What's a Home Warranty?
You're used to the idea of your car, your computer, or your smartphone coming with a warranty, but you might not be so familiar with a home warranty. A home warranty protects you when you need to repair or replace your home appliances. It generally covers the cost of labor, replacement parts, and if necessary, an entirely new item.
A home warranty policy can cover a whole range of items in your home. Typically, it will include:
Air conditioning and heating systems
Washing machine and dryer
You can usually choose to add extra coverage for items like swimming pools or kitchen appliances such as your refrigerator and freezer, oven and range, and garbage disposal unit.
You will have to pay monthly or yearly premiums for your home warranty, and you'll also need to pay a service charge or call-out fee every time you call a contractor through your policy. There might be a deductible to pay as well, depending on your policy. Every home warranty provider has slightly different fees, but usually, the price is determined by the size of your property and the number of items that you're including in the coverage.
The 5 Best Home Warranties for Homeowners
Choice is popular with many homeowners, thanks largely to its superlative customer service, which is operational 24/7. Choice boasts an ‘Uber’-style dispatcher system which locates the nearest available contractor to your house so that you get help as soon as possible, a comprehensive list of appliances covered by its basic policy, and the option to add even more through the Total plan. If you have items that aren’t included, you can add them to your policy as extras.
Excellent customer service
Fast response using ‘Uber’-style dispatch program
Comprehensive list of included appliance
Policy doesn’t cover professional-quality items
Long list of exclusions could be an unpleasant surprise
A solid choice for homeowners looking for a reliable home warranty policy, Select’s 3 plans offer varying levels of coverage, from Bronze, which covers only kitchen appliances, up to Platinum, which even pays for your garage door opener and ceiling fans. You can add extra items to your policy for an additional charge. Select’s response time is good, with 24/7 customer service, online chat, and the promise to have a contractor at your door within 2 working days.
Flexible policy plans
Multiple easy ways to make a claim
Frequent special offers for lower-cost policies
Lower cap on coverage value during your first 3 months of coverage
Warranty only covers essential elements of your appliance
Total Home Protection wins approval for its commitment to providing reliable, screened contractors who respond quickly to a call. Although the website can feel a bit aggressive, customers are reassured by Total Home Protection’s deep commitment to their needs. Total Home Protection offers 3 price plans, plus the option to add on extra items. There’s a special offer of one month free, but you’ll need to call to get a price quote.
24/7 customer service including live chat
1-month free special offer
Website can appear overly pushy and aggressive to new visitors
You’ll need to call for a price quote
With a reputation as one of America's leading home warranty providers, First American offers 2 price levels as well as the possibility to add extra appliances. Its list of exclusions is far shorter than many other home warranty providers, too. It has wide coverage across the US, guarantees all work for 30 days and will replace items that it can't repair. In addition, First American has a high customer service rating and is available to users 24/7 via telephone or online.
Guarantees all repair work for 30 days
Will replace items that can’t be repaired
Covers damage caused by rust, sediment, or lack of maintenance, which is excluded by most other providers
Service fee is slightly higher than average
If the parts aren’t available to fix some items, you’ll be offered cash in place of service
5. AFC Home Club
AFC Home Club aims to provide an entire lifestyle support service alongside your home warranty, so you can access retail benefits and earn gift cards, as well as enjoying good home warranty coverage. AFC Home Club has one of the highest claim limits going and sets times for service calls within 8 hours. Although the most basic Bronze plan covers only air-conditioning, heating, and water heater systems, the top Gold plan is very comprehensive, and you can add extra items on top of your chosen plan.
High claim limit of up to $7,500
Extra lifestyle benefits
No need for home inspection before signing up
You’ll need to call up for a price quote
The exclusions aren’t all fully clear
What’s the Difference Between a Home Warranty and Home Insurance?
Home insurance pays for damage done to your home itself or to your personal possessions by some kind of catastrophe. It could be a fire, flood, burglary or other natural disaster—home insurance will cover it.
Home warranties are different. A home warranty covers the cost of fixing or replacing your electrical or mechanical appliances only. Unlike home insurance, a home warranty pays for damage due to the wear and tear of regular use.
Why Do Homeowners Need a Home Warranty Plan?
A home warranty plan is a good choice for many homeowners. You know that every appliance is going to break down or wear out at some point—you just don’t know when. A home warranty policy gives you the peace of mind of knowing that whenever it happens, you’ll be covered.
Usually, a home warranty gives you better prices for repair or replacement of your appliances than you'd be able to negotiate on your own. It helps that the age of your home doesn't make much difference to the cost, so if you have an older home with appliances that are more likely to need fixing, you'll be able to get coverage without paying through the roof.
Having a home warranty policy also makes it easy for you to access a reliable local contractor. It’s an especially good idea for older homeowners who might find it difficult to do small repairs on their own, or for anyone who’s too busy to search for an electrician in an emergency (which would be most of us).
A home warranty is particularly recommended for home buyers and sellers. If you’ve agreed to buy a home, a home warranty provides reassurance that if anything breaks down between signing the contract and your move-in date, it’ll be fixed. For home sellers, offering a home warranty can be a good sweetener to attract buyers. It also means that you won’t worry about a broken furnace tanking your deal at the last minute.
The Choice is Yours
As a homeowner, you know the importance of keeping your appliances and systems running like new, which is why it’s vital that you protect them with a home warranty plan. Select the plan that’s right for you and never worry about home repairs again.