5 Best Choice Home Warranty-Editors’ Research
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Your home is one of your most important assets, and when it comes to protecting it, you want the best options available. One thing you may not realize is that a homeowners insurance policy does not offer protection for many valuable items and systems in your home that can break down from normal wear and tear, including appliances such as washers and dryers, HVAC systems, plumbing, and electricity systems.
Even if you have a manufacturer’s warranty on your appliances and mechanical systems, the warranty may only be effective for a limited time without purchasing extended coverage and may not cover all parts and labor. With so many of your most valuable items unprotected, you may want to consider purchasing a home warranty to protect against costly repairs or replacements. One advantage of having all your home warranty items with one company is that there is only one plan and one company to request service from.
If you think a home warranty plan might be the right option for you, here are some of the best home warranty companies on the market.
Best choice home warranty of 2022
- American Residential Warranty: Best Overall
- AFC Home Club (America’s First Choice): Best for Flexibility
- American Home Shield: Best for Plan Selection
- Cinch: Best for service fee options
- Referral Start Guarantee: Best Regional
- 2-10 Home Buyers Guarantee-Best for Realtors or Home Sellers
- Amazon Home Guarantee: Best Reputation
How We Chose the Best Home Warranty Companies
We spent two weeks researching 20 of the top home warranty companies in the US, evaluating them in four key areas: cost, coverage, customer service, and transparency.
Home warranty plan pricing varies significantly by region and coverage type, even within the same company, but service fees are fairly consistent. Companies that offer a variety of service fee options that give you the flexibility to choose the plan that best fits your budget.
The home warranty companies with the best coverage not only offer service nationwide (or at least in most states), but they also give you multiple plans to choose from. Home warranties with the best coverage give you the option to customize your plan.
Dealing with broken systems or appliances is tricky enough, which is why we recommend home warranty companies with excellent customer service features. All of the companies on this list have 24/7 customer service hotlines or online service request portals, and all receive at least a B rating from the Better Business Bureau. The BBB determines ratings based on consumer complaints and how a company responds to them, the industry the business operates in, how long the company has been in business, how transparent the company is about its practices and whether or not the company is subject to government regulatory action, among other things.
It’s hard to search for the best home warranty when you can’t find the information you’re looking for. That’s why we like companies that post price lists, plan details, and sample contracts on their websites. For information we couldn’t find online, we called customer service – the best home warranty companies provided clear answers to our questions and did so in a friendly manner.
What is a home warranty?
To define a home warranty, you need to know what a home warranty is not. A home warranty is not homeowners insurance. It is a contract between a homeowner and a home warranty company to provide repair and replacement services on major home systems, appliances, and other major components. Covers the cost of many appliances if they break down.
How does a home warranty work?
When you purchase a home warranty and have a covered system or appliance breakdown, you can file a claim with your home warranty company to schedule repairs with an approved service provider. Typically, you’ll pay a service fee, depending on your warranty plan, and the warranty company covers the rest of the repair costs. There may be limits on the repair or replacement costs that the warranty company will cover.
home insurance vs. Home Warranty: What’s the Difference?
Homeowners insurance pays for damage to the structure and foundation of your home against a covered loss and also offers liability protection in the event someone is injured on your property. Home warranty coverage doesn’t offer any of those protections, but it does pay for repairs or replacement of appliances or home systems.
How much does a home warranty cost?
Home warranty plans typically cost between $300 and $600 annually, which you can pay in monthly installments of $25 to $50. Your specific plan may cost more or less than that, depending on your location and level of coverage. Service fees also vary, generally between $55 and $150 per visit.
At a minimum, you must pay the cost of the plan. Every time you need a repair, you pay the service fee, so the more it breaks, the more you pay the warranty company. But that service fee can be much less than what it would cost to pay for the entire repair out of pocket.
For example, the average refrigerator repair cost falls between $200 and $400, according to HomeAdvisor. The same data shows that a washing machine repair can cost anywhere from $120 to $500. A $75 service fee isn’t too bad by comparison. At the same time, a higher service fee might not be worth it, and you may not need to use the warranty at all. As with many insurance and warranty products, the peace of mind it gives you may be the real reason to get it.
Who regulates home warranty companies?
Each state has its own regulations on how it monitors home warranty companies. Some states require all service contract providers to register with the state Insurance Commissioner. Other states do not have clear regulatory authority. Many states provide consumers with the ability to file a complaint with the insurance commissioner’s office.
Do I need to get a home warranty?
It should be the judge if a home warranty is worth it. A home warranty can give you peace of mind knowing you’ll have help paying for expensive repairs or replacements. And if those repairs do become necessary, you can save money on service costs. The home warranty company can also provide assistance in locating a contractor to complete home repairs.
On the other hand, you may never need the service or it may not save you much (or anything) in the end. It may also not be necessary in all cases. If you’re buying a new home, there may already be some coverage for any home systems or structural defects. If you buy new appliances, they may also come with their own warranties.
Tip: If you bought an appliance with a credit card, check the benefits of the card. It may offer extended warranty coverage for items you purchase from it.
As an alternative to buying a home warranty, you can “self-insure” — add up what you would pay each month for the warranty and set up an automatic transfer of that amount to a high-yield savings account. If appliances break, you can use that money to cover repair or replacement costs. If they don’t, you can use the money for something else. The risk here is that you may not have enough reserve when you need it.
There’s no way to know for sure if you’ll need the extra coverage, but the offer of home peace of mind warranties may be worth it.
Difference Between Home Warranty and Home Insurance
When buying a new home, you need to know the difference between a home warranty and home insurance. That is why today we will talk about the coverage of each of these and the reasons why you should opt for both options. In this way, you can get complete protection for your house! continue reading here