Home warranties tend to be considerably broader than a warranty you would purchase for a specific item. Where a warranty on a refrigerator or a computer only covers one specific object, a home warranty can include most of your home’s components including a HVAC system, your home’s plumbing, and more.

While a home warranty can help you save money if your air conditioning goes out or your dishwasher breaks, it’s important to note that not all home warranties are created equal, and to understand some of the pitfalls within the industry. With that in mind, we compared the top 20 home warranty companies to find ones that stand by their promises and come with a generous list of inclusions. 

American Home Shield made our ranking due to the flexibility of their plans, but we can also recommend AFC Home Club and other companies that offer quality home warranty products.

The Most Important Factors When Selecting a Home Warranty

  • Plan Limitations: Many home warranties come with plan limitations that can diminish their value. For example, certain components of your home (like your HVAC system) may not have any coverage at all with lower tier plans from the top companies. Make sure you know what each plan covers and includes before you decide on a home warranty.
  • Depreciated Values: Some home warranties promise to replace items that cannot be repaired. However, they may only offer a depreciated value for the item, which leaves the homeowner and warranty customer paying the difference out of pocket.
  • Annual Limits: Watch out for annual limits on home warranties since they may drastically reduce the value of your plan in years when you have more than one claim.
  • Included Providers: Also check whether you are limited to certain repair companies with your home warranty plan. Many force you to use a list of providers to provide quotes for service, repairs, or replacements for your home warranty coverage to apply.

The home warranty industry has a few shortcomings, so we’ve also included a guide on how to avoid landing in a bad situation with a home warranty company. Keep reading to learn more about the best home warranties on the market today and how they compare. You can also enter your zip code in the sidebar to see what’s available to you in your area.

The Best Home Warranties of 2020

The best home warranties make it easy to purchase the coverage you need for a price you can afford. They also refrain from packing their policies with fine print that makes them hard to use. With those factors taken into account, here are the top home warranty companies of 2020:

Company Best For  
Best for Flexibility Learn More
Best for Established Homeowners Learn More
Best Budget Option Learn More
Best Comprehensive Plans Learn More
Best Basic Coverage Learn More

Best Home Warranty Reviews

While each company on our list offers high-quality home warranties, it’s possible the specifics of each company and their plans could make one work better for your needs. The following home warranty reviews can help you decide which home warranty plan will provide the coverage you need the most.

American Home Shield: Best for Flexibility

Why it Made the List: American Home Shield made our ranking as one of the best home warranty companies based on the sheer number of plans they offer and the fact you can tailor your plan to your needs. The company has also been in business for over 45 years, which means it is one of the most established in the industry.

Standard home warranty plans they offer include:

  • A Systems Plan that covers the main components of your home, such as your HVAC system, electrical, smoke detectors and more
  • An Appliances Plan that provides coverage for your household appliances only
  • A Combo Plan that provides broad coverage for 21 components of your home, including all the major ones

You can also opt to build your own plan, which allows you to pay for only the coverage you want and need. American Home Shield also makes it easy to get a free quote for any of their policies whether you’re already a homeowner or you’re currently a buyer or a seller.

As an added bonus, this company will repair or replace items covered in your warranty regardless of their condition and age. Neither a home inspection or maintenance records are required, either.

What Holds It Back: The major downside of this company is the relatively high service charge you’ll need to pay if you need to use your warranty coverage. Service calls range from $75 to $125 depending on the plan you select.

Get Started With American Home Shield

Read our full American Home Shield Review

AFC Home Club: Best for Established Homeowners

Why it Made the List: We chose AFC Home Club as the best option for established homeowners based on the fact you can use any licensed and insured technician for your home repairs. This can be important for homeowners who have a long history of working with certain technicians and repair companies and don’t want to be tied down to using a repair company the warranty provider selects.

AFC Home Club also offers a selection of plans that include different components of your home. You can choose from:

  • A Silver Plan that includes most major home appliances
  • A Gold Plan that includes most major appliances and components of your home
  • A Platinum Plan that includes all major systems, components, and appliances
  • A Systems Plan that includes major systems of your home such as air conditioning, water heating, plumbing, and more

We also like the fact that AFC Home Club allows you to add on specific coverage for sump pumps, hot water dispensers, pools and spas, and more. When it comes to cost, you’ll need to apply for a free quote to find out how much you’ll pay.

What Holds It Back: One factor we don’t like about AFC Home Club is the fact they don’t let you build your own plan. You can only choose from prepackaged plans they offer, although you can customize your coverage with select add-ons.

Get Started With AFC Home Club

Read our full AFC Home Club Review

First American Home Warranty: Best Budget Option

Why it Made the List: First American Home Warranty made our pick as the best budget option based on the simplicity of their plans, and the fact they start at $28 per month. With First American, you can choose from a budget plan that covers major appliances only, but you can also opt for a Premier Plan that includes all major appliances and systems in your home.

First American Home Warranty also offers flexible payment options and a network of pre-screened professionals who can perform needed repairs. You can also request service 24 hours a day and 365 days per year.

What Holds It Back: When you buy a home warranty from First American, you have to use their network of service providers for all repairs.

Get Started With First American Home Warranty

Read our full First American Home Warranty Review

Select Home Warranty: Best Comprehensive Plans

Why it Made the List: Select Home Warranty offers three different plans that can provide coverage for your home and save you from unexpected repair bills, but we believe their top tier plan is one of the most comprehensive on the market today.

With their Platinum Care plan, you can get all major components of your home as well as all your major appliances covered for one low monthly cost. This includes your air conditioner, healing, plumbing, electrical, water heater, plumbing stoppage, and all major appliances down to your ceiling fans. You can also add on additional coverage for pools, central vacuums, sump pumps, well pumps, standalone freezers, sprinkler systems and more.

Other plans you can choose from include:

  • A Bronze Care plan that includes major household appliances
  • A Gold Care plan that includes most major systems in your home like your HVAC system and your electrical and ductwork

At the end of the day, Select Home Warranty provides a range of plans you can choose from to cover the components of your home you worry most about. They also make it incredibly easy to get a free quote online.

What Holds It Back: Like a few other providers on our list, Select Home Warranty only lets you use their team of repair technicians. This means you do not have the option to decide who works on your home.

Get Started With Select Home Warranty

Choice Home Warranty: Best Basic Coverage

Why it Made the List: While several providers on this list offer solid basic home warranty coverage, we chose Choice Home Warranty as the best in this category due to the inclusions of their basic plan. When you apply for a free quote online, you’ll find that this company’s Basic Plan includes many more components than some other providers do. For example, their lowest level of coverage includes heating, electrical, plumbing, plumbing stoppage, water heaters, whirlpool bathtubs, all major appliances, ductwork, ceiling and exhaust fans, and even your garage door opener.

You can also upgrade to their Total Plan which includes all coverage offered in the basic plan plus coverage for a washer and dryer, refrigerator, and air conditioning system.

Choice Home Warranty also uses pre-screened, local technicians for repairs, and their warranty service is available 24 hours a day and 365 days per year.

What Holds It Back: The standard $85 service fee they charge can make using your warranty cost prohibitive for less expensive items that may be covered, such as ceiling fans. Also note that you don’t get to choose our own service technician when you buy a warranty from Choice Home Warranty.

Get Started With Choice Home Warranty

How We Found the Best Home Warranties

The best home warranties have the potential to save you considerable sums of money if major components of your home break down or need replacing. With that being said, some companies are more reputable than others. Here are the main factors we considered when preparing this ranking.

  • Transparency: We gave preference to home warranty companies that highlight all the major inclusions in their plans on their website. This includes willingness to include plan limitations and service fees, as well as common claim denials and other factors consumers should be aware of.
  • Plan Options: We also looked for companies that offer more than a few plans consumers can choose from. Companies that let homeowners build their own plans, like American Home Shield, were also given high marks due to the convenience of this arrangement.
  • Flexibility: We looked for companies with flexible home warranty plans, but we also compared options in terms of the add-ons available. We gave more points to companies that let you add on more coverage for discretionary household items like pools, spas, and sprinkler systems.
  • Customer Service: Finally, we considered companies that offer 24/7 customer service. We also gave more points to home warranty providers that let customers choose their own service technicians, although very few do.

What You Need to Know About Home Warranties

While the home warranty companies that made our ranking are the best of the best, you should know that, by and large, home warranty companies don’t have a great reputation. If you read home warranty company reviews or check their profiles with the Better Business Bureau (BBB), you’ll find that all major companies that offer home warranties receive poor marks across the board.

Numerous government agencies have even issued bulletins regarding home warranty scams. Here are a few ways to avoid getting in a bad situation. 

Take a Look the Complaints

“Home warranties often do not deliver everything that those selling them may promise,” writes Attorney General Karl A. Racine of the District of Columbia.

“Every year, one of the most frequent complaints consumers make is about home warranty companies. These companies often promise a lot, but deliver very little,” the bulletin reads.

Common consumer complaints about home warranties include:

  • The fact that even comprehensive home warranties exclude items like your roof and the structural integrity of your home
  • You typically need to use service technicians from the home warranty company, and you cannot choose your own
  • The cost of the warranty is often more than paying for repairs out of pocket
  • Many companies offer a depreciated amount for older items that need to be replaced, meaning you’re stuck paying the difference
  • Numerous exclusions can apply to your policy, and they’re often buried in the fine print
  • The warranty company may not guarantee work performed by their own prescreened contractors
  • You may be forced into arbitration if you have a complaint based on the contract you sign

While the above complaints are very common among home warranty customers, you can save yourself some heartache by comparing plans thoroughly and knowing exactly what is included ahead of time. Also stick with reputable companies on this list since they are the most likely to stand by their promises when it comes to paying out claims.

Read the Contract Before Making it Official

Once you’ve narrowed down some companies to consider, ask for some detailed information from each company on your list. A company should be willing to give you a copy of the contract with all its fine print so you’ll know exactly what you’re agreeing to.

If you have trouble getting details from a company, move along to someone else. A company that won’t cooperate with potential customers may be even less helpful once you’ve signed up.

Be sure you find out:

  • Whether the company has a wide network of technicians in your area capable of making repairs quickly.
  • How you can go about getting reimbursed for a repair if ever necessary.
  • Whether the company has 24-hour customer service or if help will be unavailable after hours or on holidays and weekends.
  • If specific components of any covered systems are excluded from protection.
  • If there’s a waiting period after signing the contract before you can file a claim. If so, how long? (Hopefully not more than 30 days.)
  • What are the annual or lifetime caps on your warranty’s payouts? If they’re too low, the warranty will more likely be a waste of money.
  • Will the warranty company want to do its own inspection?
  • Will the contract require you to pay for regular maintenance in order to maintain compliance?

Become an Expert on Your Home and Your Contract

Since you’re the expert on your home, you’ll know what systems or appliances need the most support. (If you’re just moving in, check that home inspector’s report.)

Before signing your contract, read it thoroughly. Become an expert on it as well. Take note of what the contract requires of you as the homeowner.

If you don’t hold up your end of the bargain, or if you’ve exceeded the plan’s spending caps, the warranty won’t help when you’re facing a huge repair bill. This is the source of some, but not all, of the frustration which customers have with home warranties.

If you already know you won’t do what the contract requires, such as annual check-ups on all the covered systems and appliances, don’t sign it. You’d be better off saving those premiums toward repairs or finding a warranty with fewer requirements. More importantly, though, when you become an expert on the contract, you can use it to your advantage.

If a customer service rep thinks the repair you need isn’t covered, you’ll know better. You’ll know what questions to ask and what answers to expect.

At that point, you’ll know you have a home warranty in place as a line of defense against out-of-control and unexpected home repair costs.

Summary: Best Home Warranty Companies

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The post The Best Home Warranties Available and What You Should Know appeared first on Good Financial Cents®.

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