When you buy a new home, one of the best investments you can make is to purchase a home warranty. A home warranty is insurance that covers the repair or replacement of many appliances and systems in your home- from the dishwasher to the air conditioner.
Home warranties differ from homeowners insurance in that they cover items not typically covered by homeowners insurance policies, such as HVAC systems and water heaters. Home warranty companies are regulated by state governments and offer a variety of services and annual fees.
In this article, we will discuss what a home warranty is, who regulates home warranty companies, what to look for when choosing a home warranty company, and some of the best companies in the United States market.
What Is A Home Warranty?
A home warranty is a service contract that covers the repair or replacement of many of the appliances and systems in your home. The most common items that are covered by home warranty contracts include air conditioners, dishwashers, refrigerators, ovens, ranges, clothes washers and dryers, garbage disposal, electrical system, heating system, plumbing system, and water heaters.
Home warranties differ from homeowners insurance in that they cover items that are not typically covered by homeowners insurance policies, such as HVAC systems and water heaters. Homeowners’ insurance covers items that are usually damaged by events beyond your control, such as fires, storms, and theft. They also differ from a manufacturer’s warranty in that they cover items that are not covered by the manufacturer’s warranty, such as normal wear and tear.
What Does A Home Warranty Company Do?
A home warranty company is a service that contracts with repair companies to provide discounts and peace of mind to their customers.
When you purchase a home warranty, you pay an annual fee. If one of your appliances or systems breaks down, you call the home warranty company, and they will send a contractor to your home to repair or replace the item. The contractor will then bill the home warranty company, and you will only be responsible for paying a service fee (usually $50-$100).
Who Regulates Home Warranty Companies?
In the United States, home warranty companies are overseen by Federal and State organizations. The Federal Government creates guidelines that all states must follow; however, individual States have more sway in how they regulate businesses within their borders-so long as these rules don’t go against any laws set out by the Federal government.
Not all warranty companies adhere to the same rules and regulations- this can differ greatly from state to state.
The following organizations are responsible for regulating home warranty companies in these states:
- Florida: Florida Office of Insurance Regulations
- Minnesota: Minnesota Department of Commerce
- New York: Department of Financial Services
- Texas: Texas Real Estate Commission
The NHSCA is a non-profit organization that Registering with the Better Business Bureau makes it easier for customers to resolve complaints they may have. The National Home Service Contract Association (NHSCA) provides a set code of conduct for home warranty companies to follow so that everyone abides by the same rules.
How To Compare Home Warranty Companies
When you are ready to purchase a home warranty, there are several factors you should compare between companies to ensure you are getting the best possible value. Among these, we can include annual plan fees and service fees, claim response times, payout caps, states available, contract length range, customizable coverages, the ability to use your own repair person, free cancellation, and others.
Different home warranty companies offer different plans and coverage options. Some home warranty companies will only cover certain appliances, while others will cover your entire home. It’s important that you read the fine print and understand exactly what is and is not covered before you purchase a policy.
Here are some things to keep in mind when you are comparing home warranty companies:
- Make sure the company is licensed in your state
- Compare the monthly/yearly fee
- Check the coverage to see what is included and what is not included
- Read reviews from other customers
- Ask about the claims process (including how long it takes for a claim to be processed)
- Find out if you can use your own repair person or if you have to use a contractor approved by the home warranty company
- See if there are any limits on how much you can claim per year
- Make sure you understand the cancelation policy before you purchase a policy
The best home warranty company for you will depend on your specific needs and budget. Be sure to do your research and compare different companies before making a decision.
A great home warranty company will offer a variety of plans and coverage options to meet your needs. They will also have reasonable fees, fast claim processing times, and no limits on the amount you can claim per year. Additionally, it is helpful if the company has good reviews from other customers and is licensed in your state.
Our Picks For Good Home Warranty Companies
After careful consideration of all the factors mentioned above, we have compiled a list of what we believe to be the best home warranty companies in the United States.
American Home Shield: American Home Shield is one of the leading home warranty companies in the country. They offer a variety of plans and coverage options so you can find the perfect fit for your home.
- $3,000-$6,000 per appliance
- Unknown pre-existing conditions
- Damage caused by rust or corrosion
- Improper installation and/or modification
- The customization of limits is reduced because AHS bundles many items into the Shield Platinum plan.
- Claims may take up to 48 hours to be responded to, which puts it at a disadvantage when compared to other similar companies.
Choice Home Warranty: Choice Home Warranty is an excellent option for anyone wanting comprehensive coverage. Their home warranty plans safeguard a wide variety of systems and appliances in your home, so you can relax knowing that your property is protected.
- Coverage begins immediately, without the need for a home inspection.
- Items that break down after repair are guaranteed coverage for 90 days.
- You won’t be able to choose your own technician.
- A few concerns about the company’s reputation should be considered by homeowners before they decide to buy a plan.
Select Home Warranty: Choose Select Home Warranty for the widespread protection of the systems and appliances in your home. With no payout limits, an easy claims procedure, and the ability to use either your own repair contractor or one from a list approved by Select Home Warranty, you’ll have greater peace of mind when something goes awry.
- Get roof leak coverage with every home warranty plan option.
- Price plans start at less than $50 per month.
- File a claim within two days rather than as soon as it is discovered.
- Has lower coverage caps than many other providers (for example, appliances are limited to $500 per item)
- May charge multiple service call fees in a visit if you’ve filed more than one claim
Cinch Home Service: Cinch Home Service is ideal for those searching for broad coverage. Their home warranty plans cover many systems and appliances in your home, so you can be confident that your house is safeguarded.
- Protection from pre-existing conditions
- 180 days of guaranteed service
- Above-average service fees
- Higher costs in some states
Liberty Home Guard: Liberty Home Guard provides some of the best home warranty coverage in the industry. They offer multiple plans and coverage options so that you can find the right fit for your home.
- Covers unique items such as pro-series appliances, pest control, window washing, and reverse osmosis systems
- Gives discounts for customers who cover multiple properties
- Features a live chat tool on its website so customers can message a real customer service representative
- Is not transparent about the service call fee during the quote process
- Has a coverage cap of $2,000 per item, which is lower than some providers
Landmark Home Warranty: If you’re looking for a stress-free way to protect your home, Landmark Home Warranty is the perfect solution. With extensive coverage of systems and appliances, as well as no payout limits or complicated claims process, they make it easy to get the repairs you need.
- Easy-to-use website
- It gives home warranty tips to those who are buying or selling a home.
- It’s not available nationwide
- This home warranty company does not offer an “Appliances Plan” that would just cover appliances.
American Residential Warranty: Also known simply as ARW Home, the American Residential Warranty is an excellent home warranty company. American Residential Warranty offers a variety of plans and coverage options to ensure you find the perfect fit for your home. They have no limits on the amount you can claim per year, and their claims process is designed to be simple and easy to understand.
- Charges a service call fee of only $55 per filed claim.
- Offers customizable coverage options for homeowners who want a fully personalized home warranty plan.
- Provides add-on coverage for extra air conditioning and heating systems.
- Caps home system coverage at $1,000 per item and $500 per appliance.
- The annual coverage limit for home systems and appliances is set at $5,000.
- There is a lack of transparency between the website and service contract when it comes to planning availability.
ServicePlus Home Warranty: As a leading home warranty company, ServicePlus Home Warranty offers various plans and coverage options to suit your needs. With no annual limits on claims and a straightforward claims process, they are dedicated to providing you with the best possible service.
- Offers a 90-day guarantee on parts.
- 24/7 claim hotline and online customer portal.
- It has more expensive plans than other companies.
- Coverage cap at $200-$500 per claim.
Why Is First Premier Home Warranty The Best Home Warranty Company?
While all of the above examples have their pros and cons, First Premier Home Warranty is our top pick for the best home warranty company. Here’s why:
- First Premier Home Warranty offers a variety of plans and coverage options to make sure you find the perfect fit for your home.
- They have no limits on the amount you can claim per year, and their claims process is designed to be simple and easy to understand.
- First Premier Home Warranty is committed to providing the best possible service to its customers.
- Transparency is also a big plus – First Premier Home Warranty is very upfront about what their plans cover and don’t cover.
- Claim response times are fast and efficient, so you won’t have to wait long to get your repairs.
First Premier Home Warranty is the best choice if you’re looking for a home warranty company that will give you peace of mind.. For more information, feel free to contact us directly or get a free quote at your earliest convenience!