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What is a Home Warranty – Our FAQ

What is a home warranty?
A home warranty is a type of insurance that covers repairs and replacements of different home systems, such as electric, plumbing, heating, and air conditioning, as well as various types of home appliances. There are more than 80 home warranty companies in the USA. Some of them include additional services, such as pest control and roof leak coverage. We have reviewed more than 50 of them, and still counting.
The majority of home warranty plans, around 90%, cover all major kitchen and laundry appliances, such as refrigerator, oven, microwave, dishwasher, garage door, water heater, washer, dryer; and home systems, including air conditioner, plumbing, electrical, and heating systems. Usually, only those home systems and appliances that were properly maintained and did not have any preexisting conditions are covered under a home warranty. To read more go to our home warranty coverage guide.

Similar to any type of insurance, in order to get home warranty coverage, you need to sign a contract with a home warranty company. The contract will specify the type of coverage, list the covered items, all fees, deductibles, and premiums.

In the event that one of the covered items breaks, you will need to submit a claim with the company’s representative within a specified time period, usually one day.

The cost of a home warranty depends on different factors such as the type of coverage (basic or comprehensive), the number of items included, the type of housing, the age of the house, and many others. A typical home warranty cost ranges from $400 to $850, with an average of $520 a year.
A home warranty plan is a package offer from a home warranty company to cover certain home systems and appliances. It includes the list of covered items, premiums, and deductible prices. To find tailored plan for you, view our home warranty plan comparison.
How to choose the best home warranty company
To choose the best home warranty company, you need to answer the following questions:

  • Which home systems and appliances do you need to cover?
  • How much will it cost out-of-pocket to fix them?
  • How much does the home warranty plan cost that covers all these items?
  • If the plan is cheaper, does the company have a good reputation and reviews? If so, the right choice will be to get a home warranty from this company.

Top 3 Home Warranty Companies July, 3rd, 2020

#1
Editorial Rating
97.50
  • $50 Off + 1 month free
  • Won't deny coverage if systems/appliances are old
  • Free cancellation within 30 days
  • Emergency service available
  • Reservice for failed repairs

Free

Coverage for 1 Month + $50 off

#2
Editorial Rating
97.00
  • Get $50 off
  • Lower chance of claim denial
  • 24/7 service calls
  • Large and established firm
  • Choose your own service fee!

Get $50 off!

#3
Editorial Rating
95.80
  • $100 off + 2 months free
  • $0 transfer fee
  • Good selection of plans
  • High contractor professionalism
  • Quick replacement payments

Free

Coverage for 2 Months + $100 off

For more selection view our top 5 home warranty companies ranked.

There are multiple possible explanations for the fact that there are so many bad reviews for home warranty companies.

First of all, satisfied customers are, in general, less likely to publish a review. Second, many customers do not read the fine print in the terms and conditions and have higher expectations for the company’s services than they paid for. In general, home repairs can be stressful, and not everything goes as planned, which adds to the customers’ disappointment and low satisfaction.

Lastly, some home warranty companies either have low standards or violate their own rules. In this case, known as home warranty scam, the customers have every right to file complaints with consumer reporting sites and regulating authorities.

Most of the home warranty plans have a list of non-covered parts for every item included in the plan. Additionally, no preexisting condition or condition due to the lack of maintenance will be covered.

Your home warranty coverage details are described in your home warranty plan. It should include all the home systems and appliances that you would like to be covered. All the terms and conditions for your coverage will be listed in your contract.

If your plan does not include the items you need, you can always add them, or switch to a different plan.

Optional coverage is a list of items that can be added to your current plan for an additional price per item. Usually, these items include a swimming pool, spa, well pump, roof leaks, and more.
If your home systems and appliances are well-maintained and do not have any preexisting conditions, they can be covered under a home warranty regardless of their age.
A home warranty policy is a contract that lists all the terms and conditions:

  • Which items are covered
  • Which parts are covered and which are not
  • The coverage limits, premiums, and deductibles
  • How you can cancel or extend a warranty

And many other specific details regarding your home warranty coverage.

You may submit a claim online or by phone.
A service call fee, or a deductible, is the amount you pay every time you submit a claim either to your home warranty company or directly to the contractor. There are companies with zero service call fees, but usually, deductibles range from $60 to $150.
One your covered home system or appliance breaks down, you need to submit a claim as soon as possible. About 25% of the home warranty providers expect their clients to notify them of a home system or appliance breakdown within one day. Once a non-emergency service request is submitted, 40% of companies will send authorized contractors within two business days, and 7.5% of companies will send someone within one day. However, on the other side of the spectrum, some companies (1.5%, to be exact) will only send a repairman within 30 days.
About 80% of home warranty companies offer emergency services 24/7/365. Only 8% do not have any emergency services, and 2% charge extra for emergencies.
Usually, there is no limit to the number of repairs per contract term, but there may be a coverage limit. Once it has been reached, you will have to pay out-of-pocket for all extra repairs.
There can be multiple reasons for claim denials. The most popular ones are:

  • Your coverage has not started yet. In the majority of the companies, coverage starts 30 days after the contract is signed.
  • Preexisting condition.
  • Poor maintenance.
  • This particular part is not covered by your plan.
  • And other terms and conditions specified in your contract, usually in the fine print.
About 80% of home warranty companies offer emergency services 24/7/365. Only 8% do not have any emergency services, and 2% charge extra for emergencies.
Preexisting conditions are those that the items had before they were covered under a home warranty. Many of them are found during the mandatory inspection. Many home warranty companies deny coverage for preexisting conditions.
Before signing a contract, your home warranty company may send an inspector to perform a home inspection of your systems and appliances. The inspector will make a report on any preexisting conditions. Based on this report, the company representative may make a decision to approve or deny a claim.
If the repair of your home appliance is more expensive than a new item, the company may suggest that you replace it. However, the new item may not be the same in terms of quality and price because the company has a coverage limit. Alternatively, the company may issue a check for the item in the amount not exceeding the coverage limit.
In case you don’t trust your contractor’s opinion, you may ask for another contractor and get a second opinion. Some companies will charge you a deductible. In any case, other companies will not charge it if the second opinion was different from the first one.
Usually, home warranty companies make agreements with local contractors to provide services on an as-needed basis. Once you submit a claim, the home warranty company contacts the affiliated provider near you and dispatches them to your place.
In most of the cases, the home warranty provider selects the contractor. In some cases, they will allow you to pick your own contractor, but you should get approval beforehand.

To purchase a home warranty, you need to select a home warranty service provider and a plan that fits your needs. Once you’ve made your choice, you can fill in the online form or make a phone call to purchase the plan.

If you buy a new house, the seller may transfer their warranty to your name, or you can get it through your realtor.

Many home warranty companies offer discounts to new customers, such as holiday sales, bonus offers, or a discount if you pay for the whole year vs. month-to-month.
Each home warranty company will have its specific waiting period. Usually, it ranges anywhere from one to 30 days. A total of 54% of companies, including such industry leaders as 2-10 Home Buyers Warranty, or Amazon Home Warranty, have a waiting period of 30 days, making this the most common length of time.
A standard home warranty contract is 12 months, rarely 13, or 14 months. Most home warranties will extend it for another term automatically unless you cancel it.

If you decide to cancel your new contract, you only have a certain amount of time to do so and still get a refund. More than half of the companies give their clients 30 days for making such a decision.

Only one company offers 60 days to end the agreement, while some of them are much less generous—you might only have 20 days, ten days, or even three days to cancel.

If you want to cancel the automatic policy renewal, it’s important to make a cancellation within the specified time period before the contract’s expiration. About 39% of companies allow you to cancel the automatic renewal within 30 days before the end of the contract, and 4.5% let you cancel within 60 days. But be careful—one company only gives three days, and another company gives just one day.

Home insurance usually covers accidental damage to the home or belongings due to theft, extreme weather, fires, and some natural disasters. There are four key areas that are covered:

  • Interior/exterior of home.
  • Personal possessions in the event of theft/damage.
  • General liability surrounding the injury of a person while on the property. (It is offered by home insurance companies and banks and usually costs between $1,000 and $3,500 a year with deductibles ranging from $1,000 up to $8,000.)

A home warranty is a home service contract offered by home warranty companies. Usually, it provides coverage for damage to home systems and appliances due to normal wear and tear. A home warranty costs somewhere between $350 and $1,000 with deductibles ranging between $60 and $125.

While a home warranty covers any home systems and appliances, a manufacturer’s warranty covers only individual items. Usually, when you purchase a brand new item, a manufacturer’s warranty is included for a limited time.

Once it expires, you have an option to extend it for another limited amount of time to switch to a home warranty, which can be extended indefinitely.

A home buyer’s protection is a home warranty that the home buyer gets when they buy a house. They can purchase it directly from a home warranty company or get it through their realtor.
A home buyer and a home seller usually agree on who is paying for a home warranty. In case the home seller already had one, they can transfer it to the home buyer for a small fee.
Some home warranty companies offer a new construction home warranty, which is usually cheaper and lasts longer than a regular home warranty.
Yes, you can buy a home warranty for any type of housing—single-family home, duplex, condo, or mobile home.

To compare the cost of home maintenance to the cost of a home warranty, you need to consider the age of your house, the age of home systems and appliances, and the number and cost of repairs per year. Once you’ve completed these calculations, you need to select a home warranty plan that would cover all your home systems and appliances and compare its cost to the cost of out-of-pocket repair expenses. If the home warranty plan is cheaper, it then makes sense to purchase a home warranty.

To help you compare the cost of maintenance to the cost of a home warranty, we have created a Home Maintenance Calculator that will help you decide whether a home warranty is worth it.

In most cases, home warranty coverage is renewed automatically unless canceled.

If one of your home systems or appliances was recently fixed, but something is wrong with it again, many home warranty companies offer a free reservice period. The free reservice period is the length of time after the original repair in which the home warranty company guarantees reservice if that original repair fails. If you experience an issue regarding your completed repair within this window of time, you won’t have to pay a second time—a contractor will come out and make the repair again.

That way, you won’t have to pay two times for the same repair.

The coverage limit is the maximum amount of money that will be paid for the repairs during the current contract term. Some companies have an overall limit for all repairs; others have limits for each item separately.
Some home warranty companies have different levels of one plan. That means that they cover the same items, but more expensive levels cover more parts than the less expensive ones.

There are three major home warranty Plan types—the Appliances plan, the Systems Plan, and the Combo Plan.

The Appliances Plan covers all major kitchen and laundry appliances, such as refrigerator, oven, dishwasher, built-in microwave, washer, and dryer.

The Systems Plan usually covers plumbing, electrical, heating, and air conditioning systems.

The Combo Plan combines coverage for both systems and appliances. As a result, the Combo Plan is usually the most expensive.

Once you have all your questions about a home warranty answered, starting from what is home warranty to the ins and outs of the policy, it may be the time to begin shopping (if you actually need a home warranty).

Please contact us if you have more questions about home warranties! We will be more than happy to answer them for you.