A home warranty provides homeowners with service in the form of repairs or replacement of covered systems and appliances. A warranty can also give those owners peace of mind that they won’t be hit with a costly repair bill. Choosing the best home warranty company takes a little time and effort, but it’s worth it to get coverage that could save you hundreds of dollars.
This article covers:
- Three home warranty companies to compare
- Home warranty: what it is and what it’s not
- Home warranties: what’s covered and what’s not
- Points of comparison
- Commonly covered systems and appliances
Home warranty policies, available since the 1970s, initially were introduced as part of a real estate transaction. Home sellers and their real estate agents were encouraged to buy a home warranty that would protect buyers during the first year after their purchase from potentially expensive and unexpected repairs.
Builders of new homes are typically required to provide a structural warranty with their home, which is different from a standard home warranty. New home buyers often receive a structural warranty that lasts ten years as well as a warranty for one or two years on their appliances and systems. If you build a custom home or purchase a home from a builder who doesn’t provide a warranty, you can also purchase a home warranty yourself. For example, The Home Service Club is among the few providers that work with home builders to provide warranties on heating and air conditioning systems and appliances on newly built homes.
Three home warranty companies to compare
To get started, compare the services and prices of these three best home warranty companies:
The Home Service Club, (HSC) offers home warranty plans in 49 states. HSC offers innovative coverage for utility line and sprinkler line coverage, mobile-friendly and online account managing, equipment supply chain, and 24/7 ability to file online claims. The company offers a diverse choice of plans and optional coverages. Plans are available for one, two or three-year terms.
HSC has a network of local contractors who provide service to their customers. The company vets the contractors ahead of time and monitors their performance based on a number of criteria, including a customer satisfaction survey program. HSC provides professional advice about upgrading or replacing equipment and manufacturers warranties on new equipment.
Service can be requested 24 hours a day, 7 days a week. Customers can choose a plan that meets their needs, including a trade service fee of $65, $95 or $125. Central air conditioning and heating coverage is included in all of HSC’s plans and permit fees are included in their real estate plans.
In addition to standard coverage HSC offers optional roof coverage and is the only home warranty company to offer utility line coverage that will pay for repairs to water, sewer, gas and electrical lines between your home and the city-owned section. Those repairs, which are a homeowner responsibility, can be costly.
American Home Shield, (AHS), founded in 1971, provides customizable home warranty plans to more than one million customers in the U.S. AHS, part of the ServiceMaster family of companies, offers a choice of plans to cover just appliances or systems. Plans are available for one or two-year terms.
Plans are available with limits as high as $3,000 and AHS will obtain permits if necessary for code violations. Service is available 24 hours per day, 7 days a week. Most service requests are completed within 48 hours.
Customers can choose policies with varied service fees. Generally, those with lower service fees have higher premiums.
AHS has a network of more than 10,000 local contractors for service calls. AHS monitors customer reviews to maintain a high level of quality contractors.
First American Home Warranty, founded in 1984, is part of the First American family of businesses. As with other home warranty companies, prices and services vary by location.
First American Home Warranty offers plans with high limits for many repairs and pays up to $250 to obtain needed permits for repairs that require them.
The basic plan covers a long list of covered appliances and systems, but you’ll need a premier policy to have your heat system covered. In addition, customers can choose enhanced policies and some optional services, including air conditioning or a swimming pool.
Service requests can be made 24 hours per day, 7 days per week by phone and online. Service requests are usually fulfilled within 48 hours. Like any of the best home warranty companies, the number of allowed service calls in unlimited.
Home warranty: what it is and what it’s not
Before you can choose the best home warranty for your home or for potential buyers of your home, you need to understand what a home warranty does.
Many buyers, particularly those new to the real estate market, assume a home warranty includes a home inspection or is provided by a home inspector. A home inspection is a completely different process and simply provides a report on the condition of a home. A warranty provides repairs and replacements up to your coverage limits.
Home warranties are also sometimes confused with homeowner’s insurance. Homeowner’s insurance provides financial protection for specific covered events that could damage your home, its systems and your possessions. For example, homeowner’s insurance covers repair and replacement costs from a fire, a theft or wind damage from a storm. However, you can’t make a claim on your homeowner’s insurance when an appliance breaks down due to normal wear and tear.
Home warranties: what’s covered and what’s not
Whether you’re buying a home warranty for yourself or you are requesting one from a seller or a real estate agent, it’s important to understand how they work. Each policy is different and will cover different items.
Most home warranty companies offer a choice of plans at different prices that provide different levels of coverage. To find the best home warranty, you’ll need to evaluate what you need to cover and your budget. You may not need the most expensive home warranty if it covers items that you don’t have in your home. You may also be able to purchase a warranty and then add on specific items that require extra coverage.
Be aware that many home warranty companies have different types of plans, some available for existing home owners and some specifically for real estate purchase/sale transactions. If you are buying a home, be sure to choose plans designed for real estate purchases, as added bonuses may be significant. Following are some of the conditions that real estate purchase warranty plans cover that may not be covered under plans offered to home owners:
Points of comparison
To choose the best home warranty plan, you should know what you need to cover in your home, determine the level of coverage you need and your budget.
To get started comparing companies, take these steps:
- Read each plan. Make sure you know which appliances and systems are covered in various plans.
- Check for optional coverage. If you have a whirlpool tub or two water heaters, check to see if you can pay to have them covered.
- Verify how service providers are selected. Reputable home warranty companies provide screened service providers, to ensure they are licensed, bonded and insured. Compare how the providers are evaluated.
- Compare coverage limits. Repair and replacement costs are typically capped at $500 to $2,500, so make sure you know how much coverage you are buying. Additional coverage may be an option.
- Compare costs. You’ll pay an annual or monthly fee for your home warranty which varies according to where you live. In addition, there istypically a fee for each service call, so compare that cost, too.
- Check out customer service availability. Each home warranty company typically posts their hours and availability online. Ideally, you should have the ability to file a claim 24 hours a day, 7 days a week, at least online if not by phone. Find out how quickly you’ll get a response from a service provider, the turn-around time for service and if the warranty company guarantees the quality of the work.
- Check out awards, reviews and complaints online. If you live in one of the 32 states that requires a home warranty company to have a license, check on that license status online, too.
Commonly covered systems and appliances
While you need to check each home warranty plan for its specific coverage, the best home warranty plans offer coverage similar to this list of what’s covered by the basic plan offered by The Home Service Club:
- Central Air Conditioning
- Heating Systems
- Plumbing Systems (Faucets, Toilets, Showers)
- Electrical Systems
- Water Heater
- Ceiling Fans
- Garage Door Opener
- Garbage Disposals
- Central Vacuums
- Ovens Ranges Cooktops
- Clothes Washers
- Clothes Dryers
- Freestanding Icemakers
- Microwave Oven Built-In
- Trash Compactors
- Food Centers Built-in