Updated April 13, 2022
Reading time: 6 minutes
When a home warranty is right for you, which company should you trust?
You’re most likely to learn of a home warranty when you buy your first home. You’ll probably hear it from your real estate agent. Many sellers purchase one to entice home buyers, and usually, it’s a good deal. Still, home warranty plans are about as mysterious as they get. There is a lot of variation in the product across the industry. Unfortunately, home warranty satisfaction is a mixed bag.
Have you checked out our article about the customer suitability of home warranties? Please read that before deciding if a home warranty is right for you. If you’ve read it and you’re ready to buy, this article will help you complete that mission. Let’s go.
But if you’re looking for home insurance, hop on over to the Insurify home insurance comparison tool! Access and compare real quotes in just a few minutes. It’s totally free!
The purpose of a home warranty service is to cover maintenance costs and sudden expensive repairs. It covers major appliances like your stove and home systems like central heating. A home warranty is a way some homeowners protect home systems and more.
Every home warranty service contract is unique, so read the fine print carefully. Most home warranty coverage includes:
HVAC (heating and air conditioning)
Plumbing (with limitations)
Garage Door Opener
When something goes wrong with a covered system, the homeowner calls their home warranty company. A representative will then dispatch an approved provider to your home. You pay a small service fee, and the approved provider fixes what’s wrong.
The hope is that annual premiums and service fees are less expensive than using a contractor.
A home warranty is great for people in two specific scenarios:
People who depleted their emergency funds to purchase a home.
People who want someone else to deal with the maintenance of the home.
People who can see a reasonable benefit in return for carrying costs.
In the first scenario, a home warranty covers you while you rebuild your savings. A low-cost warranty policy that covers big threats is a good choice.
In the second, the homeowner may have plenty in savings. But, for whatever reason, wants someone else to deal with the behind-the-scenes stuff. In this scenario, a more comprehensive home warranty plan is likely the best fit.
The final scenario is for people willing to review five or more home warranty companies. These homeowners look for policies that offer specific protections. For example, coverage tailored for homeowners buying a fixer-upper. These extended options are definitely more expensive than usual. However, if you’re anticipating a lot of headaches, it can be a useful buffer.
We have a whole article that details how home warranties work and whom they’re most suitable for. Be sure to check that out if you’re still deciding if a home warranty is right for you.
Choosing the right company may seem daunting. There are a ton of options available. They all have their own advantages and disadvantages. As you read over these options, you want to look for a company that fits your needs. That means it will cover the systems most vulnerable in your home but leaves out things you don’t have.
When it comes to home warranty costs, you’ll want to note all the ways a company may charge you:
Remember that a company with a low annual rate could be more expensive due to a higher service fee. Whichever company offers the best coverage at the best price is the right company for you. If you need a tiebreaker, check out customer reviews.
Lastly, do consider the level of coverage and service you get for the price. One company may be more expensive than another, but doesn’t exclude “improper maintenance.” More limited plans are cheaper, but you’re more likely to be denied a claim.
We compiled this list using customer reviews and complaints across the internet. Companies with great reviews and low complaints got higher rankings. We also looked at valuable perks like covering “unknown pre-existing conditions.”
|Consumer Affairs||4.5 Stars|
|BBB||A+ Rating, 4.5 Stars, 380 Reviews, 54 Complaints (all resolved)|
|Trustpilot||4.5 Stars from 477 Reviews|
American Residential Warranty tops our list because of overall customer satisfaction. In it’s ten years, it’s received a relatively low number of complaints. Many customers leave glowing reviews for service. Customer service representatives can be reached over the phone and by chat online.
The company offers a wide range of options to customers, serving several price points.
|Name||Price||What it covers|
|Kitchen Plus||$29||Kitchen appliances including refrigerator, range/oven/cooktop, dishwasher, built-in microwave, exhaust fan(s), garbage disposal, and water heater.|
|Heating & Cooling||$39.99||Central heat and air conditioning plus humidifier (part of the air conditioning system) and internal electrical system.|
|Platinum||$49.99||Combines everything in Kitchen Plus with everything in Heating & Cooling.|
|Premier Platinum||$59.99||Everything in Platinum, plus plumbing system and stoppages (fixtures not included), ductwork, garage door opener, refrigerator ice maker, ceiling fans.|
|3-in-1 Bundle||$109.99||Everything in the Premier Platinum plus washer/dryer and two packages: Deluxe Advantage and Ultimate Electronics Protection (more on these below).|
|4-in-1 Bundle||$124.99||Everything in the 3-in-1 plus sewer and water lines.|
Washer/dryer coverage can be added to any plan option for an additional fee. Deluxe Advantage adds these advantages to your policy:
A/C Refrigerant and coils
Plumbing faucets and fixtures
Toilets and internal mechanisms
Garage door springs and tracks
The Ultimate Electronics Protection includes:
Home theater system
Gaming consoles, including and-held
|Consumer Affairs||4.25 Stars|
|BBB||C Rating, 4.5 Stars, 389 Reviews, 338 Complaints|
|Trustpilot||4 Stars, 160 Reviews|
Despite the low Better Business Bureau rating, we think The Home Service Club is doing a pretty good job. Reviews are consistently glowing. There are no restrictions on the age of covered items. Plus, it’s nationwide with a 24/7 customer service line.
Prices are given by estimate, so plans are a little more tailored than the competition. However, The Home Service Club does tend to be more expensive, too. It offers three plans, one of which is designed for buying or selling a home. Here’s a rundown of all plans:
|Name||Cost||What it Covers|
|Standard Plan||Varies||Covers air conditioning and heating systems, plumbing systems, water leaks, water heaters, electrical systems, ceiling fans, central vacuum(s), garbage disposal, garage door opener. Appliances covered include a built-in microwave oven, dishwasher, refrigerator, oven range or cooktop, trash compactor, built-in food centers, washer/dryer, free-standing ice makers.|
|Comprehensive Plan||Varies||Covers everything in standard, plus ductwork, re-circulating hot water pump, gas leaks, sump, pump, whole house exhaust, and attic fans, instant hot, cold water dispenser, pest control, telephone wiring, alarm wiring, smoke detectors, doorbells, whirlpool motor and pump assemblies, plumbing stoppage coverage.|
|Real Estate Plans||Varies||You can choose from three plans: basic, standard, and comprehensive. The standard and comprehensive plans are the same as the above. Basic covers only air conditioner and heating, electrical systems, water heater, plumbing, plumbing storage, and ductwork (no appliances). Each plan has real estate-specific perks that should make selling and buying easier (more on this below.|
There are many add-ons available as well, including roof protection, pool, and spa equipment. All real estate coverage plans include bonus perks:
Rust and corrosion
Code violation fees
Refrigerant reclaim, recapture, and disposal
Lack of routine care and maintenance
Improper installation (if it causes a problem)
Undetectable pre-existing conditions
These perks are a pretty big deal, as most of them are not part of an average plan.
|Consumer Affairs||4.8 Stars|
|Trustpilot||4.4 Stars, 575 Reviews|
Liberty Home Guard gets the okay from us for its affordability. No plan breaks the 50 dollar mark unless the homeowner chooses add-ons. There are also no limitations for the age of equipment.
|Name||Cost||What It Covers|
|Appliance Guard||>$30||Washer/dryer, refrigerator, built-in microwave, dishwasher. Garbage disposal, ranges/ovens/cooktops, ceiling fans, exhaust fans, garage door openers.|
|Systems Guard||$30||Air conditioning, heating, ductwork, plumbing, electrical, water heater.|
|Total Home Guard||$45||Everything in the appliance and system guard plans.|
Optional add-ons offered by Liberty Home Services include:
Pool and spa
Limited roof leak
Floor and carpet cleaning
Septic system pumping
|Consumer Affairs||4 Stars|
|BBB||A- Rating, 2 Stars, 383 Reviews 2826 Complaints|
|Trustpilot||4 Stars 128 Reviews|
The number of complaints on BBB’s website is pretty shocking. Yet, reviews on Trustpilot and Consumer Affairs remains strong. We’re not sure why the inconsistency. We can tell you that complaints on BBB most often cite “Advertising/Sales Issues.” We recommend carefully reading all the fine print.
All Cinch plans offer a 180-day guarantee of work done in your home. It does not exclude unknown pre-existing conditions. Here’s a rundown of the three plans offered by Cinch:
|Name||Cost||What It Covers|
|Appliances Plan||$27.99+||Washer/dryer, cooktops, dishwasher, built-in food center, free-standing ice maker, built-in microwave, range exhaust hood, refrigerators, built-in trash compactor, and wall ovens.|
|Built-In Systems Plan||$32.99+||Air conditioning, heating system, ductwork, attic fans, ceiling fans, central vacuums, doorbells, electrical system, garage door openers, garbage disposals, instant hot/cold water dispenser, plumbing su7stem, smoke detectors, sump pump, toilets, water heater, built-in whirlpool/jetted tub.|
|Complete Home Plan||$39.99+||Covers everything in both the Appliances and Built-In Systems packages, plus a Homeowners Insurance Deductible Reimbursement, which reimburses up to $500 toward your home insurance deductible per year in the event of a claim.|
It’s important to note that pricing is the starting point. Each homeowner gets a personalized quote based on the appliances and/or systems in their homes. So, you should expect to be quoted more than the lowest price quoted on Cinch’s website.
|Consumer Affairs||3.75 Stars, 504 Reviews|
|BBB||B Rating, 3 Stars, 197 Reviews, 169 Complaints|
|Trustpilot||3 Stars, 1 Review|
America’s First Choice Home Club rounds out our best-of list with solid Bs across the board. What we like most about AFC is that homeowners can choose their technicians. Plus, repair work is covered until the end of the policy, so as much as three years.
AFC offers four plans and six optional add-ons.
|Name||Est. Cost||What It Covers|
|Systems Plan||$40||Air conditioner, heating system, water heater, electrical system, plumbing system, ductwork.|
|Silver Plan||$45||Washer/dryer, refrigerator, oven, cooktop, dishwasher, garbage disposal, garage door opener.|
|Gold Plan||$50||Everything in the Systems and Silver plans.|
|Platinum Plan||$60||Everything in the Gold plan, plus plumbing stoppages, built-in microwave, and ice maker.|
The actual cost of a plan from AFC depends on the home appliances and/or systems in your home. Monthly costs are also more expensive if you choose lower service request fees or if you choose any of the add-ons:
Pool & spa
Hot water dispenser
Tankless Water Heater
A homeowners insurance policy covers you, your home, and the stuff in it from perils. A home warranty protects your home by providing maintenance and repair costs. It only covers appliances and systems. A home warranty is not a substitute for good home insurance.
In short, no. Home warranty companies are not the same as home insurance companies. However, several states do impose regulations on home warranty companies. This is usually through its Department of Insurance. Many states do not have any official regulatory body for home warranty companies.
Using a home warranty company can be cheaper for some homeowners. However, luck has a lot to do with whether a home warranty pays off. Home warranties only reimburse a set amount usually called coverage limits. Be sure to look at the coverage limits in your home warranty carefully. Does the plan pay out substantially more than what you pay in annual and service fees? If not, this plan is probably not a good buy. If the payout is no more than what you’d keep in a savings account, this product is probably a waste of your money. However, it’s ultimately up to you. Do you prefer being in charge of your home on all things? If so, you'll prefer to find trusted technicians and contractors on your own. If you’re not handy in the least and really want someone else to be the point person, then a policy may be worth it.
Yes, you do have options. Essentially, you can build your own plan. First, you’ll want to research local service providers, like technicians and contractors. They can provide you with home repair services. Many offer maintenance plans to keep things running smoothly. As an added bonus, when you need to make a service call, they’ll already know you. In addition, you can also learn basic home maintenance. Tasks, like cleaning the gutters and fixing clogged sinks, will save you hundreds. Plus, you’ll get a rush of confidence like that of Ron Swanson. Lastly, it’s important to know you’re not over-covered. A major appliance malfunction could be covered by a manufacturer’s warranty. If you buy an appliance on your credit card, your credit card company may offer an extended warranty.
If your home is brand new, your major appliances are likely covered by a manufacturer’s guarantee. Same with your major systems. You may also have some sort of builders warranty. If a newly built home does not come with a builders warranty, be wary.
Most home warranty companies exclude fixing issues listed on the home inspection. That is unless the policy specifically states otherwise. Be sure to read the fine print, even if the large print says it covers “unknown preexisting conditions.”
J.J. Starr is a health and finance writer with a background in banking, lending, and financial advising. She holds a Series 6, FINRA, and life insurance licensure and a master's degree from New York University. Through her writing, she strives to use her decade of experience to help consumers make sound financial choices. Connect with J.J. on LinkedIn.Learn More