A home warranty is a yearly service contract that covers repairs and replacements if major home systems and appliances break from normal wear and tear. Having a plan can save you from unexpected repair costs and the hassle of finding a technician. Keep reading to learn about this type of home protection, from coverage details and costs to our recommendations for top home warranty providers.
Did You Know?
- In the last 30 days, more than 2,500 people bought home warranties from the above providers. Liberty Home Guard is our most popular provider, with 55% of buyers choosing to cover their homes with an LHG plan.
What Does a Home Warranty Cover?
Home warranty plans cover the repair and replacement of your home’s major systems and appliances when they wear out. There are three primary types of home warranty coverage: system plans, appliance plans, and combination plans.
- System plans cover whole-home systems such as HVAC, ductwork, electrical, plumbing, water heaters, garbage disposals, smoke detectors, ceiling and exhaust fans, and doorbells.
- Appliance plans cover major appliances such as refrigerators, dishwashers, ranges, ovens, stoves, built-in microwaves, clothes washers and dryers, garage door openers, and free-standing ice makers.
- Combination plans cover both systems and appliances. Some home warranty companies allow you to customize your plan by choosing the items you want covered.
Most companies also provide optional coverage for miscellaneous items such as pools, well pumps, spas, and septic systems. Customers can add these items to their plans for an additional monthly cost.
Note that home warranties don’t cover all types of damage to covered items. A home warranty company will pay to repair or replace covered items that break due to wear and tear. Damage from accidents, lack of maintenance, improper installation, or repair, rust, or corrosion is not covered. Also, cosmetic damage that doesn’t affect the item’s function won’t fall under the terms of a home warranty.
How Much Does a Home Warranty Cost?
Home warranty costs typically range from $564–$984 per year, or about $47–$82 per month, based on quotes we gathered from leading national providers. Plans that only cover appliances or systems usually fall at the lower end of that range, while more comprehensive options with both coverage types and add-ons cost more.
In addition to the monthly premium, you also pay a service call fee whenever a technician visits to assess or repair a covered item. These fees generally range from $75–$125 per use, although some companies offer options as low as $60. This fee, sometimes referred to as a deductible, is paid directly to the technician at the time of service.
Before purchasing a plan, ask if any discounts or promotions are available. Some companies may offer deals such as a free month of service on an annual plan or discounted or free add-ons.
Benefits of a Home Warranty
By covering common home appliances and systems in case of wear-and-tear damage, a home warranty offers many benefits:
- Saves homeowners money on expensive repair and replacement costs.
- Provides an easy way for homeowners to tackle repairs promptly.
- Includes the repair services of a provider-vetted local expert, so you don’t have to call around to find a repair technician.
- Acts as a valuable real estate incentive if you sell your home.
How Does a Home Warranty Work?
Home warranty coverage typically kicks in 30 days after your first payment. Once the warranty period begins, you can file a service request with your provider if a covered item breaks down. A trusted technician will come to your home and diagnose the problem. The repair will usually be covered if the breakdown is due to wear and tear.
The claims process is generally straightforward and follows these steps:
- A covered appliance or system breaks down due to normal wear and tear.
- Call your home warranty provider to file a claim, or submit it online.
- Once the company processes your service request, it sends a technician to address the broken item within 48 hours.
- The technician examines the system or appliance at your home and recommends a repair or replacement. At this time, you’ll pay the service call fee.
- If the repair is minor enough and the contractor has all the necessary parts, they can immediately repair it. They’ll schedule a follow-up appointment if a larger repair or replacement is needed.
- Instead of a replacement, the home warranty provider may offer you the cash value of the appliance up to the coverage limit.
Home Warranty Regulations
Unlike insurance companies that must have a license from the National Association of Insurance Commissioners and the Federal Insurance Office, home warranty companies aren’t regulated by federal law.
According to the Service Contract Industry Council (SCIC), a national trade association that works with lawmakers to develop uniform federal regulations, states regulate the home warranty industry under consumer protection laws. These home warranty regulations vary from state to state.
For example, the Florida Office of Insurance Regulation handles home warranties in Florida, whereas the Texas Real Estate Commission regulates home warranty companies in Texas.
Some states may require a home warranty company to be licensed, while others will just need a company to register. Licensing requires a provider to meet specific criteria, pass competency exams, or get certified before doing business.
Registration may include completing a form and paying a fee to be an authorized provider in a state. However, registration doesn’t necessarily require a company to get certified or meet specific standards before operating.
Because of the differences in state regulation—and lack of regulation in some states—a few home warranty companies are scams and give trusted home warranty providers a bad name. Review our article on regulation for home service contracts for more information on how states regulate home warranty companies.
How To Buy a Home Warranty
Before purchasing a home warranty, consider a few factors to ensure you get the best protection plan for your home.
- Pick the type of plan you want: Some companies organize their plans based on the number of items covered under each plan, while others divide coverage by the type of item (systems versus appliances). Take note of the age and condition of items in your home and weigh your coverage options before buying a plan.
- Look at coverage caps: A home warranty provider usually places coverage caps on certain appliances or systems. This limited amount typically covers repair costs, but if your home item needs replacement, it might not cover the entire bill. For example, if your electrical system has a $2,000 coverage cap, you’re responsible for paying any amount past that limit.
- Think about the price you’re willing to pay: If you’re on a budget, plans below $50 a month may suit your preferences. However, the coverage caps for these plans are generally lower and the service fees are higher. Most companies will let customers pay monthly rather than yearly to make plans slightly more accessible for those who don’t wish to pay a large fee upfront.
- Consider customer service: If an item breaks down in your home, you’ll want a responsive and helpful customer service team to help you fix it. The best home warranty companies offer 24/7 customer service and have an online portal or app where you can file claims and check on their status.
- Learn about the company’s reputation: In a saturated industry, it can be difficult to determine which companies are legitimate. Look for a provider with at least a B rating from the Better Business Bureau (BBB) and read third-party customer reviews to get a good idea of what it’s like to work with the company.
Recommended Home Warranty Providers
If you’re ready to buy a home warranty, we recommend considering the following top home warranty providers:
- American Home Shield has over 45 years of experience and is one of the most trusted names in the industry, based on our review. The company offers generous coverage caps and comprehensive plans, including coverage for both known and unknown preexisting conditions. This makes the company a good option for homes with older systems and appliances.
- Choice Home Warranty offers combination plans at an affordable rate of less than $70 per month. Plans include $3,000 coverage limits for most items and workmanship guarantees for 90 days for parts and 60 days for labor. These guarantees can provide peace of mind by ensuring covered repairs are backed for a set period, reducing the risk of additional out-of-pocket expenses if an issue recurs.
- Elite Home Warranty offers over 30 add-on options and a customizable plan model, making it a good choice for tailored coverage. The company offers three predesigned plans plus a fully customizable option to suit different homeowners. You can adjust your plan to fit your home’s specific coverage needs, making sure you get the right level of protection without overspending.
We recommend getting a quote from at least three providers to compare your options and find a price that’s right for you.
| Company | Star Rating | BBB Rating | Monthly Cost | Service Fee |
|---|---|---|---|---|
B | $36–$100 | $100–$125 | ||
B | $60–$68 | $100 | ||
NR | $57–$68 | $65–$125 | ||
B | $45–$60 | $70 ($150 for after hours and weekends) | ||
B | $77–$130 | $100–$125 | ||
B | $44–$82 | $75–$125 | ||
NR | $57–$68 | $65–$125 | ||
B+ | $51–$68 | $100–$150 |
FAQs About Home Warranties
Are home warranties worth the cost?
A home warranty is worth it if you have older systems and appliances or want coverage for unexpected repairs. However, if your appliances are new and covered by a manufacturer’s warranty, you may not need one yet.
How long do home warranties last?
Most home warranties last a year, though some companies will allow you to enroll in a multi-year plan if you pay upfront.
How can I renew my home warranty?
To renew a home warranty, contact your provider to begin the renewal process. Some companies will auto-renew the policy for you.
When can I buy a home warranty?
Whether you’ve lived in your home for years or you’re buying a home and want to ensure it’s protected, you can purchase a home warranty. Note, however, that home warranties won’t cover items with preexisting conditions, and there’s typically a 30-day waiting period after you purchase the policy.
What do I do if a claim is rejected?
If your claim is denied, review your contract terms to verify that your item receives coverage. You can appeal to your provider or file a complaint with the Better Business Bureau (BBB) if it’s unresponsive. For suspected fraud, contact the National Home Service Contract Association (NHSCA) or your state’s district attorney’s office.
Is a home warranty different from home insurance?
Yes, a home warranty differs from home insurance in that it covers major home systems and appliances from wear-and-tear damage. Home insurance typically covers damage to your home due to natural disasters or theft.
Our Rating Methodology
We evaluated each home warranty company using a comprehensive rating methodology. Our research process included speaking with company representatives, obtaining quotes, analyzing sample contracts, and gathering insights from homeowner surveys and focus groups. We also tested the sign-up and claims process for 11 top providers and conducted secret shopping to assess the customer experience.
Based on this data, we scored each company across six key comparison categories critical to choosing a home warranty. Each provider received a total score of 100 points, which we converted into a 5-star rating.
Here’s how we weighted our factors:
- Coverage: We examined each provider’s plans to see how comprehensive coverage is, including whether the company covers unique items. We gave higher scores to companies with broader coverage and higher annual limits and deducted points for long waiting periods or depreciation clauses.
- Cost: We compared average monthly prices and service call fees. Providers with competitive pricing, no hidden fees, and rates below industry averages earned the highest scores.
- Trustworthiness: We reviewed customer ratings on platforms like the Better Business Bureau (BBB) and Trustpilot. We gave higher scores to companies with strong customer feedback, long workmanship guarantees, and no ongoing legal issues.
- Plan transparency: We assessed how clearly each company presents its contract terms, policies, and disclosures. We awarded more points to providers that make plan details easy to find and understand.
- Customer support: We tested how responsive and accessible each company’s customer service is, looking at claims filing options and response times. Companies that offer quick and helpful support earned the most points.
- Flexibility: We rated providers based on the variety of plan options, the availability of add-ons, the ability to choose a technician, and customer-friendly cancellation policies.
