While there are plenty of reputable home warranty companies in the industry, there are some companies that take advantage of their customers by overcharging on plans, not following through with service requests, and refusing to issue refunds.
In this review, we’ll explain how you can spot a bad home warranty company, which home warranty companies to avoid, how to purchase a home warranty, and our recommendations for the top home warranty providers in the industry.
No time to read our full review? Ultimately, we recommend American Home Shield (AHS) for homeowners who are looking for a comprehensive home warranty policy. With affordable pricing and easy customization options, American Home Shield is a strong choice for most homeowners.
What Makes a Home Warranty Company Bad?
Most home warranty companies will make sure the services they offer are legitimate and sustainable. Unfortunately, there are a few home warranty companies out there that aren’t as trustworthy. These home warranty companies tend to share a few common characteristics.
- Aggressive and misleading marketing tactics—One tell-tale sign of a bad home warranty company is aggressive marketing. A home warranty company might bombard you with phone calls or emails after you’ve made it clear that you’re not interested in buying or renewing a plan. Some companies might also attempt to create a false sense of urgency by running a sale, leaving customers to discover that plan prices don’t actually increase after the offer was supposed to “expire.”
- Unjustified claim denials—Home warranty companies lose money when they need to pay technicians to service repairs or make replacements, so they may hide policy limitations in fine print within their service contracts, which could lead to claim denials.
- Inexperienced service—When a home warranty company performs services or replacements, it might produce results that are less than expected. For example, some homeowners have claimed that their home warranty company refused to replace an old, outdated appliance, instead applying a quick fix that would inevitably lead to another breakdown. Some homeowners have also complained that their home warranty company sent inexperienced repair professionals to provide service.
- Poor communication—Great communication is a cornerstone of any good home warranty company. Some homeowners have complained that, after filing a complaint, their home warranty company didn’t respond for days or weeks at a time. The best home warranty companies should respond to claims within 24–48 hours.
- Delays in repairs and replacements—In addition to poor communication, the worst home warranty companies take days or even weeks to schedule a repair. This can cause additional damage to your home systems and appliances.
- Reimbursement issues for repairs—Some home warranty companies allow homeowners to choose their own repair technicians and offer a reimbursement after the repair has been completed. Some homeowners have complained that their home warranty company failed to reimburse them or took too long to issue a reimbursement after they’d submitted a receipt.
- Unexpected costs—Unexpected charges were some of the most common home warranty complaints we found. Homeowners claimed their policy instituted an arbitrary coverage limit, had their policies renewed without consent, or were charged a cancellation fee that wasn’t laid out in their original policy.
Worst Home Warranty Companies
Now that you understand the telltale signs of a bad home warranty company, let’s take a look at some of the worst offenders and why customers advise against them.
1. Secure Home Warranty
Secure Home Warranty was a Philadelphia-based home warranty company that opened in 2016 and offered services in 32 states. The company permanently closed its doors in 2017 after allegedly defrauding its policyholders out of thousands of dollars. The former owners of Secure Home Warranty, Elliot Ashkenazie and Alan Maleh, are currently under investigation by the Pennsylvania Attorney General’s Office for consumer fraud and violations against seniors.
Let’s take a look at some of the most common complaints levied against Secure Home Warranty.
- Unexpected fees—Secure Home Warranty customers complained that they were continuously charged annual fees and service fees even when they hadn’t used their plan or filed a claim.
- Payment delays—Customers allege that on numerous occasions, Secure Home Warranty contacted them after they had filed a claim to tell them that they couldn’t find a qualified technician to service their repairs. The consumers claim the company told them to hire their own technician and request a reimbursement. Many customers claim they never received their reimbursement.
- Communication issues—Secure Home Warranty allegedly promised policyholders access to a 24/7 claims reporting center. What policyholders received was a voice mailbox that was full at all times.
- Alleged fraud—In 2017, Secure Home Warranty shut its doors after failing to provide the services it promised. Consumers didn’t receive a refund for the premiums they paid, and many reviews claim that the company continued to charge their credit cards even after the company shut down.
2. Service America Home Warranty
Service America Home Warranty was a large-scale home warranty company founded in 1973. Over the years, the company grew to offer policies to over 65,000 homeowners throughout Florida. Many customers reported positive experiences with Service America, which offered policies for as little as $20 a month. Unfortunately, that all changed in November of 2018, when Service America abruptly closed its doors.
Let’s take a look at some of the most common complaints former policyholders had in regard to the treatment they received from Service America Home Warranty.
- Repair delays—Even when the company was operational, many customers complained that Service America Home Warranty took weeks and sometimes even months to complete the repairs they promised. Many of these delays resulted from a lack of qualified contractors.
- Unexpected fees—Many customers complained that Service America Home Warranty continued to charge their credit cards after the company shut down.
- Poor communication—After shutting down, Service America Home Warranty promised to return unused portions of each customer’s premiums, but many customers reported that they never received their refunds.
- Sudden shut-down—When Service America Home Warranty shut its doors, no refunds were offered (even after they were promised) and customers were left with no customer service to speak to regarding outstanding claims and premiums.
3. American Home Guard
Another Pennsylvania-based company, American Home Guard opened in 2013. In the first few years of its operation, the company fulfilled its promises and grew its operations to 38 states. Policies were available from less than $40 a month, and consumers were overall satisfied with their policies.
Unfortunately, in 2016, consumers began filing complaints against the company, as it began taking longer and longer to pay out claims. In October of 2018, American Home Guard closed its doors abruptly.
Here are a few of the complaints customers filed against American Home Guard.
- Payment delays—When American Home Guard was in operation, some consumers complained that the company delayed payments or promised them a refund, then went back on that promise, claiming that the repair wasn’t actually covered.
- No 24/7 customer service—American Home Guard had limited customer service hours, which caused further delays in payments.
- Sudden closure—Like other bad home warranty companies, American Home Guard suddenly closed down in 2018. Negative reviews flooded the company’s Better Business Bureau (BBB) page claiming that the company didn’t offer any form of refunds after its closure.
Top Home Warranty Alternatives
Though some home warranty companies are dishonest and take advantage of their customers, not all home warranties are a scam. There are plenty of home warranty companies that offer comprehensive, affordable coverage, provide 24/7 customer service, and initiate service requests within 24–48 hours of receiving a claim. View our recommended home warranty providers below.
1. American Home Shield
Our top recommended home warranty provider is American Home Shield. American Home Shield is a veteran in the home warranty industry and provides comprehensive coverage at affordable pricing.
Here are the pros and cons of choosing American Home Shield for your home warranty policy.
Pros and Cons of American Home Shield
|✔ Has generous coverage caps||✘ Not available in Alaska|
|✔ Does not require maintenance records||✘ Repairs only guaranteed for 30 days|
|✔ Allows customers to choose a $75, $100, or $125 service fee||✘ 14,000+ complaints in past 3 years|
Currently, American Home Shield offers three plan choices: ShieldPlatinum™, ShieldGold™, and ShieldSilver™.
The ShieldPlatinum plan is the most comprehensive plan and covers 23 important items, such as your air conditioning, refrigerator, and dishwasher. The ShieldGold plan is a level below ShieldPlatinum and also covers 23 essential home systems and appliances. However, it has a lower appliance coverage limit than the ShieldPlatinum plan. The ShieldSilver plan covers 14 home systems, such as your plumbing, electrical, and heating.
In general, you can expect to pay $40–$58 per month for an American Home Shield plan. American Home Shield also requires a per-incident trade call service fee. You can choose your own fee between $75 and $125 per service visit. The higher fee you choose, the less you’ll pay each month for your plan and vice versa.
3. First American Home Warranty
Another top home warranty company is First American Home Warranty (FAHW). This company provides 24/7 customer service and doesn’t have a coverage cap on important home systems like your heating, cooling, or ductwork.
Compare the pros and cons of First American Home Warranty below.
Pros and Cons of First American Home Warranty
|✔ Covers systems that were improperly installed, modified, or maintained||✘ Doesn’t let customers choose their own contractor|
|✔ Offers flexible payment plans for customers||✘ Only available in 35 states|
|✔ Has a risk-free, money-back guarantee for 30 days||-|
Like Choice Home Warranty, First American offers two plans: a Basic Plan and a Premier Plan. The Basic Plan covers major appliances like a clothes washer, clothes dryer, and microwave, while the Premier Plan covers home appliances and systems. Plans range between $38–$43 a month, with a service fee of $75 per claim.
Frequently Asked Questions
Our Rating Methodology
The This Old House Reviews Team is committed to providing comprehensive and unbiased reviews to our readers, and we aim to provide transparency in our review standards and research process.
Our research process includes speaking with representatives from more than 40 home warranty providers, requesting quotes, and asking clarifying questions to gain insight into each provider’s benefits and downsides. We also analyze sample contracts from each company to understand specific coverage terms.
To rate companies, we apply the data we have gathered to our review standards. These standards are on a 100-point scoring system, which is detailed below:
- Coverage (35 points): Providers are scored based on breadth and depth of coverage. We focused on key home systems (HVAC, plumbing, and electrical), essential appliances (refrigerator, ovens, and laundry machines), and unique coverage items (such as roof-leak coverage and code violation allowances). Coverage scores are weighted by taking into account coverage caps and other limiting factors, meaning providers with greater range of coverage and higher coverage caps score the highest.
- Value (30 points): A company’s plan value is a reflection of how well it serves the customer in comparison to what the customer pays for the policy. We accounted for monthly costs, service call fees, and cost flexibility (such as customizable service call fees, discounts, and multi-year policies).
- Trustworthiness and Transparency (21 points): Trustworthiness and transparency are a reflection of how well the provider considers the customer’s interests. We scored items such as the length of workmanship guarantees, online availability of a sample contract, policy change flexibility, and ease of cancellation. Additionally, we scored items that reflect industry reputation and customer satisfaction, including analyzing brand reputation across the Better Business Bureau and third-party customer review aggregators.
- Availability and Service (14 points): Quality of customer service is key to customer satisfaction. We dug into each provider’s guaranteed response times, claims processes, service flexibility, emergency availability, and more.
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