A home warranty is a contract that covers the service, repair, or replacement of major home systems and appliances. Think of a home warranty as a safeguard for when things go wrong with your home’s appliances and systems. A home warranty plan lets you make one phone call or request rather than take the time and effort to research local contractors for home repairs.

The This Old House Reviews team has performed in-depth research on the best home warranty companies, including listening to service calls, interviewing industry experts, and thoroughly analyzing customer reviews. A lot of jargon is involved with home warranties, so we recommend you read this guide to better prepare you for contacting home warranty providers.

What Is a Home Warranty Plan?

A home warranty is a service contract between you and a provider that covers repair costs on selected items in and around your home. Home warranties cover breakdowns due to routine wear and tear, but any damage or malfunction due to neglect, misuse, or natural disasters are typically not covered.

How Does a Home Warranty Work?

After you purchase a home warranty, coverage typically starts within 30 days of your first payment. If a covered item or system breaks down while under warranty, you can file a claim or service request with your provider and get the issue addressed.

If you are currently purchasing a home, you can roll your home warranty into your mortgage payments. Bring this up with your mortgage lender to confirm with your home warranty company if this is possible.

Overall, the process of using a home warranty looks like this:

  1. First, a covered appliance or system breaks down due to wear and tear.
  2. Then, you call your home warranty provider to submit a claim online.
  3. The home warranty company processes the service request. Once processed, the company sends a technician to your home. This step occurs within 48 hours, on average.
  4. The technician observes the system or appliance at your home and recommends a repair or replacement. You must pay the set service call fee stated in your home warranty contract at this time.
  5. If the repair is minor enough and the contractor has the necessary parts, they can repair it immediately. However, the technician will schedule a follow-up appointment if an entire replacement is needed.
  6. Once the repair or replacement is complete, you can enjoy your newly functioning system or appliance with peace of mind and return to business as usual.

What Does a Home Warranty Cover?

Home warranty coverage varies according to plan type. A provider typically offers three types of home warranty plans: systems, appliance, and combination plans.

  • System plans cover major home systems, including air conditioning, heating, ductwork, HVAC, plumbing, water heaters, garbage disposals, smoke detectors, ceiling fans, and doorbells.
  • Appliance plans cover most appliances, such as your refrigerator, dishwasher, range, oven, stove, built-in microwave, clothes washer and dryer, garage-door opener, and freestanding ice makers.
  • Combo plans cover both systems and appliances. Combination plans are the most popular, and home warranty companies often include extra perks with them.

Some home warranty companies offer custom plans where you can mix and match items you want covered. Many providers also provide optional coverage for miscellaneous items, such as your pool, hot tub, spa, or second refrigerator. Customers can add these items to their plans for an additional monthly cost.

What Does a Home Warranty Not Cover?

It is important to note that home warranties do not cover all repairs. Below, we’ve listed some of the most common exclusions and limitations home warranty providers add to their contracts:

  • Preexisting conditions at the time a home warranty begins
  • Damage caused by the improper installation or maintenance
  • Misuse of an appliance or system by using it for purposes other than residential use
  • Cosmetic issues
  • Internet-based components of an appliance

We recommend finding out a provider’s specific exclusions by asking a representative or looking for coverage limitations in a sample contract. A home warranty company may also set payout limits on specific systems and appliances. Once you reach those limits, you must pay any extra costs out of pocket.

How Is a Home Warranty Different from Home Insurance?

While both a home warranty contract and a home insurance policy function similarly, they vary significantly in their offerings. A home warranty is an optional policy that helps cover the costs of general breakdowns from wear and tear to your home’s systems or appliances. Homeowners insurance, however, is a mandatory policy.

Learn further details between home warranties and home insurance plans with this chart:


IssueHome WarrantyHome Insurance
Your appliances are damaged due to a surge caused by lightning.-
An air conditioning system begins blowing warm air during operation.-
Hot water isn’t running because your water heater has broken down.-
A fire breaks out, leaving a few appliances inoperable.-
The structure of your home shows signs of damage.-
Due to age and normal wear and tear, the washer and dryer begin malfunctioning.-

How To Get a Home Warranty

If you have decided that a home warranty is worth it, there are a few factors to consider when deciding on the best possible protection plan for your home. Here’s how to get a home warranty that works for you.

  • Determine the type of plan you want: Some providers organize their plans based on the number of items covered under each plan, while others divide coverage by the type of items, such as systems or appliances. Take note of the items you have in your home and weigh your coverage options before buying a plan.
  • Look at coverage caps: Sometimes, a home warranty company places coverage caps on certain appliances or systems. This amount tends to cover repair costs but may not be enough for an entire replacement. For example, if your electrical system has a $2,000 coverage cap, you are responsible for paying any costs past that amount.
  • Think about pricing: If you’re on a budget, plans less than $50 a month will typically suit your needs. Many companies let you pay monthly to make plans slightly more affordable if you cannot pay a hefty up-front fee. Also, pay attention to what service call fee you receive, as you will pay this every time.
  • Consider customer service: Customer service is crucial to home warranties. For example, if an item or system breaks down, you’ll want a responsive and helpful customer service team to help you get it fixed. The best home warranty companies offer 24/7 customer service and an online portal or app where you can easily file claims.
  • Research the company’s reputation: When searching for a provider, look for one with at least a B rating from the Better Business Bureau (BBB). Read other third-party customer review sites, such as Yelp and Google Reviews, to get a good idea of what it’s like to work with that home warranty company. If you are a home buyer, you might raise this topic with your real estate agent to see their suggestions.

Recommended Home Warranty Companies

Consider the following companies if you’re ready to buy a home warranty plan. We recommend getting a quote from both providers. This way, you can closely compare your options and negotiate better deals.

  • Liberty Home Guard: Liberty Home Guard (LHG) provides solid home protection via its three coverage plans. It pairs each plan with a $2,000 coverage cap per covered system and appliance and extends a 60-day workmanship guarantee. Additionally, LHG offers over 30 add-ons to fully customize your coverage.
  • American Home Shield: American Home Shield (AHS) is one of the most trusted companies in the industry and our top pick. The company provides generous coverage caps and offers comprehensive coverage plans. AHS lets you choose between a $100 and $125 service fee. It also offers unique coverage, such as rust, corrosion, and sediment damage.
  • Select Home Warranty: Select Home Warranty provides ​a low service call fee and budget-friendly premiums. It includes free roof-leak coverage in each plan, adding more value for your dollar. Select’s plans tend to cost around $41–$47 per month. The company does not service Nevada, Washington, and Wyoming.

FAQ About How Home Warranties Work

Our Rating Methodology

The This Old House Reviews Team backs up our home warranty ratings and recommendations with a detailed rating methodology to objectively score each provider. We conduct research by speaking with company representatives, requesting quotes, analyzing sample contracts from each company, and conducting focus groups and consumer surveys. We then score each provider against our review standards for coverage, value, trustworthiness and transparency, availability, and customer service to arrive at a final score out of 100.  

To share feedback or ask a question about this article, send a note to our Reviews Team at reviews@thisoldhousereviews.com.