What is a home warranty?
When home appliances fail unexpectedly, home warranties help cover the cost of repair. We’ve done the research to help find the best home warranty for you.
Home warranties aren’t technically warranties, which are provided by a manufacturer. Instead, these products are service contracts for your home’s systems and appliances.
When a covered item breaks in your home, the warranty company sends a technician to repair the item and covers most of the cost. The homeowner pays a service fee to the technician, and if the repair is covered by the policy, the company will cover the cost of repair. If the item can’t be repaired, most companies assist with replacement.
Most companies have 24/7 service lines, so homeowners can report failures right when they happen. Companies with good service schedule technicians quickly and review the technician’s performance.
The type of plan most popular with homeowners is a combo plan, which combines coverage for systems and appliances in the home. A standard combo plan covers kitchen appliances, electrical, plumbing, washer, dryer, and heating and air conditioning systems.
Different companies cover different items, so it’s important to read the plan details carefully. Homeowners who want less comprehensive coverage can choose a systems-only or appliance-only plan. Items commonly covered under a warranty include:
Washer & dryer
Oven, stove, cooktop
Extra coverage is available for things like a pool and spa, sump pump, extra refrigerator, central vacuum, septic pump, standalone freezer, and tankless water heater. Adding these items requires an additional fee.
On any given item, a warranty has a limit, or cap, for coverage. The limit is listed in the policy’s terms and conditions, and it dictates the maximum the company will pay out for claims on that item. The limit on air conditioning, for instance, is commonly set at $2,000 per policy term.
Home warranty coverage has a specific purpose: to help with mechanical failures from wear and tear. They aren’t meant to cover every possible failure, and each company has different limitations. Here are a few typical limits of coverage:
- Items under manufacturer’s warranty
- Maintenance, like changing AC filter and annual HVAC tune-ups
- Breakdown from rust, corrosion, or lack of maintenance
- Damage from weather, fire, or accidents
- Items that are exterior to the home, such as exterior wiring and plumbing.*
* Exterior items listed in the plan are covered (Ex: roof leakage, pool & spa, septic pump, etc).
With or without a home warranty, technicians charge a minimum fee to come to a customer’s home for repairs. This is called a service fee, sometimes referred to as a deductible.
With a warranty, the fee is set by the warranty policy, so homeowners pay the same service fee no matter how expensive the technician’s fee is. This allows homeowners to budget for repairs. Depending on the warranty company, this fee is paid either to the company or directly to the technician.
Service fees range from $45-$125, with most options averaging between $75 and $100. Plans with a higher service fee are generally cheaper than plans with a lower service fee. Plans with a higher service fee are cheaper, but customers with older homes may want to go with a lower service fee in case they need frequent repairs.
When technicians make a repair, they often guarantee that repair for a stated period of time. That period of time is known as the workmanship guarantee, and if the repair fails during the guarantee, the technician will come out and complete the repair again free of charge.
Not every technician’s work guarantee is the same length, so home warranty plans help their customers by offering a standard work guarantee. If the repair fails during the guarantee, customers do not have to pay for repairs or pay the service fee.
Home warranties offer workmanship guarantee lengths between 30 days and the life of the plan, which can be over a year. A longer guarantee could be an indicator that the company uses better technicians who do quality work.
What to look for in a warranty:
Pricing and contract info should be transparent and available online.
Some companies raise your rates each year. Ask before you sign up.
Check for Better Business Bureau® accreditation.
Caps on appliances are important, but so is customer service.
Read the coverage to find out what’s covered.
Our Top Picks
Since 2009, AFC has been protecting homeowners from unexpected costs, making them one of the more established companies on our list. They accomplish this by giving homeowners plenty of flexibility in both pricing and coverage.
AFC offers four different plans: Silver, Systems, Gold, and Platinum. The silver plan covers appliances, the Systems covers, well, systems, and the Gold and Platinum are combination plans. Plan lengths of one and three years are available.
Beside the plan coverage, AFC offers a broad range of add-ons like pool & spa, sump pump, extra fridge, central vac, or septic tank. Plan prices without add-ons range between $300 and $600 with discounts available on three-year plans and multiple properties..
Homeowners can choose their service fee: $75, $100, or $125. The service fee affects the premium, so homeowners have plenty of pricing options for coverage.
AFC offers the longest workmanship guarantee in the industry. They guarantee repairs for the life of the plan, which can be up to three years. They also offer in-house service, which is extremely rare in an industry staffed mainly by outsourced call centers.
AFC are one of the most transparent companies in the industry. Their terms and pricing are available online, and customers have access to their own personal account manager, making it easy to get questions answered and issues resolved.
Some smaller things, such as ceiling fans aren’t covered by AFC’s plans, though those repairs are generally inexpensive. Their service fee is $15 higher than the median price on our list, but that could be a sign that they employ higher quality technicians. Customers in California, South Carolina, and Hawaii are currently ineligible for coverage.
You may know of this company from their TV commercials, in which former heavyweight boxer George Foreman beats up a shady repairman. Choice is one of the bigger names in the industry, and they have covered over 900,000 homes.
Choice provides two plans: the Basic and the Total. Both are combination plans covering systems and appliances. The Basic plan does not include AC, washer, dryer, or refrigerator, so many customers gravitate towards the Total Plan.
Choice offers a large collection of add-ons, including septic tank pumping, which is rare for the industry; however, septic tank coverage and pumping coverage are separate, meaning customers pay for two add-ons to get this coverage. Current pricing without add-ons ranges from $41 to $50 monthly and from $470 to $570.
For certain payment options, Choice adds a free month of coverage, and service fees are as low as $60. Customers benefit from low rates, a network of over 15,000 technicians, and 24 hour claims submission via phone or web.
One downside to Choice’s terms: low caps on some items, like a $1,500 per term cap on the heating system. However, some of this is offset by the low cost of their plans. Coverage is not available in California or Washington.
Select’s coverage comes in the form of three different plans. The Bronze plan covers eight appliances, the Gold plan covers six systems, and the Platinum plan, a combo plan, is their most comprehensive. The itemized coverage is on par with the other companies on this list, and the Platinum plan includes ceiling fans, which many companies do not cover.
Besides the regular selection of add-ons, Select offers coverage for the lawn-sprinkler system.
Plans start at $379 annually and include two free months of coverage. The service fee starts at $60.
Select gives prospective customers some enticing incentives to buy. Aside from low prices and two free months for signing up, they also offer a free roof leakage add-on; however, customers have to manually select it from the add-ons at checkout to receive the coverage, and it is easy to miss.
There is no maximum to the number of claims customers can make, and customers submit claims online or over the 24/7 service line.
Select isn’t in all 50 states. They don’t operate in California, Nevada, or New York. Their contract also has a few drawbacks. In particular, their terms state that without maintenance records, the company will not pay more than $150 towards any issue. While other companies also require maintenance on certain items, homeowners thinking about Select might want to go over that issue with a sales rep.
An industry newcomer, Liberty Home Guard has been providing home warranties to American households since 2017. L.H.G. offers three plans to choose from: Appliance Guard, Systems Guard, and Total Guard. Total Guard is a combination plan.
Month-to-month, annual, and multi-year plans are available. Regular monthly rates range from $39.99 to $59.99, and annual rates cost between $399.99 and $599.99. Plans carry a $60 service fee.
Customers have add-on options like pool/spa, sump pump, rekey, and gutter cleaning. Claims can be submitted online or through a 24-hour phone line.
One of Liberty’s best features is their transparency. Pricing and terms are readily available online, and their homepage contains a wealth of information about their plans. A sales representative answered some of our questions through chat, and he was friendly and thorough.
Homeowners can choose their own technicians for repairs. Technicians must be licensed and insured, and the company must approve the technician and verify the tech’s credentials before repairs begin. Repairs carry a 60-day workmanship guarantee, which is better than some others on our list.
L.H.G. only provides coverage in 32 states and D.C.—they have which states listed on their homepage—, so many homeowners will not be eligible for their service.
Their plans are almost more expensive than some companies on our list, particularly when it comes to add-ons: it costs almost $200 a year for pool & spa and over $100 a year for sump pump. However, L.H.G. often has sales advertised on their website that offer significant discounts.