The best home warranty
Owning a home is the ultimate American Dream, but once you've secured those keys, there's still work to do. Home insurance is a given as homeowners are keen to protect their new abode from the inevitable risks of fire, flood damage, and theft. A home warranty, however, isn't as obvious a purchase.
A home buyer or seller can purchase this type of warranty for peace of mind. If you're selling your home, you may include a home warranty to assuage worried buyers and encourage a sale. Buyers, on the other hand, may opt for a home warranty to avoid unexpected financial headaches within the first year of a move.
Our top pick is a home warranty from American Home Shield, which makes the process a breeze to complete. To learn more about the types of home warranties available, keep reading our guide.
Considerations when choosing home warranties
What does a home warranty cover?
A home warranty provides coverage for surprise home appliance malfunctions. If a covered item breaks down, a home warranty company is responsible for the repairs. Be sure to check a company's list of exclusions -- your appliances may not all be covered. Specialty items (e.g., a swimming pool) may require an add-on policy. Here are a few items that may not be covered by a basic policy:
Lawn gear and accessories
Big kitchen appliances
Items that have already broken down and been repaired
Benefits and drawbacks of a home warranty
Are you wondering whether the cost of a home warranty policy is a worthwhile investment? Here are a few advantages that go along with this type of warranty:
Stress reduction. A home warranty service does the work of finding an appropriate and capable repair person when something breaks down in your home.
Convenience. When an appliance malfunctions, you won't need to search high and low for someone to fix it. File a claim and let your home warranty provider do the rest.
No know-how required. Home warranty services are ideal for those who lack handiwork skills.
Savings. If an appliance breaks and it's covered under your warranty policy, you'll likely only need to pay a deductible instead of repairing or replacing the item on your own dime.
A home warranty service isn't a perfect solution, however. Here are a few drawbacks to keep in mind:
Deductible. In many cases, you'll be charged a deductible each time you file a claim. When choosing a home warranty service, be sure to ask about extra fees to avoid surprises.
Cost. This type of warranty is expensive up-front. It's crucial to weigh the risks versus the benefits. If your appliances never malfunction during the coverage period, will you still feel like you made a worthy investment? Is your peace of mind worth the cost of a policy?
Lack of control. The home warranty company chooses who they'll send over to repair whatever broken item needs fixing.
Claim limits. Are you worried about having to replace or repair big-ticket items in your home? Consider that many home warranty policies have claim limits that top out around $1000.
Slow service. Not all home warranty companies offer speedy service. Read reviews to find out about whether customers have experienced delays when filing a claim or when waiting for a repair.
Repair over replacement. Repairs are more likely than outright product replacements since it's often cheaper for the home warranty company to replace an item than to fix it.
Length of policy. Typical home warranty policies last a year, but you should verify the specific dates before signing on the dotted line.
Deductible. Almost all home warranties will charge you a deductible with each claim. Be sure to find out what to expect with a particular policy before you sign.
Add-ons. You will likely have to pay more for policy add-ons that offer additional coverage for items like spas or swimming pools.
You'll pay at least $300 for a home warranty. Pricier policies top out at $1,000. Typically, the more expensive the policy, the more it will cover. Pricing also increases with the addition of policy add-ons. When shopping for a home warranty, ask about the cost of the deductible, which may range from $50 to over $100.
Q. What's the difference between home insurance and a home warranty?
A. Homeowners are required to purchase home insurance, but not a home warranty. Home insurance typically covers damage that occurs as a result of accidents or natural disasters (e.g., fire). A home warranty provides coverage for items in your home that may breakdown and need repair. Instead of having to search for a qualified repair person on your own, the home warranty service assumes the responsibility.
Q. Can coverage ever be refused?
A. Unfortunately, yes. Read the fine print in your contract to find out about a home warranty company's exclusions and refusal policy. A home warranty company may refuse a claim for poorly installed appliances, previously damaged or malfunctioning equipment, or appliances that have not been appropriately maintained.
Home warranties we recommend
Best of the best: American Home Shield Home Warranty
Our take: Choose from a trio of home warranty plans or customize your own from this well-liked company.
What we like: Easy claims process and a convenient cancellation policy.
What we dislike: You will be charged a fee for each in-home service visit.
Best bang for your buck: Liberty Home Guard Home Warranty
Our take: Affordably priced policies that offer excellent coverage.
What we like: Opt for a monthly or annual contract. Convenient, agreeable 24/7 customer service dispatches local, vetted technicians.
What we dislike: Does not offer coverage throughout the U.S.
Choice 3: Choice Home Warranty
Our take: Extensive home warranty coverage for a good price.
What we like: New clients get the first month free. Easy to get a quote or file a claim anytime. Available in 46 states. Home repairs done by local pre-screened technicians.
What we dislike: Doesn't cover damage that is unknown or preexisting.
Steph Coelho is a writer for BestReviews. BestReviews is a product review company with a singular mission: to help simplify your purchasing decisions and save you time and money. BestReviews never accepts free products from manufacturers and purchases every product it reviews with its own funds.
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