A home warranty plan can be the perfect complement to your homeowners insurance policy. It can be a lifesaver when faced with stressful and expensive home repairs — or it can add to your frustrations by excluding the appliance or system that needs repairing. If you want to get the most value for your money, here are the best home warranty companies of 2021, according to Money.
Money’s Reviews of the Best Home Warranty Companies
- American Home Shield: Most Customizable Plan
- First American Home Warranty: Most Comprehensive Basic Plan
- Liberty Home Guard: Most Add-Ons
- AFC Home Club: Lowest Premiums
Best Home Warranty Company Reviews
American Home Shield – Most Customizable Plan
- Largest home warranty service provider in the country
- Highly personalizable plans
- Lenient liability limitations
- Repairs are only guaranteed for 30 days
- Plans are unavailable in Alaska
- Roof leak coverage unavailable
With American Home Shield, clients can customize their home warranty plan and choose any 10 items from their systems and appliances options without collecting additional expenses.
AHS is also more lenient than most when it comes to liability limitations. According to its sample contract, coverage includes repairs due to insufficient maintenance, rust, corrosion, sediment, improper installations, and undetected pre-existing conditions.
Monthly payments vary depending on the state, but clients can customize repair service fees, choosing from $75, $100, or $125 per service call. The lower the service fee, the more you’ll have to pay for your contract each month.
With AHS, heating systems and air conditioner units with a capacity of up to five tons have a payout limit of $1,500, while appliances have a $3,000 limit per covered item.
First American Home Warranty – Most Comprehensive Basic Plan
- Covers improperly installed or maintained systems and appliances
- Affordable basic plan options with competitive coverage
- Unlimited service calls
- Only two plans available, no systems-only plan
- Limited list of add-on coverage
- Only available in 35 states
With First American Home Warranty’s Basic Plan, you get comprehensive coverage for 10 costly-to-repair appliances for only $28 a month.
Bear in mind that this plan offers coverage for appliances only including washers, dryers, refrigerators, garbage disposals, and trash compactors. Clients who need coverage for both appliances and systems will have to opt for the company’s Premiere Plan.
Alternatively, customers have the option to add a “First Class Upgrade” to their basic plan for $9 per month, which includes coverage for specific systems such as HVAC, dishwashers, plumbing, and covers malfunctions due to improper installations, modifications, and previous repairs.
Service fee is standard for all plans: $75 for each contractor visit and appliances have a limit of up to $3,500 for diagnosis, repairs, and replacements. All plans also cover damages caused by lack of maintenance, rust, corrosion, and chemical or sedimentary build-up, which is vital if you’re buying an older home.
Liberty Home Guard – Most Add-Ons
- Over 20 items of additional coverage options
- 60-day workmanship guarantee on repairs
- Overwhelmingly positive BBB reviews
- Does not service California, Illinois, Washington, Wisconsin, and Wyoming
- Only two years of industry experience
- Relatively low payout limits
Liberty Home Guard stands out for its list of optional add-ons. Customers can choose from around 20 items to add to their coverage — the most extensive list of add-ons in the home warranty market.
The list includes items commonly found in other providers — pools, spas, well pumps, sump pumps, central vacuums — and other, more rarely covered items such as limited roof leaks, replacing locks, gutter cleaning, pest control, and electronics protection.
Liberty Home Guard offers three types of plans: one for appliances, one for systems, and one that covers both. Liberty covers popular systems and appliances such as air conditioning, heating, plumbing, electrical, washers, dryers, and refrigerators.
Their service fee ranges from $65 to $125, with a payout limit of $1,600 per covered item.
AFC Home Club – Lowest Premiums
- A variety of additional benefits, from discounts to credit monitoring
- Some of the lowest premiums in the market
- Clients can choose their own technicians
- Platinum Plan covers microwave ovens, ice makers, and plumbing stoppages
- One-day period for reporting issues with a system or appliance
- Not available in California, Hawaii, Nevada, and South Carolina
- $75 plan cancellation fee
AFC Home Club (America’s 1st Choice) caught our attention for its considerably low premiums. AFC’s plans include a systems plan, an appliances plan, and two hybrid plans covering both systems and appliances.
As with other providers, AFC pricing changes depending on the chosen service fee ($75, $100, $125). Nonetheless, the company’s prices are still low compared to other companies.
For example, for AFC Home Club’s System or Silver Plan, customers would pay less than $40 a month and $50 or less for their Gold and Platinum plan. Customers can also choose between a one-year contract or a three-year contract term, saving even more per month if they choose the three-year option.
Other Popular Home Warranty Companies
The following companies didn’t make our top home warranty companies list. However, they are well known in the market and are worth considering.
This industry leader features affordable plans and reliable customer service. Choice Home Warranty didn’t make our list because it lacks flexibility in its coverage options.
CHW is unavailable in California and Washington.
With free roof leak coverage, discounts on their already affordable premiums, and a 90-day repair guarantee, Select Home Warranty is a strong competitor. However, its fees can get out of hand, and it has low coverage caps for many home services.
SHW service is unavailable in New York, Nevada, Washington, and Wisconsin.
Amazon Home Warranty — unrelated to Amazon the online marketplace — has reasonable rates and a variety of additional coverage options. Additional options are expensive, though, and its plans cover fewer items than other competitors. Moreover, the company’s BBB accreditation is currently revoked.
AHW does not service the states of California, Hawaii, Iowa, New Mexico, Oklahoma, and Washington.
What Is a Home Warranty?
A home warranty is a service contract. Customers pay the warranty premiums in exchange for getting help when they need to repair their home’s major appliances.
A home warranty could save you money if your appliances and systems are reaching their life expectancy. What’s more, real estate agents often recommend buying a home warranty if you’re selling your home for two reasons:
- it can cover a system or appliance in case it breaks during or after the listing process, and
- it adds value and attracts homebuyers who worry about unknown home repair costs if they buy your house.
What Does a Home Warranty Cover?
Companies use a wide range of names for their different plans — Gold, Platinum, Bronze, Basic, Premier, etc. — but most plans fall into three basic categories: a systems plan, an appliances plan, and a hybrid or combo plan, which covers both.
Generally, home warranty companies offer coverage for the same array of home systems and appliances.
Most Common Home Systems Covered:
- Heating and air conditioning (HVAC system)
- Plumbing systems
- Electrical systems
- Water heaters
- Central vacuums
Most Common Home Appliances Covered:
- Laundry machines (clothes washer, dryers)
- Ranges, stoves, ovens & cooktops
- Built-in microwave ovens
- Garbage disposals
- Garage door opener
Some companies offer optional coverage options you can include for an extra fee. Some common add-ons include:
- Pools and inground spas
- Septic systems
- Well pumps
- Sump pumps
- Ceiling fans
- Smoke detectors
Home Warranty Quick Facts
As you browse home warranty companies and plans, keep the following things in mind before signing on that dotted line.
Differences in State Licensing
Each state has its regulations for overseeing the home warranty industry. Research and review home warranty regulations to ensure a company is licensed and legally allowed to do business in your state.
In many states, the insurance commissioner or Department of Consumer Protection oversees home warranty companies. To locate the regulator of your particular state, consult this State Licensing Guide.
30-Day Waiting Period
Most home warranty companies require a 30-day waiting period before homeowners can file a claim. If any system or appliance malfunctions during this waiting period, you won’t be able to request service, and repairs or replacement costs won’t be covered.
In other words, your contract won’t be effective until 31 days after you make the first payment. If something in your home were to malfunction during your waiting period, the warranty would cover only part of the repair.
Limitations of Liability
Usually, appliances with existing manufacturer warranties, malfunction resulting from rust, corrosion, toxic materials, improper installation, or pre-existing conditions (known or unknown) are not covered by a home warranty.
Companies are also not liable for repairs of cosmetic defects, maintenance routine, or malfunctions caused by acts of nature (fire, flood, earthquake, storms, etc.). That’s why you have homeowners insurance.
Some home warranty companies require a home inspection that reveals your systems and appliances’ condition before the contract begins.
Home warranties are a controversial product because they cover a specific list of appliances and systems. Although home warranty companies advertise peace of mind by helping homeowners save money on home repairs, many customers consider their experience with selected home warranty companies a headache.
Complaints usually relate to denied claims, repairs taking days or weeks to schedule or incorrectly performed, and consumers who wait over an hour on hold when trying to reach a customer service representative.
Are Home Warranties Worth It?
Home warranty plans can be worth the investment. You’re more likely to be happy with your home warranty plan if you:
- research before buying
- read sample contracts to understand your coverage fully
- get your questions answered before finalizing a contract
- find and interact with a reputable company.
So, how do you measure the value of a home warranty? If you end up paying less for the warranty than what you’d pay for in-home repairs without it, you know you’ve gotten a good deal.
- Best case scenario: You pay a service fee that only ranges from $75 to $150 (along with your annual premiums) and get a major system or appliance fixed or replaced.
- Worst case scenario: You pay the warranty’s premiums for several years, pay a service fee for a home service call, and then learn your warranty’s limitations prevent the plan from helping when you need it.
Customer experience with home warranty companies usually reflects one of these two extremes. Consider that happy home warranty customers have higher payout caps and fewer liability limitations.
Important Things To Know About Home Warranties
The Proper Maintenance Gray Area
Sometimes home warranty coverage is contingent on the “proper maintenance” of systems and appliances, meaning repairs won’t be covered if the malfunction was caused by a failure to follow the manufacturer’s maintenance specifications. However, there are no clear guidelines as to what constitutes proper routine maintenance.
Some contracts give concrete examples such as changing filters, flushing the water heater, keeping proper refrigerant levels, or cleaning coils, but it ultimately depends on technicians’ inspections.
Brand-new systems and appliances
If you’ve just installed new appliances or bought a brand new home, your appliances will probably already be protected by a manufacturer’s warranty. Since a home warranty won’t cover anything that’s already covered under another type of warranty, you might want to consult with a professional as to whether you need one.
Most homeowners would rather the manufacturer — Whirlpool, Samsung, GE, etc. — repair their own products anyway if the appliances remain under a manufacturer’s warranty.
How to Choose The Best Home Warranty For You
Get Quotes and Compare
Make sure to get at least three different quotes and compare them. Ask company representatives questions such as:
- What is the cost?
- Which systems and appliances are covered?
- How much is their service call fee?
- Is there an item that’s included in one plan but not in another?
- What are their coverage add-ons and how much are they?
- Can plans be customized?
Read Sample Contracts
Once you’ve chosen at least three companies, the next step is to go over their sample contracts.
Identify the limitations and exclusions in the contract, specifically the types of repairs it will or will not cover. It’s also useful to know what would happen if an item were deemed irreparable and how their claim submission process works.
Another essential thing to check is payout limits. Your contract should disclose the exact amount of money a home warranty provider will disburse for the repair of each type of system and appliance per each contract term. The established cap will be the amount you’ll have available throughout the contract.
Best Home Warranty FAQ
How much does a home warranty cost?
A home warranty costs between $300 and $600 a year. This does not include the service fee, which is established in your contract. Companies charge a $75 to $125 fee for every repair call.
How soon can you use a home warranty after purchase?
Most home warranty companies have a 30-day waiting period after the date of purchase. However, if you bought your home warranty as part of a real estate transaction, your coverage starts on the day of closing.
When should you use a home warranty?
You should file a claim with your home warranty company as soon as your appliances or systems show signs of a potential issue. Some companies have shorter periods for filing an eligible claim, which means that, generally, the sooner you file a claim, the better.
Will the home warranty cover old systems and appliances?
A home warranty plan may indeed cover “pre-existing conditions,” meaning when a system and appliances are failing or have failed before home warranty coverage begins. However, they will usually only do so if the system or appliance passed both a visual and mechanical inspection.
What voids a home warranty?
Performing unauthorized repairs, be it by using an unapproved contractor — licensed or not — or attempting to do the repairs yourself, can void your home warranty. Several types of home improvement projects, failing to keep your home up to building codes, and misplacing ownership documentation, could also void your home warranty coverage.
Does a home warranty require an inspection?
Most home warranty companies will not require an inspection when you purchase one of their comprehensive plans. We recommend that consumers consider making an inspection anyway to have a documented representation of the condition of their systems and appliances before buying a warranty.
Is home warranty tax deductible?
Paying for a home warranty generally does not make you eligible for any sort of tax exemption. However, if you pay for a home warranty plan on an income-producing building — such as a home office or rental property — your premium will be considered a deductible expense.
What is the difference between a home warranty and home insurance?
Unlike home insurance, which lenders usually require before issuing your mortgage, home warranties are an optional product. A home insurance policy will cover damage to your house or personal property from fires, theft, flooding, and other disasters or “perils.” In contrast, home warranty offers a way to protect your budget from unexpected expenses after your HVAC, garbage disposals, washing machines, or electrical system breaks down from normal wear.
How Money Found the Best Overall Home Warranty Plans
Most home warranty companies cover the same variety of systems and appliances. Because of this, our methodology focused on four key factors: transparency of service, claims processing, cost, and quality of customer service.
More specifically, we considered criteria such as contract terms, the types of covered malfunctions or failures, payout limits, cost-efficiency, and service fees.
Transparency of Service
We find that the best home warranty companies are transparent when disclosing their terms, prices, exclusions, and coverage limits.
We chose to feature home warranty providers that offer a clear explanation of their claims process and customers’ responsibilities. We also favored companies with clauses in their contracts that allowed for quicker claims in case of an emergency and for customers to choose their own technician.
We looked at the cost and service fee compared to the number of items covered, exclusions, and payout limits to determine the value of coverage plans.
We looked for companies that offered 24/7 customer support and provided alternative channels for communications, such as live chat or an app. We also checked every company’s standing with the Better Business Bureau (BBB), including their accreditation or lack thereof, rating, and reviews.
Summary of The Best Home Warranty Companies
- American Home Shield: Most Customizable Plan
- First American Home Warranty: Most Comprehensive Basic Plan
- Liberty Home Guard: Most Add-Ons
- AFC Home Club: Lowest Premiums
Fine tune your financial life this year with Money’s expert advice on investing, retirement, building credit, and more. It even comes with a handy checklist. Best of all? It costs you nothing.