What is a home warranty?
A home warranty is a service contract that covers the repair or replacement of major home systems and appliances due to normal wear and tear. It's essential for homeowners seeking financial protection against unexpected breakdowns, offering peace of mind and potentially saving thousands in repair costs.
Key Insights
- Home warranties cover repair costs for major appliances and systems to prevent unexpected expenses.
- When filing claims, homeowners pay only a service fee while warranty companies arrange repairs.
- Choice Home Warranty offers simple plans with $100 fees and up to $3,000 coverage per claim.
- Warranties typically protect heating, AC, electrical, plumbing systems and essential home appliances.
Why a home warranty matters in 2026
A home warranty is especially important in 2026 due to rising repair costs, aging home systems, and increased financial uncertainty for many homeowners. With inflation driving up the price of parts and labor, a single unexpected breakdown, like a failed HVAC or plumbing issue, can quickly strain a household budget. For first-time buyers or those without a robust emergency fund, a home warranty provides a reliable safety net, offering predictable costs and faster access to vetted service professionals. In an era where peace of mind and financial stability matter more than ever, having home protection in place is a smart and timely decision.
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What does a home warranty cover?
Home warranty plans typically offer coverage for:
Home Systems: HVAC (heating, ventilation, and air conditioning), electrical systems, plumbing systems, water heaters, and ductwork.
Appliances: Refrigerators, ovens, cooktops, dishwashers, built-in microwaves, washers, dryers, and garbage disposals.
Additional Items: Garage door openers, ceiling fans, and sometimes roof leaks (limited coverage).
Coverage varies by provider and plan, so it's crucial to review the specific terms of your home protection plan.
How does a home warranty claim process work?
Review Your Contract: Ensure the item in question is covered under your home warranty plan.
File a Claim: Contact your home warranty company via phone or online portal.
Schedule Service: The company assigns a licensed contractor to assess the issue.
Diagnosis and Repair: The technician diagnoses the problem and performs the necessary repair or replacement.
Pay Service Fee: You pay a predetermined service fee, typically ranging from $75 to $125.
What do home warranties exclude?
Pre-existing Conditions: Issues known before the warranty start date.
Improper Maintenance: Failures due to lack of maintenance.
Cosmetic Damages: Non-functional issues like scratches or dents.
Secondary Damages: Consequential damages resulting from a covered item’s failure.
Coverage caps may apply, limiting the amount payable per item or per term.
When should you consider a home warranty?
Purchasing an Older Home: Older systems and appliances are more prone to breakdowns.
Limited Emergency Funds: A home warranty can mitigate unexpected repair costs
First-Time Homeowners: Provides a safety net during the initial years of homeownership.
- Landlords: Simplifies maintenance for rental properties.
Our Top 3 Picks
- 1
Get full coverage and round-the-clock supportVisit SiteCall732-907-4849732-907-4849- Pricing - $50-$60/month
- Service Fee - $65-$100 per claim
- Best for - Homeowners seeking affordable full-home coverage
Get full coverage and round-the-clock supportRead Choice Home Warranty ReviewChoice Home Warranty offers straightforward plans with uniform pricing. Both the Basic and Total plans bundle systems and appliances, eliminating the need to choose between coverage types. The company provides coverage up to $3,000 per claim and includes a 60-day workmanship guarantee, double the industry standard 30-day term.
Coverage highlights:
All plans bundle systems and appliances
49 states (excluding Washington)
24-48 hour technician dispatch
First month free with annual payment
60-day workmanship guarantee (2x competitors)
What to consider: The $3,000 cap works well for standard systems but may not fully cover high-end replacements. Keep dated HVAC maintenance receipts to avoid "improper maintenance" claim disputes, which are common with high-volume providers.Expert perspective: Best value for homeowners with average-value systems who prioritize predictable pricing over customization. The 60-day workmanship guarantee provides superior protection. Ideal for first-time warranty buyers.
Choice Home Warranty Pros & Cons
PROS
Offers 30-day guarantee on covered repairsFirst month free with purchase of any single payment planEasy online claims processCONS
Limited add-on coveragesNot available in Washington - 2
Customizable plans with adjustable service feesVisit SiteCall888-928-2359888-928-2359- Pricing - $40-$100/month (varies by plan)
- Service Fee - $75, $100, or $125 (you choose)
- Best for - Older homes with aging systems
Customizable plans with adjustable service feesRead American Home Shield ReviewAmerican Home Shield, operating since 1971, is the largest provider in the market with over two million members. Three customizable plans (ShieldSilver, ShieldGold, ShieldPlatinum) range from 14 to 23+ covered items, with the top tier offering free HVAC tune-ups, unlimited A/C refrigerant, and coverage up to $5,000 for HVAC systems.
Coverage highlights:
Choose your service fee to optimize monthly premium
Covers undetected pre-existing conditions and maintenance issues
Covers duplicate items, rust, and corrosion
47 states, plus Washington DC
Highest HVAC limit ($5,000)
Key advantage: Undetected pre-existing conditions coverage shifts the burden of proof away from homeowners, potentially saving thousands in disputes. Most competitors require you to prove systems were working at enrollment.What to consider: Service fee strategy matters. Higher fees ($125), lower monthly premiums for infrequent claims. Lower fees ($75) increase monthly costs but reduce per-incident expenses. No guaranteed repair timeframes, and contracts are required for best pricing.
Expert perspective: Strongest choice for homes 8+ years old where pre-existing condition disputes are likely. The $5,000 HVAC limit and established contractor network provide superior reliability for aging systems.
American Home Shield Pros & Cons
PROS
Highly customizable plansIncludes undetectable pre-existing conditionsCovers older items, including rust and corrosionCONS
No guarantee for repair timesNot available in Alaska, New York City, or Hawaii - 3
Covers items regardless of ageVisit SiteCall888-319-2254888-319-2254- Pricing - $55-$75/month (varies by plan)
- Service Fee - $75-$125 per claim
- Best for - High-end appliance protection
Covers items regardless of ageRead First American Home Warranty ReviewFirst American Home Warranty specializes in appliance coverage with industry-leading limits up to $7,000 per appliance under premium plans. Operating since 1984, the company has saved homeowners over $219 million. Items are covered regardless of age, with brand-new replacements when repair isn't possible.
Coverage highlights:
Up to $7,000 per appliance (vs. $2,000-$4,000 competitors)
HVAC coverage up to $3,500 (some plans higher)
Brand-new replacements for unrepairable items
24/7 claims with vetted tradespeople
Covers code violations and improper installation (Advantage upgrade)
Key advantage: The $7,000 appliance limit is crucial for luxury kitchens with Sub-Zero refrigerators, Wolf ranges, or Miele dishwashers. Standard plans cap at $2,000-$4,000, leaving significant gaps for high-end equipment.
What to consider: Available in only 36 states. Verify HVAC coverage matches your system's replacement cost since the company focuses more on appliances than systems. The mobile app has lower ratings than the web platform.
Expert perspective: Definitive choice for homeowners with luxury appliances who need coverage matching actual replacement costs. Best for those who've upgraded HVAC but have aging premium kitchen equipment. Verify adequate HVAC protection for your specific plan.
First American Home Warranty Pros & Cons
PROS
24/7 claims serviceFully vetted tradespeopleLow pricing and service feesCONS
Difficult to understand pricing breakdown without a personal quoteTheir app is poorly rated
