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The Best Home Warranty Companies Of 2020

Emma Tomsich9-minute read

January 13, 2021

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If you’ve recently bought a house or are thinking of purchasing one soon, the phrase “home warranty” has probably crossed your mind. I’m sure you’ve wondered about the basics of what a home warranty is, while also considering what company you should get yours from.

A home warranty is a service contract that covers the cost of repairing or replacing any major systems or appliances in your home. It can cover home systems such as your plumbing or electrical, as well as major appliances which may include your dishwasher or air conditioner. In addition, you can buy add-on coverage for other appliances and home fixtures like your washer and dryer or swimming pool.

Its important to note that a home warranty is different from homeowners insurance, which covers the cost of property damage, theft of personal property or lawsuits against your property.

Because a home warranty and homeowners insurance are separate policies, a home warranty is an expense that one should factor into home buying. Nevertheless, you should be aware that a good home warranty shouldnt break the bank.

Heres a list of your top-ranked home warranty companies.

How We Chose The Best Home Warranty Companies

When researching and comparing each home warranty company, we followed specific criteria, which considered the best companies for customization, customer service, reliability, pricing and the best for overall coverage and service. Heres what we found:

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American Home Shield: Best For Customization

As one of the largest and most frequently chosen home warranty companies in the country, its no surprise that we rated American Home Shield as best for customization.

American Home Shield has been in business for almost 50 years and is known for offering low cost options, with an annual cost ranging from $480 $1,000+ per year. In addition, American Home Shield offers a wide variety of coverage add-ons and has service fees ranging from $75 $125, depending on your plan. American Home Shield also has earned a B rating from the Better Business Bureau (BBB) rating in customer satisfaction.

But what most people know American Home Shield for is their Build Your Own Plan option, which gives homeowners the ability to pick and choose what appliances they want to be a part of their home warranty.

Though American Home Shield has a lot to offer homeowners, some drawbacks to their warranties are that they have low annual limits on some applications and systems, and they also require prior authorization if homeowners choose to use their own technicians.

Plans Offered

American Home Shield offers four home warranty plans:

  1. The Appliances Plan: Covers home appliances, including the refrigerator, range/oven/cooktop, washer and dryer, dishwasher, built-in microwave, trash compactor, freestanding ice maker, garage door opener, and built-in food center.
  2. The Systems Plan: Covers home systems, including the air conditioning (including ductwork), heating (including ductwork), electrical, doorbells, smoke detectors, ceiling fans, plumbing (including stoppages), water heater, garbage disposal, instant hot/cold water dispenser, and central vacuum.
  3. The Combo Plan ($59.99 per month): Covers everything offered by both the Appliances Plan and the Systems plans.
  4. The Build Your Own Plan: As previously mentioned, this plan only covers the appliances and systems you choose. You can also add extra coverage for electronics, pools and spas, a well pump, septic system, and guesthouse

The prices of American Home Shields plans vary by region and plan. Specific pricing can be found on American Home Shields website.

Liberty Home Guard: Best For Customer Service

Liberty Home Guard is an up-and-coming home warranty company with only two years in the industry. Nonetheless, it has established strong relationships with homeowners and excelled in customer service, earning an A rating from the BBB.

Liberty Home Guard is the most trusted home warranty company with the best customer service. Its plans feature a 60-day workmanship guarantee for repairs, and the company has a survey module that lets customers and technicians send direct feedback to the Liberty Home Guards Executive team.

In addition, Liberty Home Guard has less expensive service fees than its competitors, totaling to only $60. The annual cost of a home warranty plan with Liberty Home Guard ranges from $480 $720 per year.

While many customers are highly satisfied with Liberty Home Guard, the company doesnt allow customers to choose their own service technician without authorization, just like American Home Shield. In addition, Liberty Home Guard is not available in California, Hawaii, Illinois, Indiana, Iowa, Oregon, Washington, Wisconsin or Wyoming.

Plans Offered

Liberty Home Guard offers three home warranty plans:

  1. The Appliance Guard Plan ($39.99 per month): Covers important appliances, including the washer and dryer, refrigerator, built-in microwave oven, dishwasher, garbage disposal, range/oven/cooktop, ceiling and exhaust fans, and garage door opener.
  2. The System Guard Plan ($49.99 per month): Covers essential home systems, including air conditioning, heating, ductwork, plumbing, electrical and water heater.
  3. The Total Home Guard Plan ($59.99 per month): Covers everything offered by both the Appliance Guard Plan and the System Guard plans.

In addition to these home warranty plans, Liberty Home Guard offers optional coverage for these 20 items that you can include with any plan: pool and spa, additional spa, gutter cleaning, floor and carpet cleaning, sump pump, septic system plumbing, limited roof leak, pest control, central vacuum, standalone freezer, rekey, second refrigerator, well pump, fixtures (lighting and plumbing), water softener, lawn sprinkler system, electronics protection, swamp cooler, ejector pump, and grinder pump

Prices of Liberty Home Guards plans vary depending on where you live, the plan you choose, and the optional coverage you select. More accurate prices can be found on Liberty Home Guards website.

First American Home Warranty: Best For Reliability

First American Home Warranty is known as the home warranty company with the best reliability, offering customers 24/7 ability to submit a claim.

Being in business for 25 years, First American Home Warranty covers systems and appliances that were improperly installed or maintained and has a BBB rating of B+.

First American Home Warranty offers affordable monthly premiums, with a service fee of $75 and annual costs ranging from $432 $456 per year.

Unfortunately, First American Home Warranty is not available in Alaska, Connecticut, Delaware, Hawaii, Illinois, Louisiana, Maine, Massachusetts, Minnesota, New Hampshire, New Jersey, New York, North Dakota, Rhode Island, Vermont or Wisconsin.

In addition, First American Home Warranty doesnt provide coverage for roof leaks, and air conditioning is only covered if purchased through an optional add-on.

Plans Offered

First American Home Warranty offers two home warranty plans:

  1. The Basic Plan ($25.00 per month): Covers essential appliances, including washer and dryer, refrigerator, dishwasher, oven/range/cooktop, microwave, garbage disposal and trash compactor.
  2. The Premier Plan ($39.50 per month): Covers major home systems and appliances, including everything in the Basic Plan plus plumbing, plumbing stoppages, heating system, water heaters, electrical systems, garage door opener, ductwork, central vacuum system.

Optional add-ons offered by First American Home Warranty for additional costs include central air conditioning system, secondary refrigeration, pool and spa equipment, and well pump.

First American Home Warranty also offers an additional first-class upgrade, which covers cosmetic damage on home systems or appliances along with other benefits. More information about First American Home Warrantys first-class upgrade and coverage exclusions can be found on the company website.

Prices of First American Home Warrantys plans vary depending on where you live, the plan you choose, and the optional coverage you select. More accurate prices can be found on First American Home Warranty's website.

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America’s First Choice Home Club: Best For Overall Coverage And Service

As the top-rated home warranty company for overall coverage and service, Americas First Choice Home Club has a lot to offer homeowners.

Affirming their excellent customer service, AFC Home Club offers member discounts on consumer goods, restaurants, and entertainment, along with other benefits like free credit monitoring, identity protection alerts, and Emergency Alert Network services.

In the companys 11 years of business, AFC Home Club has earned a B rating from the BBB.

In addition, AFC Home Club has 24/7 customer service, allows homeowners to hire their own contractor or use one in its technician network, and guarantees parts and labor for the life of their membership.

The annual cost of AFC Home Clubs home warranty plans range from $518 $709, with a service fee ranging from $75 $125.

As a downside, AFC Home Club charges a $75 cancellation fee. The company also requires homeowners to submit a claim within one day after noticing an issue with a system or appliance and does not offer rekey or HVAC service coverage or optional roof leak coverage.

Plans Offered

AFC Home Club offers four home warranty plans:

  1. The Platinum Plan ($59.09 per month): Covers air conditioning, heating, water heater, electrical, plumbing/plumbing stoppages, ductwork, washer and dryer, refrigerator, built-in microwave, ice maker, oven/range/stove, dishwasher, garbage disposal, and garage door opener.
  2. The Gold Plan ($52.27 per month): Covers air conditioning, heating, water heater, electrical, plumbing/plumbing stoppages, ductwork, washer and dryer, refrigerator, oven/range/stove, dishwasher, garbage disposal, and garage door opener.
  3. The Silver Plan ($43.18 per month): Covers clothes washer and dryer, refrigerator, oven/range/stove, dishwasher, garbage disposal, and garage door opener.
  4. The Systems Plan ($43.18 per month): Covers air conditioning, heating, water heater, electrical, plumbing/plumbing stoppages, and ductwork.

AFC Home Club also offers optional coverage for items such as a sump pump, well pump, pool and spa, septic system, hot water dispenser, standalone freezer, central vacuum, and tankless water heater.

Prices of AFC Home Club's plans vary depending on where you live, the plan you choose, and the optional coverage you select. More accurate prices can be found on AFC Home Clubs website.

American Residential Warranty: Best For Pricing

Although American Residential Warranty is known for having the best pricing, they also excel in many other areas.

For example, American Residential Warranty offers exceptional customer service, giving customer support and emergency services 24 hours a day, 7 days a week, 365 days a year. For this reason and more, the BBB gave American Residential Warranty an A+ rating.

In addition, American Residential Warranty guarantees service repairs for 30 days. What makes American Residential Warrantys service even better is their industry low service fee of only $55.

American Residential Warrantys annual cost ranges from $300 $1,500 per year.

Drawbacks of American Residential Warrantys services are that they dont allow claims to be filed online, they have low coverage caps on many appliances and systems, and they only allow cancellation through written notice, which might not be beneficial for technology driven homeowners.

Plans Offered

American Residential Warranty offers seven home warranty plans:

  1. The Heating & Cooling Plan ($39.99 per month): Covers central air conditioning, central home heating, a humidifier, and interior electrical system.
  2. The Kitchen Plus Plan ($34.99 per month): Covers the interior electrical system, refrigerator, range/oven/cooktop, dishwasher, built-in microwave, garbage disposal, kitchen exhaust fan, and water heater.
  3. The Platinum Plan ($49.99 per month): Covers central air conditioning, central home heating, humidifier, interior electrical system, refrigerator, range/oven/cooktop, dishwasher, built-in microwave, garbage disposal, kitchen exhaust fan, and water heater.
  4. The Platinum Premier Plan ($59.99 per month): Covers central air conditioning, central home heating, humidifier, interior electrical system, refrigerator, range/oven/cooktop, dishwasher, built-in microwave, garbage disposal, kitchen exhaust fan, water heater, plumbing system, plumbing stoppages, ductwork, garage door opener, refrigerator ice maker, and ceiling fans.
  5. The 3-in-1 Bundle ($109.99 per month): Covers central air conditioning, central home heating, humidifier, interior electrical system, refrigerator, range/oven/cooktop, dishwasher, built-in microwave, garbage disposal, kitchen exhaust fan, water heater, plumbing system, plumbing stoppages, ductwork, garage door opener, refrigerator ice maker, ceiling fans, washer and dryer, deluxe advantage, and ultimate electronics protection.
  6. The 4-in-1 Bundle ($124.99 per month): Covers central air conditioning, central home heating, humidifier, interior electrical system, refrigerator, range/oven/cooktop, dishwasher, built-in microwave, garbage disposal, kitchen exhaust fan, water heater, plumbing system, plumbing stoppages, ductwork, garage door opener, refrigerator ice maker, ceiling fans, washer and dryer, deluxe advantage, ultimate electronics protection, and water line and sewer line.
  7. The Ultimate Electronics Protection Plan ($24.99 per month): Covers all of your new and used electronics.

Prices of American Residential Warrantys plans vary depending on where you live, the plan you choose, and the optional coverage you select.

For more information about prices and what is covered by the Deluxe Advantage Plan, Ultimate Electronics Protection Plan, and other optional add-on items for coverage, visit American Residential Warrantys website.

The Best Home Warranty Companies Compared Side By Side

 

Best For

Annual Cost

Service Fee

BBB Rating

American Home Shield

Customization

$480 - $1,000+

$75 - $125

B

Liberty Home Guard

Customer Service

$480 - $720

$60

A

First American Home Warranty

Reliability

$432 - $456

$75

B+

America’s First Choice Home Club

Overall

$518 - $709

$75 - $125

B

American Residential Warranty

Pricing

$300 - $1,500

$55

A+

Red Flags: What To Avoid When Choosing A Home Warranty Company

When choosing between multiple home warranty companies, its important that youre aware of both obvious and hidden red flags.

For example, if youre reading company reviews and it mentions that claims are frequently rejected, thats a major red flag.

Another red flag is if companies arent able to provide you with a sample contract by sending it to you or posting it on their website. Its also a red flag if your contract doesnt list a specific service fee, or your contract doesnt outline payout limits or the repairs that are or are not covered.

What Is The 1% Rule?

The 1% Rule is used to figure out a reasonable amount you should spend on your home warranty. By following this rule, you will need 1% of your homes value per year to put toward maintenance costs, including the home warranty.

What Is The Square Foot Rule?

The Square Foot Rule is similar to the 1% Rule, in that it helps a homeowner decide how much money is reasonable to spend on a home warranty. However, unlike the 1% Rule, the Square Foot Rule focuses more on the size of your home than its estimated value.

Ultimately, the Square Foot Rule states that you will need $1 per square foot of your home to keep for maintenance, including the home warranty.

What Home Warranties Typically Don’t Cover:

  • Appliances that are already under warranty (this means that people with a house full of new appliances may not need a warranty).

  • Preexisting conditions (this means that homeowners shouldnt count on a home warranty to fix anything identified in their home inspection).

  • Problems that occur as a result of improper maintenance.

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Emma Tomsich

Emma Tomsich is a student at Marquette University studying Corporate Communications, Marketing and Public Relations. She has a passion for writing, and hopes to one day own her own business. In her free time, Emma likes to travel, shop, run and drink coffee.