August 04, 2023
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When you buy a home, there are several expenses you may expect – like a down payment, closing costs and moving fees. Since you know these costs are coming, it’s easier to plan and save for them.
But once you move in, you quickly learn about all the unexpected costs that come with homeownership. For instance, if a major appliance or system in your home fails, it can be costly to fix. That’s why many homeowners invest in a home warranty – to provide a safety net against expensive repairs.
But how much financial protection does a home warranty actually provide? And which provider should you go with? In this article, we’ll explain how a warranty works and review some of the top companies to consider.
Just as there are different insurance plans, there are also different home warranty plans, in which costs and coverage may vary. The best home warranty for you will depend on your personal needs as a homeowner. Likewise, what your home warranty will cover will depend on the type of plan you choose.
There are typically three types of home warranties: one that covers a specific appliance, one that covers a variety of appliances and one that covers several appliances and critical systems in your home. Keep in mind, not all appliances or systems will be covered under a home warranty.
Finding the best home warranty company to fit your personal needs can be a bit of a challenge. That’s why we did some research and came up with this list of some of the best warranty companies available.
Here’s our list of the best home warranty companies (for methodology for rankings, see end of article):
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Now that we understand the value of a home warranty at a high level, let's get into some more details about our top companies to help you find the option that will best meet your needs.
Started in 2019, this relatively new company has already taken the industry by storm, from earning an A–rating from the Better Business Bureau to receiving top rankings from reviews sites across the country. With a high-quality customer experience that includes a simple sign–up process, fair prices and quick response, it’s no wonder the company has received such accolades. Liberty Home Guard provides an intuitive customer portal to streamline everything from submitting a claim to making payments. There’s also no commitment required of customers. You can cancel your plan anytime. If you cancel within 30 days, you’ll get a full refund. If you cancel later, you can still receive a prorated refund.
Choice Home Warranty offers competitive pricing, regular promotions and a 90-day repair guarantee. With a Choice Home Warranty plan, you can cater your warranty to your specific needs and the budget you’re working within.
You can select from three different plans that cover 11 systems and 10 appliances from American Home Shield. We like this company because they give customers the option to customize their own plans. Flexibility may be what you need when selecting a home warranty company. In addition to their coverage options, American Home Shield also offers the insight of skilled technicians. They’ll advise you on the best option for your repairs, whether it’s repair or replacement. Their plans combined with excellent customer service make American Home Shield one of our top picks for your warranty needs.
From a homeowner’s perspective, Select Home Warranty most effectively alleviates the hardest aspect of home repairs: They find and send professional technicians to assist with repairs. By exceeding expectations with this area of their service, Select Home Warranty sets their company apart. Once the professional arrives, you’re only charged a minimal service fee for the repair or replacement of your system or appliance. It’s as easy as picking up the phone and initiating the claim.
Much like our other top home warranty companies, First American Home Warranty offers similar amenities. Several custom plan options and licensed technicians are some of the commonalities you’ll encounter. However, you’re also promised repairs 24 hours a day and 7 days a week with First American Home Warranty.
America’s 1st Choice Home Club matches its competitors and takes their service offerings to the next level. With the option of three separate plans and an additional coverage option, they have homeowners covered in a variety of ways. However, there’s a benefit that sets them apart from the pack: This company provides licensed real estate agents who offer their home buyers the opportunity to tap into their policies.
Cinch Home Services plans include coverage protections for rust and corrosion and unknown, preexisting conditions. Along with that, the company has an industry-leading, 180-day workmanship guarantee. Customers who need a repair don’t even need to pick up the phone. Instead, they can use Cinch’s digital platform to schedule service in a matter of minutes – from anywhere, at any time of the day. Those who have a plan with Cinch will also get a $25 credit for air conditioning or water filters, discounts on new appliances and a free water sensor to detect leaks in the home.
The advanced technology at Priority Home Warranty helps make the claims process simpler and more reliable for many clients. Clients can either call or go through a claim form process that involves just two steps. Within 30 seconds, the claim will be delivered from their online account and once submitted, the client can monitor their claim in real time with Priority’s live tracker. Not only will they be able to track their claim from start to finish, but they also have the peace of mind knowing that their service has a 90-day workmanship guarantee. That means if the issue isn’t resolved, they’ll send the service provider back to fix it.
When considering a home warranty, it’s important to review the features of your home and determine if adding a warranty would add value. For example, if your HVAC system is nearing the end of its life, a home warranty plan may come in handy and save you from extra costs.
Your home is one of the largest purchases you’ll make, so any extra precautions you can take to save your investment are beneficial. When deciding if a home warranty plan is right for you, here are some basic questions to ask before purchasing a plan:
There are some circumstances where you may not need a home warranty.
When it comes to major repairs, there’s never a good time financially. That’s why having the best home warranty can be a real lifesaver.
“I recommend them with just about every home I sell,” says Sharilyn Weber, a REALTOR® with Lion Real Estate in Fresno, California.
There are three basic kinds of home warranty plans, each escalating in cost and coverage.
Even the most expensive home warranty plans might not cover all your home appliances or systems. A second refrigerator in the garage or equipment for an outdoor pool might not have coverage under the warranty contract. If you want items outside of the original policy covered, you’ll have to negotiate with the insurance company.
“They’re very specific in what they do and don’t cover,” says Weber.
Negotiating could pay off. Weber includes her pool’s cellular-powered chlorination system in her own $670 home warranty.
“We’ve lived in our home for 6 years and our power cell has gone out three times – that would have cost $1,000 each time to replace. So, in our case, the warranty has more than paid for itself,” she says.