What do you understand by the word – home warranty system? Is the home warranty necessary as you are planning your move? How can you get home warranty? Which company offers the best package? Relax, as we discuss all you need to know about the best home warranty companies in the USA.
When it comes to planning budget for home expenses, most buyers rely on home warranties for peace of mind. However, others see home warranties as a waste of money.
Your finances, specific needs and the condition of your new residence will determine your need for a home warranty. Gladly, we will be helping you here.
A home warranty is an optional service that offers coverage on home systems and appliances such as plumbing, refrigerators, heating, washing machines, and air-conditioning for a certain period, mostly one year.
You are certainly looking to opt for the best home warranty company for you as you are in the market searching for a home warranty to protect your building.
The best home warranties provide coverage for things that your homeowner’s insurance doesn’t. They provide you with transparent and great policies, as well as excellent customer service.
They also allow you to customize your plan. It’s difficult to figure out the company that will offer you the most protection you need, as there are many of them offering home warranty plans across the nation.
We have compiled this guide to help you determine the perfect home warranty company (the same way share the best long distance movers or best moving truck rental services) for you to avoid you guessing or fall a victim of a bad company.
Firstly, you need to know what a home warranty is and what it offers.
What is a Home Warranty?
A home warranty is a single protection plan purchased by homeowners as coverage on the cost of replacement and repairs of their home systems and appliances.
Generally, you can see it as insurance for your home systems and appliances. A home warranty is a yearly contract that pays for the repairs and replacements of your major home appliances.
This includes dishwashers and home systems such as an HVAC. A condition of home warranty implies that appliances and systems it covers must be regularly maintained.
However, only basic appliances and features are covered by home warranties, unlike insurance that provides cover for huge items like the building itself and your personal household possessions.
Generally, certain events such as flood, fire or burglary must happen before you can be compensated for belongings when it comes to insurance.
On the other hand, you may only need malfunction or general wear and tear of an appliance in home warranties.
How Does Home Warranties Work?
Some home warranty plans make provision for certain types of coverage, but many of them in the same way and contain popular verbiage. Here are the steps required for home warranties:
Step 1: If a home system or appliances malfunction or breaks, the homeowner contacts the home warranty company.
Step 2: The home warranty company contacts a provider with which they partner with.
Step 3: The provider contacts the homeowner to schedule an appointment.
Step 4: The provider rectifies the problem. The home warranty company pays the cost or repair or replacement of the appliance based on the contract coverage.
Step 5: The homeowner pays a little amount for the trade service fee for the appointment, which is between $75 and $100 (as of 2019). This amount is negotiable whenever you register for the plan.
USA Top 5 Home Warranty Companies of 2020
There are challenges attaching to locating a perfect home warranty company. While many of them are available in the country, you have to do your homework to choose the best one for your specific needs.
We understand how challenging this may be, and thus we conducted our research and arrived at the list of some of the best home warranty companies in the country.
1. American Home Shield
Overall Rating 5 / 5
This company offers you the opportunity to add only what you need in its ‘build your own warranty’ plan.
You can build your warranty when you add a part of the appliance plan with a system plan because your price will be the same even if you select only 5 appliances or systems to cover.
American Home Shield not only allows you to customize your plan, but it also pays you an amount that exceeds customer’s expectations from a warranty. The company will pay you about $3,000 for most items it covers.
The contract issued by the company is easy to understand, and it conforms to the industry standards; the website is also user-friendly for filing and tracking of online claims.
This company provides service in all states in the country except Alaska, and it has enough number of technicians in many cities.
Basic plan costs from $5 per month and about $40 to customize your plan.
2. Choice Home Warranty
Overall Rating 4.9 / 5
It pleases us to find out that this company receives thousands of positive reviews from reputable and reliable sources like TrustPilot and Consumer Affairs.
The majority of the reviews talked about how expedient their repair job was and the courtesy displayed by the technicians, which is often necessary when looking for any service such as home warranties.
Choice Home Warranty provides you with great service and also makes it easier for you to determine the service you will get with an actual sample of the contracts located in the navigation menu.
Just open the User Agreement after you select “Homeowners.” This comes with a lot of convenience for customers and also addresses the readiness of the company to be transparent about fees, coverage, and caps.
We also find out through reading the sample contract that Choice is the only company that offers the lowest cap on the plumbing system among all the home warranty companies and plans we researched.
The company’s cap on plumbing system is $500 per contract term – a fee not too cheap but low when compared to the plumbing cap of American Home Shield at $1,000.
The difference between the caps if you live in an older apartment building is much.
There is a plan for about $30/month and a uniform $60 fee on the warranty per service call. Choice also provides uninterrupted customer service. Your call will be attended to any time and any day, even during holidays.
The online claim process is also nice. Although we don’t really go for the cheap per-appliance or system caps from Choice, we, however, like the lower premium and service costs from the company.
3. First American Home Warranty
Overall Rating 4.9 / 5
This company offers quality service fees ranging from $75 to $100 service for its entire plans which can help you in saving some money.
This is an excellent deal when you equate the fee with the Basic plan at $28/month, which would finally cost $336 per annum if paid upfront.
First American has just thirty days recall period and is the lowest among the list of home warranty providers we researched.
This implies that some customers may miss out on reimbursement of the service fees for repairs or replacement. However, the company does not provide home warranty services to eight states in the country, which include Illinois and New York.
The other six states are not revealed even when we speak with their reps. they can only supply information on a home warranty for the address of the property given to them.
There is no information on the website or in the contract, which we see as an oversight.
4. Select Home Warranty
Overall Rating 4.8 / 5
Unlike other home warranty providers reviewed, you can enjoy the service of Select Home Warranty without them conducting any home inspection.
Three standard warranty plans are available with Select alongside the uninterrupted claims line and free coverage on the roof. The plans include Bronze Care, Gold Care, and Platinum Care.
Gold Care is made to cover important home systems like plumbing, electrical and heating, while the Bronze care is designed to cover refrigerator, oven, dishwasher and other standard appliances.
Platinum Care is the most common plan, and it combines the two other plans. It covers both the standard appliances, important home systems as well as other popular extras such as ductwork.
Select is not concerned about the make, age, or model of your items, and a local professional can do repair or replacement of items for a small service fee.
You have access to an unlimited number of covered service repairs with the 1-year warranties from Select. Those planning to save some money can opt for any of Select’s various sign-on specials all through the year.
Overall Rating 4.8 / 5
The majority of home warranty companies only guarantee their work for durations of thirty to sixty days. However, this company guarantees its work for a full 180 days.
If they have to repair any item that develops the same fault after the first repair, you won’t have to pay for it.
TotalPotect provides you with a systems plan, an appliance plan and a combined warranty that covers both appliances and systems.
The cheapest appliance plan begins at $18.95 per month, and it includes big appliances such as dryers and refrigerators.
The combines plan offers the most protection, and it costs $35.95 per month or more depending on the additional services you choose.
A deductible of $125 is charged on each service visit on all three plans which to us is higher. However, it may worth the pay as the company offers a considerable guarantee duration than most companies.
What does a Home Warranty Cover?
The contract of the home warranty’s service provider will determine what it covers. A standard plan that combines the appliance and system will generally include coverage for plumbing, HVAC, electrical, water heater, clothes washer, kitchen appliances, and dryers.
You can also opt for optional coverage for items like septic pumps, guesthouses, pools, secondary units, spas, well pumps, and stand-alone freezers.
You have to read the plan to know what item it covers because there is a difference in each contract.
Home appliance warranty covers:
- Range, cooktops, ovens
- Washers and dryers
- Built-in microwaves
Home systems warranty covers:
- Water heaters
- Air conditioning and heating
- Garbage disposals
What Home Warranty does not cover?
Typically, the things not covered by home warranties include code violations, items under home insurance coverage, pre-existing conditions, poor maintenance or installation, unusual wear and tear, commercial-level appliances or items under manufacturer’s warranty.
Home warranty providers will not pay for charges that are above stated limits or exclusions in their service contract.
Types of Home Warranties
Providers sell home warranties that meet specific needs. Here are some of the popular types of home warranties:
1. Homebuyer’s warranty:
People mostly purchase home warranties immediately they purchase the house. These warranties take effect on the closing day, and it is available for purchase to the buyer or the buyer’s realtor.
This type of warranty is available for sale to homebuyers after closing and it is for 90 days.
2. Homeowner’s warranty:
Home warranty is available for homeowners at any time. Whether you are preparing your home for sale or you plan to live in it for some time, you can find a home warranty that matches your specific needs, as providers are committed to proving home warranties that match various needs.
3. Seller’s home warranty:
Buying a home warranty while your home is still on the market is a wise move. Although you will be able to quickly fix any current issues while the house is for sale, you will also be able to get the deal completed on time by providing a home warranty to potential buyers that they can transfer to their name once you close the deal.
It is advantageous to buy home warranties when your home is for sale to relieve your potential buyers of the thought of repairing the home in the future. This can even improve the value of the home.
4. Home warranties for rental belongings:
The security that comes with home warranty comes of great benefit to landlords. You have protection over unplanned costs when any of your major appliances or systems malfunction, and you can as well include the warrant price into your general expenses and make adjustments to your rental fees to provide coverage for the cost.
5. New construction warranty:
Home builders provide new construction warranties to provide additional protection to new properties. You can get these warranties in different terms, starting from a year warranty to make sure the total quality of the construction to ten or twenty-year warranties for important items like a home’s foundation.
6. Other home warranties:
Warranties are not only meant for single-family houses. Warranties are also available for mobile homes and condo home.
How to choose the Right Home Warranty?
There are two things you should consider when choosing a home warranty; your budget and the number of appliances you would like to cover in your plan.
You may want to consider a plan with fewer appliances but allows you to pay lower monthly premiums if you have a tiny budget.
You have to pick the right company alongside the right plan for your warranty needs and financial status.
Below are the factors to consider to choosing the right home warranty:
1. The Home Warranty Coverage you need
Look around your home or your potential home. Make a list of oldest items that are likely to malfunction soon.
Your real estate agent might be able to get you this information from the sellers and listing agent.
Consult the owner’s manuals of your older appliances and systems to determine their age.
There is an average lifespan for every appliance or system, so for you to figure out the home warranty coverage you need, make a comparison of the age of your appliances and system to their lifespans.
You can find the average lifespans for the majority of the most popular systems and appliances in this workbook and can be used to figure out the most needed coverage.
2. Locate Home Warranty Companies Nearest to you
The next step after making a list of home warranty required in your home is to locate home warrant companies nearest to you.
Although there are national home warranty companies that provide service to the whole country, it is advisable to consider local companies to see what options you have when going for home warranty coverage.
Request for quotes from the home warranty companies in your area and you can also check their plans and pricing. You can also request a sample home warranty contract from these companies for better research of what agreement you are entering if you should buy a home warranty from any of the warranty company.
3. Compare Coverage of Home Warranty Companies
Go through the sample contract you received from the home warranty companies in your area after identifying the systems and appliances that need warranty coverage in your home.
Note down which companies offer the exact coverage that matches your home needs.
Make sure you read the entire terms and conditions, as some of them might not cover parts of your appliance or system in specific plans or even the companies.
For instance, Landmark has some home warranty plans that cover systems such as your HVAC but also has higher coverage plans that cover more costly items such as Freon recovery and recharge.
4. Focus on the Exclusion and Limitations of the Home Warranty Company
The next step is to go through the exclusions and limitations. Some of the companies have total limits where they will just pay a specific amount from each repair in the home.
Once they reach the limit, the entire repairs and replacements become your responsibility. Other home warranty companies place a certain amount of dollar limits on some items, which implies that the rest is from your budget.
For instance, there is a $1,500 limit from a service provider on diagnosis, repair and/or replacement of a kitchen refrigerator.
Receiving of cash-in-lieu option is also available with some home warranty companies which enable you to get the exact amount the home warranty company would have spent to replace your appliance or system.
You can then use this fund to purchase an expensive appliance model of your choice.
5. Read Home Warranty Reviews
Lastly, take your time to find out what previous consumers are saying about the home warranty companies you’ve gathered.
Focus on the number of positive reviews and compare it with the number of negative reviews, and make sure you take a glance at a few of each review.
Also, check how the companies are responding to their customer’s review.
If they are trying to help people that leave bad reviews from their response, then you should know they have great customer service. You might want to consider another home warranty company if you noticed they don’t respond to reviews.
How much does Home Warranty Cost?
Home warranty service contract costs an average of $300 to $600 annually. Your location and the level of coverage required will determine the cost of your home warranty service.
Home warranties are generally renewed every year, but you will be charged monthly for the cost of your contract, which makes the average monthly cost range between $25 and $50.
You will also be charged a trade service call fee alongside the cost of the plan each time a technician is being sent to your home after you contacted the provider for a claim.
Service call fees are paid to the technician directly just like insurance deductibles, and it generally costs from $50 to $100 per each service call visit.
Some warranty providers don’t charge extra fees if there is a need for multiple visits for the same repair, while others may charge on each visit or charge a service fee if repeated visits occur outside a certain period such as 60 days from the first and original repair.
Typical Home Warranty Costs’ Summary
Annual total plan cost
Average monthly payment
Service call fees per visit
Other Costs Associated with Home Warranties
It depends on your policy as you may have to pay for repairs from your pocket when the limit of the maximum payout of your policy has been reached, or if the repair required is to be done on an item that is not included in your contract. For instance, let’s assume your refrigerator developed a fault and can’t be repaired.
The overall cost of repair of your refrigerator is $2000, but the coverage limit on your warranty policy to the repair or replacement of your refrigerator is $1,500.
In most cases, your warranty provider will give you a cash payment of $1,500, and you would have to add $500 for the remaining coverage from your pocket.
Price comparison of home warranty
Combo Plan with add-on
Basic / Standard Combo
All you need to do about Home Warranty before Moving
Having knowing the benefits of purchasing home warranty plans for your home, here is all you need to do before moving to enjoy the service in your new home:
Research what Home Warranty actually covers
Are you not sure whether or not to go for a home warranty? Firstly, try and understand what home warranty covers and doesn’t cover by reading about it.
The majority of home warranties provide coverage for the cost of repairing and replacing many home systems and appliances. You what home warranty cover and do not cover, as explained above.
Some warranty providers may also allow you to customize your plan to add some items such as your swimming pool to the home warranty policy.
Make sure you research different home warranty providers to know what they offer before signing a contract.
Request Information about the Existing Home Warranties from the Seller
If there is an existing home warranty, check it very well? Are there individual warranties for each appliance? Endeavor to ask these questions before you buy a home.
You might be surprised when the seller offers to pay part or all of the buyer’s home warranty for the first 12 months.
Inspect the Condition of the Appliances and Systems in your Potential Home
Are you planning to purchase a new home? Make sure your inspectors conduct a good check on the appliances and systems in your potential home.
They should be able to give you a complete report of the condition of these items. This will help you in deciding whether or not you need a home warranty or which plan to opt for.
For example, if an appliance is old enough to crash soon, it is advisable to purchase a home warranty or ask the seller to repair the item before closing.
Is a Home Warranty Good for you?
There is no telling whether a home warranty is a good thing for you or not. If any issue should occur on your system or appliance, you will need to take responsibility for the repair or replacement.
If a home warranty covers such an item, you may end up paying little or nothing for the repair or replacement.
When to Consider Home Warranty
Here are the situations that would make you feel that home warranty is essential:
- If you plan to purchase an older house: Buying an older home comes with various benefits, but it may also contain many outdated systems. With each year passing, it is more likely that old systems will wear out. And the possibilities of being able to repair them once they wear out are hard. You should consider a home warranty if your new house is 20 years old or more.
- If the mortgage is already costly:Did you already spend above the family’s budget on your new house payment? Having to repair a home system after paying a huge fee for your mortgage could be tough. Purchasing the right warranty will greatly help.
- If you are worried about one or two home systems:Do you always get the feeling of visiting electricians each time you open the breaker box? Your instinct may be telling you something. You could be doing yourself a big favor by purchasing a warranty here. Just be sure the warranty covers the item of worry.
When a Warranty doesn’t make much Sense
Although we cannot decide for you whether to purchase a home warranty, Moving Feedback can share with you its thoughts on when the warranty doesn’t make much sense:
- When purchasing new construction: The cost of repair could be little when you move to a new home with new appliances and an HVAC system. You may later buy a home warranty when the need arises. Note that even new items can break; we are just considering generalities here as to the good condition of a new thing.
- If there are warranties on the system and appliances you want to cover: You may not need a home warranty on any of your appliances or systems that are currently having a manufacturer’s warranty. There is a long term warranty and service contract on many HVAC systems by the company.
- If you have money to cover the repairs: You could save up to $60 or more budget for home warranty in the bank specifically for home repairs. Although you would be taking a high risk at repair cost before you can save enough money, after many months and years, you could be able to fund any self-warranty.
Do home warranties justify my money?
A home warranty can cost between the average of $540 and $840 annually and might even go higher depending on your plan. In most cases, you might be saving a lot of money on home repairs and replacements of appliances through home warranty.
However, you might feel like a home warranty is a waste of money if your warranty doesn’t cover what you need. Make sure you shop around to determine the best home warranty for your need to avoid such feelings.
We recommend getting multiple quotes and looking for warranty providers that allow you to customize your own plan.
Is roof among what home warranty covers?
The home warranty plan you choose will determine if the repair of your roof will be included in the coverage. Some warranty providers include roof leaks coverage in their plans while others offer roof protection as additional service to their normal plans.
If roof damage doesn’t come with your provider’s standard plans, make sure you include it in the coverage as it may come at a great cost to repair your damaged roof.
In an actual sense, what is covered by a home warranty?
This depends on the company or plan you choose. In most cases, any mechanical components of your appliances necessary for its smooth running such as a drain pump in your washer or your water heater’s pilot burner are covered.
But parts like knobs and covers are not usually covered. A repair is said to be cosmetic if it only involves cracked knob or dial. These parts can be repaired or replaced by calling your home warranty service provider or any independent handyman.
However, it is important to review your contract and consult your warranty company to determine what appliance and system are included in your coverage.
How does the home warranty provider decide whether a repair or replacement is needed?
Home warranty companies will opt for the replacement of an appliance if they figure out it is beyond economical repair. If a replacement is required, the company will either purchase a base model for you (the standard version of the appliance with no enhancements and color of their chosen) or pay you cash to get it by yourself.
Note that you will be responsible for the disposition of the old unit if there is a need to remove it away.
Is mold covered by a home warranty?
Home warranty does not provide coverage for detection, identification, repair or removal of toxic or hazardous materials such as mold.
Which home warranty company is best for me?
To determine the best home warranty company for your needs, it will be based on what you are looking to cover. Whether you need an appliance-only plan or higher claims caps.
We advised that you begin your research with our top pick above and follow our guide to get the best home warranty company for your home needs:
Best 5 Home Warranty Companies – Our Picks
- American Home Shield Home Warranty – Offers Best Customizable Plans
- Choice Home Warranty – Offers Best Customer Satisfaction
- TotalProtect Home Warranty – Has best Liability Caps
- First American Home Warranty – Is best for Low Fees
- Choice Home Warranty – Is the most responsive
How do I claim home warranty?
The steps required in making a claim should be stated in your contract. Typically, you will be asked to contact the 24/7 customer service through their hotline, but be careful of contracts that state that the company is not available on holidays.
For most companies, you will be asked to wait for two days after calling them, as they will contact a service technician, who will also contact you to schedule an appointment.
But then, do not lose focus on the specifics; having weekends combined with holidays, leaving you stranded for four days before companies can attend to you does negate the advantage of home warranty. Some companies act fast beyond expectation.
What if repair or replacement of an appliance doesn’t work?
Ensure a recall period or workmanship guarantee is included in your contract as some problems may be difficult to fix at a go.
If you find out that your appliance or system is still not functioning well within this recall period, your warranty service provider will arrange for another appointment without charging you.
For example, TotalProtect offers complete 180-days recall periods, while American Home Shield offers a reasonable 60 days recall period. But many home warranty companies don’t offer a recall period at all.
Is home warranty cancellation allowed?
You should be given 30 days after applying to cancel your contract with no fine. You may be charged a cancellation fee after the 30 days.
For instance, the cancellation fee is charged at $50 by First American, the same amount charged by American Home Shield on your monthly contract payment.
Although most warranty contracts are good for just a year, however, warranty companies like TotalProtect will automatically renew your contract every 12 months.
We advised that you read the renewal information to know if there is any update to the pricing as well as terms and conditions.
Congratulations! You have purchased a home and home warranty at the same time, and you are set to relocate. Go through the best moving companies in our wide network of local and long-distance moving companies or moving truck rentals to find a trustworthy mover.
With our user-friendly and easy to navigate the website, you can find and book any mover of your choice by first request a quote from any of them. There is no cause for alarm as all the movers in our network possess licenses and are properly insured.