensive. It can protect home systems such as electrical, plumbing, and HVAC, and sometimes water heaters, garbage disposals, and garage door openers. In addition, a home warranty plan can cover kitchen appliances, including refrigerators, ovens, stovetops, and ranges; wall-mounted microwaves and hoods; and dishwashers. They do not usually cover second refrigerators (such as those kept in a garage), countertop microwaves, and other small appliances. Some may exclude the main refrigerator’s ice maker. Before investigating warranty companies, the homeowner can perform a quick appraisal of the systems and appliances they want to cover so they can make sure the home warranty companies on their shortlist offer the coverage they need.
Sometimes, a homeowner may have appliances or systems in their home that are not traditionally covered in a home warranty policy, such as a swimming pool or a hot tub. In that case, they’ll want to look for a company that offers add-ons to the standard policy. However, the homeowner will also want to check to see how much those add-ons will cost to make sure their premium doesn’t skyrocket by adding them.
Plans
Rather than settling on the first home warranty company they come across after doing an online search, homeowners will want to compare each company’s specific offerings. They can contrast each company’s policy terms, plan options, and costs, keeping their specific needs in mind, to determine which will best fit their needs.
Most companies will generally offer whole-home system plans, in addition to appliance, combination, and add-on plans for items not covered in the basic plans. In addition, warranty companies will typically offer tiers of service, including a range from basic, less-expensive packages to premium plans that are costly but include more coverage.
Average Pricing
A great benefit of a home warranty plan is the ability for the homeowner to budget for repair and maintenance services. While the average cost per month (or per year) of the home warranty plan will stay the same once a homeowner has signed a contract, that cost will vary significantly based on the type of coverage selected, the coverage limits, and the technician fees. It’s a good idea for homeowners to understand their budget as they begin to compare companies and products. A lower budget doesn’t necessarily mean less coverage; the total cost of a home warranty balances the premium, service fees, and coverage limits. For example, customers whose budget necessitates a lower initial cost can choose a higher service fee to keep their premium lower; they’ll only need to pay the service fee if they actually file a claim. Each company will offer different packages to allow flexibility in the average monthly cost, which means homeowners can tailor their coverage to their needs and budget.
Quote Process
Most home warranty companies offer free quotes, which makes comparing the offerings easier, but the process of actually getting those quotes differs from company to company. While some companies will happily provide a quote online, others prefer that shoppers call and speak directly with an agent who can help them customize their coverage and hunt for the right combination of options. In the end, there’s a good chance that a homeowner will speak with an agent even if they begin the application process online, as the default quote-generating system won’t ask all the questions necessary to customize the coverage, which will result in a more generic quote that may or may not accurately reflect the homeowner’s actual costs were they to take out a policy.
Homeowners will need to provide some basic information in order to get an accurate quote. Most reputable companies won’t give a generic quote without specific information because that would lead to an inaccurate estimate. But this can be frustrating for people trying to get a basic idea of costs. Shoppers will likely need to provide the home’s address, their ownership status, and information about the home’s age when getting a quote.
Alternatively, homeowners can call the customer service line and speak to an agent instead. Representatives from the best home warranty companies are often eager to help shoppers find the right coverage level. Because of their deep knowledge of the plans and policies the company offers, representatives may be able to help shoppers find a better deal on the coverage they need than they would find on their own.
Claim Process
What happens when a homeowner needs to call for service? Each company will have a slightly different claims procedure, so it’s a good idea for the homeowner to ask specifically how this works with each company they are vetting. Nearly all home warranty companies have call centers or hotlines for customers to call when they have a claim to file, but many companies also have online or app-based claim-filing options. Customers will want to consider their preferred method of filing a claim and make sure their chosen company has this option available.
The best home warranty companies will typically have a call center or online portal that is open 24/7. When a customer needs service badly enough to submit a claim in the middle of the night, they need service promptly—not after the office opens in the morning. Companies will also vary regarding payment methods. Some companies expect a homeowner to pay for the technician up front and then get reimbursed afterward, while others will have a homeowner submit a bill, and the company will pay the technician directly. Homeowners will want to compare the process at each company and be sure it’s one they’re comfortable with before they sign up for coverage.
Service Fee
Each time a claim is filed, the policyholder will pay a flat service fee, which will be agreed upon signing the contract and listed in the policy for reference. Policyholders may be able to choose from a range of service fees, depending on the company and warranty plan. Policies may also stipulate what that fee covers; most often, the fee is per event. If a washing machine needs to be repaired, for instance, but the technician needs to order the part and return on another day to install it, the service fee will cover both visits and the cost of the part. Some companies limit how many technician visits can be covered by one service charge, after which another service charge is applied. Homeowners can ask their chosen home warranty companies how their service fees work to make sure they fully understand what they may need to pay when filing a claim.
Comparing the service fee options and examining how they track with the premium cost can help homeowners determine their total average monthly cost. Usually, a higher premium will align with a lower service fee, and a lower premium aligns with a higher service fee, but not all companies balance these the same way. Homeowners can compare how much each plan will actually cost by estimating how many service calls they’re likely to schedule in a given year and then adding up the number of service fees they would be charged, plus the annual or monthly premium to get their estimated annual cost.
Approval Parameters
Few things are as frustrating for homeowners as researching and choosing a home warranty policy only to have the company reject their claim. Policyholders can avoid this frustration by reading through their policy terms, as reputable home warranty companies will include the requirements for claim approval clearly in their contract. Many home warranty companies have a minimum 30-day waiting period after the policy purchase before a claim can be filed, for instance. This protects companies from buyers who note a problem, buy the policy to cover it, and then immediately file a claim to avoid paying the full repair price. Some companies do waive this requirement, however, so homeowners will want to ask for the specifics when getting a quote from each company.
Home warranties will often not cover appliances or systems that failed before the contract’s execution date, those in disrepair, or those that have not been properly maintained. For example, if the furnace fails and the technician determines that the filter has not been changed for years, the company may reject the claim. One of the best ways for homeowners to protect against this type of claim denial is to schedule a home inspection before purchasing a policy. A home inspector will assess the health and maintenance level of the systems to be covered and attest that they’re in working order, making it more likely that claims will be approved. If there are any issues, the homeowner can repair them before taking out a home warranty so they are starting fresh.
Those who have recently purchased a home can find it frustrating to discover that the previous owners did not maintain the house in a way that would allow for warranty claims to be approved. Some warranty companies offer “fresh start” or “clean slate” options for new home buyers, in which they’ll honor claims as long as the new owners practice appropriate maintenance after they’ve taken ownership. If this situation applies to a homeowner, they will want to seek out companies that provide this option.
Choice of Technician
When choosing a technician, contractor, or repair person for a home project, many homeowners carefully vet the individuals or companies they choose. After all, the workers will be in their home, potentially digging around in the attic or basement, and homeowners want to make sure they’ve chosen someone qualified and trustworthy. Some home warranty companies will allow customers to select their preferred contractor, as long as they meet the specifications the home warranty company provides and don’t charge more than the warranty company permits. Other home warranty companies prefer to choose the technicians and contractors themselves, both to make sure the workers are qualified and so that the company can minimize costs. If a homeowner has found a warranty company with many service professionals in their area and doesn’t already have established relationships with other technicians, this may not be a concern. Others may not be comfortable using a technician they haven’t personally vetted; in that case, it would likely be preferable to select a home warranty company that enables homeowners to select their own technicians.
Our Top Picks
Choosing between home warranty companies can feel overwhelming, especially if a homeowner is considering this type of coverage for the first time. We evaluated a number of factors such as plans, pricing, claims process, and more to choose the best home warranty companies.
Photo: ahs.com
Why It Made the Cut: American Home Shield is an established company that offers a wide range of customizable coverage options, including several that aren’t available from other companies, in a price range comparable to companies providing fewer services.
American Home Shield lists more than 23 home appliances and various services as options for covered systems, including several items that aren’t even available in the add-on packages from other companies. In addition to the expected systems and appliances, American Home Shield offers coverage for pools and spas, roof leak repairs, and code violations and the associated repairs. Along with a wide range of covered appliances and systems, American Home Shield offers its clients several perks that encourage regular maintenance to make system failures less likely. The company’s highest-cost ShieldPlatinum plan offsets the up-front cost by offering free HVAC tune-ups and unlimited air-conditioning refrigerant, so clients can save money on other services that could otherwise be quite costly to pay for out of pocket.
American Home Shield offers warranties in every state except Alaska, with good coverage and a broad network. Its website can be somewhat difficult to navigate, but with a bit of patience, users can find the information they need or call a customer service rep for help—and the benefits American Home Shield provides more than make up for the minor inconvenience of a slightly clunky interface.
American Home Shield also covers the repair and reinstallation or replacement of incorrectly installed appliances as long as the installation was initially done by a qualified professional. Costs are comparable to similar competitors, but the limits on coverage are quite generous, so policyholders are getting more coverage for a similar cost.
Specs
- Service area: 49 states
- Plans: ShieldSilver, ShieldGold, ShieldPlatinum
- Average monthly pricing: $59.99
- Claim process: Online or phone
- Service fee: $75 to $125
Pros
- Relatively high coverage caps
- Coverage for improper installations and repairs
- Unlimited A/C refrigerant and free HVAC tune-ups with ShieldPlatinum plan
Cons
- Website is somewhat user-unfriendly
Photo: afchomeclub.com
Why It Made the Cut: AFC Home Club’s phenomenal guarantee on work performed and 5-year rate lock alone would have put it near the top of our list; the additional security benefits included with membership cinched it.
Around-the-clock customer service via phone, email, or online portal is the first sign that AFC Home Club takes serving its customers seriously. The easy-to-navigate website breaks down exactly what is covered and what is not—even going so far as to provide sample contracts for each plan so customers can read the fine print at their leisure before signing an agreement. The language is clear and easy to follow, providing prospective customers with the details they need to make an informed decision about their home warranty coverage.
Offering warranties in the contiguous 48 states and Alaska, AFC Home Club provides an exceptionally flexible stable of packages based on how many appliances and services are included or expressly excluded. In addition, the options for add-on coverage are significant, so policyholders can easily customize their warranty plan. Given the many opportunities to build a package that suits a homeowner’s needs, it’s not surprising that the quote process can be a bit tedious and lengthy. Those additional steps can help shoppers better tailor their quote to their needs and get a more accurate price estimate. AFC Home Club offers members additional benefits, including free credit monitoring and discounts on home security devices, home appliances, and home systems.
Most impressive are the guarantees: AFC provides a 5-year guarantee on the policyholder’s monthly rate from the time of signing, so customers can accurately budget for their warranty coverage. AFC also offers a 3-year guarantee on work. This eclipses the standard 30- to 60-day guarantees provided by most companies. AFC also allows customers to choose their own technicians, so customers know the work done in their homes will be held to a high standard.
Specs
- Service area: 49 states
- Plans: Platinum, Gold, Silver, systems
- Average monthly pricing: $50
- Claim process: Online or phone
- Service fee: $75 to $125
Pros
- Customers can choose their own technician
- 5-year guarantee on monthly rate
- 3-year guarantee on work
Cons
- Quote process can be drawn out and complex
Photo: choicehomewarranty.com
Why It Made the Cut: Choice Home Warranty assigns multiple representatives to each claim so customers can always connect to someone familiar with their case, rather than having to re-explain their situation to a new representative every time they call.
Choice Home Warranty boasts over 15,000 professional case managers to serve its clients in all U.S. states except Washington and California. Multiple case managers service each claim to avoid details slipping through the cracks—any time a client needs an update or has a question, chances are good that one of the case managers will be available to help without requiring the policyholder to give the same claim information again. This saves time and frustration at a moment where frustration is probably already high.
Most home warranty companies protect themselves from fraud by sharply limiting coverage for the first 30 days after the policy is purchased. Choice has a similar waiting period but does provide a waiver if a new client can show that they were covered by another warranty company immediately before purchasing the new policy. This is excellent news for those switching from another warranty company and an incentive for homeowners considering a change in warranty provider.
Choice’s coverage packages are thoughtful, and while its roof leakage coverage is capped at $500, Choice is one of the relatively few companies that offer roof leakage coverage at all. Shoppers will need to provide some personal info to get more details about their policy options, but a customer service representative is always available via phone or online portal to answer questions and guide homeowners through the quote process. In addition, Choice’s average monthly rates and service fees can be relatively affordable, depending on the specific terms selected by the policyholder.
Specs
- Service area: 48 states
- Plans: Basic Plan, Total Plan
- Average monthly pricing: $55
- Claim process: Online or phone
- Service fee: $85
Pros
- Relatively affordable monthly cost and service fee
- 30-day waiting period waived with proof of coverage from another company
- Multiple representatives assigned to each claim
Cons
- $500 maximum for roof leakage coverage
- Website is somewhat user-unfriendly
Photo: cinchhomeservices.com
Why It Made the Cut: For customers who own older homes with appliances that have some pre-existing issues, Cinch Home Services can be a great option—it’s one of the only home warranty companies that covers appliances with rust, corrosion, and other signs of trouble from the moment the policy is activated.
Cinch Home Services stands out among the best home warranty companies as there’s no waiting period before new clients can make a claim, no coverage rejection for questionable maintenance or pre-existing issues, and extensive add-ons that include high-cost items such as swimming pools, septic systems, and well pumps. These features make Cinch Home Services a fantastic option for those with older homes, houses that haven’t been well maintained in the past, or systems that might be on the brink of failure. There are three service tiers cater to different customer needs, and generous add-ons are available. If an appliance has failed, Cinch offers a replacement payout of up to $2,000, so policyholders don’t need to worry about having to replace their appliances with lower-quality brands. This generous coverage does come at a cost, as Cinch’s service fees are at the higher end of the spectrum. However, the monthly price is lower than average, so the balance of cost and coverage may even out.
Cinch Home Services offers around-the-clock customer service with the options for live chat online or telephone calls, which means there’s always a representative available to help out policyholders—and Cinch promises to respond to queries within 24 hours. The company also guarantees repairs for a generous 180 days, so policyholders can schedule follow-up repairs on the same appliance or system within 6 months without paying an additional technician fee.
Specs
- Service area: 48 states
- Plans: Appliances, Built-in Systems, Complete Home
- Average monthly pricing: $32.99
- Claim process: Online or phone
- Service fee: $100 to $150
Pros
- Coverage for pre-existing conditions like rust or corrosion offered
- Coverage begins immediately after purchase
- 180-day guarantee on workmanship
Cons
- Service fees tend to be higher than others on the market
Photo: libertyhomeguard.com
Why It Made the Cut: Ideal for the homeowner with unique coverage needs, Liberty Home Guard offers packages and add-ons that aren’t found elsewhere.
Liberty Home Guard seems to specialize in doing what other companies don’t. Its three basic plans include what one would normally expect: an appliance plan, a home systems plan, and a combination plan. The difference becomes evident with a glance at the list of available add-ons. First, Liberty offers coverage for professional-grade appliances. Because pro appliances are expensive to repair and usually require a specially trained technician, they are excluded from many home warranty policies, but Liberty offers this coverage for a reasonable charge. Other hard-to-find add-ons include coverage of sump pumps, secondary spas, pest control, carpet and floor cleaning, and preventive gutter maintenance cleaning. If homeowners need these extra coverage options, Liberty can provide all of them under the same home warranty policy.
Some of Liberty’s policies restrict claims for 60 days after purchase, but it may be worth the wait for homeowners who prefer to choose their own technician when filing a claim. Liberty allows policyholders to select a technician they already trust rather than take a chance on a professional chosen by the warranty company. The company’s month-to-month contracts are another unique option that can keep policyholders from paying for more coverage than they need, especially if they are considering selling their home sometime soon. Liberty also offers low service fees—as low as $60—to help customers keep their total cost of coverage down. If customers have a question or need assistance, they easily reach out to an agent using the company’s online chat function.
Specs
- Service area: 48 states
- Plans: Total Home, Systems, Appliance
- Average monthly pricing: $60
- Claim process: Online or phone
- Service fee: $60 to $125
Pros
- Add-on coverage for services like gutter cleaning and carpet cleaning
- Special coverage for pro-series appliances
- Month-to-month contracts available
- Convenient online chat function
Cons
- Some plans restrict claims until 60 days after purchase
Photo: americanresidentialwarranty.com
Why It Made the Cut: American Residential Warranty offers customizable plans with one of the lowest service fees in the industry and a low average monthly price, offering value at a lower cost than its competitors.
American Residential Warranty offers a robust coverage package at one of the lowest overall costs on the market. Its service fees are relatively low for the industry, which helps customers reduce their out-of-pocket costs when filing a claim. There are small sacrifices in exchange for the low rates, one being the relatively small total payout limits on some claims. However, the convenience of flexible monthly, quarterly, or annual payment plans allows shoppers to budget and spread out their payments while still maintaining their coverage. Packages are zeroed in on what homeowners might need most, and policyholders can customize their plans to extend coverage as needed. For instance, American Residential Warranty offers additional electronics coverage to protect laptops, computers, and other electronic devices that wouldn’t typically be included in a home warranty.
Taking a unique middle-of-the-road approach to the “who picks the technician?” question, American Residential Warranty recognizes that clients may want to choose their own technicians. In order to maintain its reputation and low costs, the company permits policyholders to choose the contractor—but the technician must be approved by American Residential first. This allows the company to ensure quality work while keeping costs down. American Residential is also available in all 50 states and provides solid coverage with flexible payment plans at a relatively low cost, making it a great value for homeowners.
Specs
- Service area: 50 states
- Plans: Kitchen Plus, Platinum Premier, 4-in-1
- Average monthly pricing: $64.99
- Claim process: Online or phone
- Service fee: $55
Pros
- Relatively low service fees
- Customers can choose their own technician
- Additional electronics coverage
Cons
- Annual coverage cost caps can be relatively low
Our Verdict
American Home Shield offers the most comprehensive coverage for most home warranty shoppers at a lower rate than many comparable competitors. The customization options are varied, and the stability of a company offering home warranties for more than 50 years is unparalleled. AFC Home Club’s stellar guarantees and competitive services make it another solid choice for most homeowners.
How We Chose the Best Home Warranty Companies
We evaluated a wide range of home warranty companies through extensive research and analysis. To establish the top home warranty companies, we came up with a methodology that based our assessment on concrete categories we could evaluate and compare across all reviewed providers.
First, we chose the elements of the best home warranties that we wanted to consider. Coverage options and limits, pricing, customer service options, packaging, and the details in the fine print were determined to be the most critical aspects when selecting a home warranty company. Next, we scoured each company’s website, looking for transparency, clear communication about the services provided, and costs. Finally, we looked for elements that made a company stand out from the pack—unique aspects that elevated a company providing competent, reliable service and gave us a reason to look more closely.
Before You Choose One of the Best Home Warranty Companies
Homeownership is expensive. Most people budget for mortgage and insurance payments, but not all homeowners are in a position to build a large emergency fund, especially in the first few years after a home purchase. The combination of homeowners insurance and a home warranty can protect a homeowner’s savings from being wiped out by an unexpected home system or appliance failure.
That said, if a homeowner is in a position to build substantial savings and can comfortably cover the cost of maintaining, repairing, and replacing the systems and appliances in their home, a home warranty may be an unnecessary expense. The homeowner might save some money using a home warranty if they have to make several service calls in a row, but if they can readily afford repair costs on their own, then a home warranty may not be a necessary expense. Those who own newer homes may also choose to go without a home warranty, since the systems and appliances in their homes are newer and less likely to have issues in the immediate future (though some may choose to purchase a home warranty for new construction for added peace of mind).
Once a homeowner determines that they need home warranty coverage, they will want to read the whole policy in full before they sign their agreement. Everything policyholders need to know about their warranty is in that agreement—every cost, every limit, every reason a claim might be rejected. It’s advisable for policyholders to read it carefully so they know exactly what they’re purchasing and how to use their warranty. This can help set realistic expectations about exactly what will be covered, and prevent any nasty surprises, such as a claim being denied.
Cost of Opting for One of the Best Home Warranty Companies
Pricing models for home warranties are based on a policyholder’s choice of coverage, the service charge selected, and any additional coverage added to the plan. Policyholders can expect to pay between $264 and $1,425 a year (or an average of $600) for home warranty coverage. If a homeowner wants to file a claim and schedule a technician, they’ll need to pay an additional service fee for each event, which can run anywhere from $55 to $150 depending on the company.
To keep costs down, homeowners may be able to negotiate premium rates down in exchange for a higher service fee or lower coverage caps; this is especially useful if they own a home with newer appliances in good repair but still want the peace of mind a warranty provides. Not all home warranty companies will offer this flexibility, so it’s a good idea for a homeowner to ask about this before signing any paperwork.
The Advantages of Using One of the Best Home Warranty Companies
Home warranties provide a strong layer of financial protection for homeowners and anyone on the hunt for a new house. Homeowners looking to put their house on the market can even buy a sellers home warranty to protect their appliances and systems during the sale process. The cost of repairing or replacing a major home system can be astonishing—and potentially even ruinous—especially for someone on a tight budget.
Home warranties can also provide much-needed protection for homeowners with older houses or aging appliances and home systems that are nearing the end of their lifespan. Having a warranty in place can help homeowners who lack the experience or skill to tackle repairs on their own keep their major home systems and appliances running properly. Working with the best home warranty company provides several clear benefits to the policyholder:
- Homeowners are protected from the financial burden of a major system failure.
- Warranties make it easier to budget for system and appliance repair and replacement.
- New home buyers are financially protected from unexpected (and potentially unaffordable) repairs shortly after the home purchase.
- Home sellers are protected from paying for unexpected repairs during the sale process.
- Warranties eliminate the panic of finding a qualified technician when a repair is urgently needed.
FAQs
Home warranties are often confused with other services, such as homeowners insurance or manufacturer’s warranties. Even after that confusion clears, many people have a lot of questions about what a home warranty is and what it covers. Addressing some of the most frequently asked questions can help homeowners better understand home warranty coverage so they can find the best home warranty for their needs.
Q. What does a home warranty cover?
A home warranty is a service agreement that covers the cost of maintaining, repairing, or sometimes replacing whole-home systems and appliances included in the policy documents. Policyholders pay an annual premium and a flat service fee per call. The agreement typically lasts for a year, at which time homeowners can cancel, renew, or purchase coverage from a different home warranty company. Some home warranties cover roof damage as standard or optional, while others may offer extra coverage for swimming pools or hot tubs.
Q. What does a home warranty not cover?
Home warranties don’t cover damage. If a tree falls on a home or a neighbor backs into a garage door, a home warranty can’t help—but the best homeowners insurance often can. Warranties are limited to covering events that happen due to age or natural wear and tear. Warranties also don’t cover the damage caused by a system or appliance failure, so if a pipe bursts, the warranty will cover the repair of the pipe but not the damage caused by the water from the pipe flooding the basement.
Q. How much do home warranty companies charge on average?
On average, the cost for a home warranty ranges between $264 and $1,425 a year. Service fees, written into the contract and charged each time the policyholder requests a service call, range between $55 and $150. The total home warranty cost will be determined by the policies, terms, and add-ons that are included in the warranty.
Q. Can I cancel my home warranty at any time?
Most often, yes. Policyholders may have to reach out to a representative of the home warranty company and write a notice of termination. Depending on the terms of cancellation written into the policy document, policyholders may also be subject to a cancellation fee, so they’ll want to make sure they’re aware of this before signing any paperwork.
Q. How long does a home warranty last?
Most home warranty contracts are for 1 year, although some have longer periods and a few have month-to-month contracts. Some policies include an auto-renew feature, so if policyholders don’t plan to continue coverage, they will need to make sure to cancel the policy before it renews.
Q. Does a home warranty cover HVAC systems?
In many cases, a home warranty will cover HVAC systems to help pay for repairs related to wear and tear and aging. Home warranties may not cover HVAC systems that have been poorly maintained or have been damaged—either accidentally or intentionally.
Q. Does a home warranty cover plumbing?
Home warranties often cover plumbing as part of their policy terms. Homeowners may want to note any exceptions to that coverage, though, such as damage caused by leaky pipes, storms, or natural disasters.
