A home warranty helps protect your home and prevents you from paying for broken system or appliance repairs. Unfortunately, not every home warranty policy is reliable. The worst home warranty companies take advantage of their customers by overcharging on plans, not following through with service requests, and refusing to issue refunds.
We’ll explain how you can spot a bad home warranty company and give examples of untrustworthy providers before sharing recommendations for top home warranty providers to consider instead.
Key Takeaways
- A bad home warranty company exhibits numerous red flags, such as aggressive marketing, operating without proper licensing, and unjustified claim denials.
- We recommend choosing a reliable home warranty provider, such as Liberty Home Guard, American Home Shield, Select Home Warranty, or First American Home Warranty.
- Our home warranty survey revealed most policyholders were happy with their service, with 92.7% saying they were satisfied or very satisfied with their plan.
What Are Signs of a Bad Home Warranty Company?
Home warranty companies offer homeowners peace of mind by protecting their home systems and appliances. However, choosing a low-quality company could lead to delayed claims, poor customer service, and unrecovered funds. Homeowners should look for the following warning signs of a bad home warranty company.
Aggressive and Misleading Marketing Tactics
Aggressive marketing can sometimes signal a bad home warranty company. It might bombard you with phone calls or emails after you’ve declined to buy or renew a plan. Some companies might also attempt to create a false sense of urgency by running a sale and claiming that prices will increase after their offer expires.
Delays in Repairs and Replacements
Typical home warranty companies schedule technicians within a day or two after processing your claim. When we surveyed 1,000 homeowners on their home warranty experience, 38% had completed repairs within one to two days. The worst home warranty companies take weeks to schedule a repair. These delays may cause additional home system and appliance damage depending on your repair needs.
No Business License
Some companies may also operate without proper state licensing. If you suspect a shady company, we recommend checking your state’s consumer protection offices to verify its legal registration.
Poor or Inexperienced Service Technicians
When a home warranty company performs services or replacements, it might produce less-than-expected results. For example, some homeowners have claimed that their home warranty company refused to replace an old, outdated appliance. Instead, they applied a quick fix that inevitably led to another breakdown. Some homeowners have also complained that their home warranty company sent inexperienced repair professionals to provide service.
Poor Communication
Reputable home warranty companies have excellent customer communication and respond to claims within 24–48 hours. Our home warranty survey revealed that we learned that most respondents received an approved claim within 24 hours. You won’t find this same promptness with a questionable provider. Bad home warranty companies can be hard to reach via telephone or email. Some homeowners have complained that, after filing a complaint, their home warranty company didn’t respond for days or weeks at a time.
Reimbursement Issues for Repairs
Some home warranty companies allow homeowners to choose their own repair technicians and then reimburse the completed repair fees. Untrustworthy companies won’t reimburse policyholders or will take too long to issue a reimbursement after submitting a receipt.
Unexpected Costs
In our research of bad home warranty companies, one of the most common complaints we encountered was unexpected charges. Homeowners claimed their policy instituted an arbitrary coverage limit and had their policies renewed without consent. Another common complaint involved receiving a bill for an undisclosed cancellation fee.
Unjustified Claim Denials
Home warranty companies lose money when they need to pay technicians to service repairs or make replacements. To avoid these costs, bad home warranty companies add policy limitations in fine print within their service contracts, which could lead to claim denials.
What Are the Worst Home Warranty Companies?
Our research shows that the below providers are some of the industry’s worst home warranty companies.
American Home Guard
American Home Guard started in 2013 as a Pennsylvania-based company and has grown to 38 states. Policies were available for less than $40 a month, and customers were overall satisfied with them.
In 2016, consumers began filing complaints against the company as it took longer to pay out claims. In October 2018, American Home Guard closed its doors abruptly.
Here are a few of the complaints customers filed against American Home Guard:
- Limited customer service hours: American Home Guard had limited customer service availability, which caused further payment delays.
- No refunds: Negative reviews flooded the company’s Better Business Bureau (BBB) page, claiming it didn’t offer refunds after its closure.
- 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. They claimed that American Home Guard didn’t cover their repairs.
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 per month. However, the company closed for business in November 2018 with little warning.
We’ve highlighted former policyholders’ common complaints regarding Service America Home Warranty below:
- Lack of refunds: The company promised to return unused portions of each customer’s premiums, but many customers reported never receiving their refunds.
- No customer support: When Service America Home Warranty shut its doors, there was no customer support to resolve outstanding claims and premiums.
- Repair delays: Even when the company was operational, many customers complained that Service America Home Warranty took weeks or sometimes months to complete repairs. The company did not have enough qualified contractors to complete the jobs.
- Unexpected fees: Many customers complained that Service America Home Warranty continued charging after its shutdown.
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 of thousands of dollars. In 2019, former Secure Home Warranty owners, Elliot Ashkenazie and Alan Maleh, were investigated by the Pennsylvania Attorney General’s Office for consumer fraud and violations against seniors. They were found guilty of unlawful conduct in 2020.
The most common complaints against Secure Home Warranty included the following issues:
- Alleged fraud: Secure Home Warranty never delivered on its promised services. Consumers didn’t receive a refund for their premiums, and many reviews claim that the company continued to charge their credit cards even after the company shut down.
- Communication issues: Secure Home Warranty allegedly promised policyholders access to a 24/7 claims reporting center. Instead, policyholders could only reach a voicemail that was always full.
- Reimbursement delays: Customers allege that Secure Home Warranty told them to hire their own project technicians and request a reimbursement. Many customers claim they never received their refunds.
- Unexpected fees: Secure Home Warranty customers complained about continuous annual charges and service fees even when they hadn’t used their plan or filed a claim.
How Do You Choose the Right Home Warranty Company?
- Assess your coverage needs: Consider which systems or appliances need coverage and their current condition. Newer items won’t need immediate servicing. However, older systems and appliances may require frequent maintenance and repairs. Our survey found that 81% of home warranty customers were satisfied with their plans, as the coverage provided adequate protection for their important home systems and appliances.
- Check online reviews: Review third-party sites such as Trustpilot for current and former customer reviews. Read positive and negative reviews and note significant issues, such as delayed servicing, denied claims, or hard-to-reach customer support teams. Check the Better Business Bureau (BBB) for each company’s rating and any alerts for deceptive business practices or lawsuits.
- Compare multiple providers: We recommend getting quotes from at least three providers before deciding. Compare coverage, policies, service call fees, premiums, and exclusions.
- Get recommendations: Consult with friends and family for home warranty provider recommendations. You could also ask your neighbors about their experience with their current provider.
- Read through sample contracts: Review any sample contracts and understand your inclusions, add-on options, and coverage policies. If you have any questions, contact the home warranty company and speak with a representative.
- Speak with a live representative: Although many companies offer online quote tools, speaking with a representative has advantages. When secretly shopping for providers, we learned that some companies offer exclusive plans and rates over the phone. While not every company offers them, speaking with a live representative is worthwhile to have all your questions answered immediately.
The Best Home Warranty Alternatives
While it’s true that certain home warranty companies engage in dishonest practices and exploit their customers, not all home warranties are corrupt or untrustworthy. Many home warranty companies offer comprehensive, affordable coverage, and 24/7 customer service, and initiate service requests within 24–48 hours of receiving a claim. Our survey results showed an overwhelming majority, 92.7% of policyholders, were satisfied or very satisfied with their home warranty plan.
Below are our top recommendations for reliable home warranty companies:
- American Home Shield: Best Comprehensive Coverage
- First American Home Warranty: Best for High-End Items
- Liberty Home Guard: Best Customer Support
- Select Home Warranty: Best Budget Plan Option
Reviews of the Best Home Warranty Companies
American Home Shield
We recommend American Home Shield (AHS) for homeowners seeking protection for their older homes, systems, or appliances. It’s one of the few providers that offers coverage for preexisting conditions and physical damage, which most companies in this review exclude.
How We Scored American Home Shield
We scored American Home Shield 4.4 out of 5 stars in our review standards. Here’s how we rated it in key categories.
- Coverage (4.7 out of 5): AHS scored high for its comprehensive coverage, even for damaged items.
- Value (4 out of 5): AHS lost points for its bundled plan pricing, which is slightly higher than other providers.
- Trustworthiness and Transparency (4.25 out of 5): AHS lost points for its lower customer review scores, which fall below a 3-star average.
- Availability and Service (4.7 out of 5): AHS earned a high score for its prompt claim process and 24/7 claims line.
Pros and Cons
Pros
- Includes roof-leak coverage with its highest plan
- Provides coverage for unknown preexisting conditions and damaged items
- Sets higher built-in system caps than other providers
Cons
- Charges slightly higher monthly pricing than other providers
- Doesn’t offer appliance-only coverage plans like many other providers
- Offers less coverage flexibility than most providers, with only six add-ons
Plans and Cost
American Home Shield offers three plans: ShieldSilver, ShieldGold, and ShieldPlatinum. After reading the American Home Shield sample contract, we discovered the company includes a $5,000 coverage cap for systems, one of the highest in this review. Its highest plan, ShieldPlatium, includes roof-leak coverage as part of its standard coverage. Many home warranty companies only offer this coverage as an add-on feature. The company also offers coverage for items with preexisting conditions and damage from rust, corrosion, and sediment.
Here are details on each of American Home Shield’s plans:
- ShieldSilver: This system-only plan includes major home systems, such as heating, cooling, and electrical.
- ShieldGold: The next plan covers major systems and appliances, such as garbage disposals, plumbing, and water heaters.
- ShieldPlatinum: The highest plan offers ShieldGold coverage and adds additional benefits, such as roof-leak repairs and HVAC tune-ups.
AHS charges slightly higher for its plans compared to other providers including LHG and Select Home Warranty. AHS’s online quote tool lets us toggle between service call fees of $100 or $125. We noticed that when we chose the higher service call fee, our monthly payment lowered and vice versa. Unlike LHG, AHS only offers monthly pricing for its plans.
| Plan | Monthly Cost | Service Fee | Coverage Cap |
| ShieldSilver | $29.99–$39.99 | $100–$125 | $5,000 |
| ShieldGold | $49.99–$59.99 | $100–$125 | Systems: $5,000Appliances: $2,000 |
| ShieldPlatinum | $79.99–$89.99 | $100–$125 | Systems: $5,000Appliances: $4,000 |
American Home Shield provides the least add-ons with only six options. Other providers in this review, such as First American Home Warranty and AFC Home Warranty, offer 12 or more options. You’ll pay $10.00 monthly to add roof-leak coverage to your ShieldSilver or ShieldGold plan. Additional add-on selections include the following items:
- Electronics protection plan
- Pools and built-in spa equipment
- Septic pumps
Our Experience With American Home Shield
One of our team members tested the AHS claims process and said he found it very efficient. He said he received a text and email confirmation immediately after submitting his online claim. Five minutes later, the service technician connected with him to schedule a next-day appointment. Our team member said the repairs took two hours, and he only paid the service call fee.
AHS customer reviews also praised the company for its quick claims turnaround time and courteous technicians. Other homeowners were disappointed with the high number of denied claims and the need for multiple technician visits to accomplish a single repair job.
First American Home Warranty
We recommend First American Home Warranty if you own high-end appliances due to its high appliance coverage caps. The company also offers a suite of add-ons plus a plan upgrade that covers miscellaneous fees home warranties typically don’t cover.
How We Scored First American Home Warranty
We scored First American Home Warranty 4.6 out of 5 stars in our review standards. Here’s how we rated it in key categories.
- Coverage (4.7 out of 5): First American scored well for its high appliance and unlimited systems coverage caps.
- Value (4 out of 5): First American lost points for its slightly higher service call fees.
- Trustworthiness and Transparency (4.8 out of 5): The company scored well for its excellent reputation and 3-star average customer reviews.
- Availability and Service (4.3 out of 5): First American lost points for its restrictive service technician policy.
Pros and Cons
Pros
- Covers preexisting conditions with First American Advantage upgrade
- Includes up to $7,000 appliance cap on its highest plan
- Provides unlimited coverage caps on most home systems
Cons
- Covers air conditioning only as an add-on in the Starter Plan
- Offers a smaller coverage area, with only 33 states included
- Omits some essential home system coverage from its basic plan
Plans and Cost
First American Home Warranty offers three plans: the Starter Plan, the Essential Plan, and the Premium Plan. We reviewed First American’s sample contract and noted that although most systems receive unlimited caps, water heaters max out at $1,000. First American is the only provider offering comprehensive plans, while other companies offer a mix of specialized and comprehensive protection.
Some essential home systems and appliances, such as air conditioners and clothes washers and dryers, don’t come with the Starter Plan’s basic coverage. Other providers in this review include these key systems in their standard plans. You can add central AC coverage as an add-on, but you must choose a higher plan for washer and dryer protection. You can also add the First American Upgrade to the Essential and Premium plans for added protection for preexisting conditions. It’s the only provider, besides AHS, that offers these protections.
Here are more details about First American’s plan coverage:
- Starter Plan: The lowest plan offers appliance and system coverage for some major items, such as built-in microwaves, heating systems, and refrigerators.
- Essential Plan: The next plan tier includes Starter Plan items, plus air conditioning, ceiling/attic/exhaust fans, and clothes washers and dryers.
- Premium Plan: The highest covers all items in the Essential Plan, plus luxury appliances, roof leaks, and window air conditioning units
First American plans are slightly higher, with pricing closer to American Home Shield. It offers $75, $100, or $125 service call fees for better pricing customization. Our sample quote included the highest service fee, which helped lower our plan costs.
| Plan | Monthly Cost | Service Fee | Coverage Cap |
| Starter Plan | $42.00–$57.00 | $75–$125 | Systems: UnlimitedAppliances: $3,500 |
| Essential Plan | $57.00–$67.00 | $75–$125 | Systems: Unlimited (Water heaters: $1,000)Appliances: $3,500 |
| Premium Plan | $67.00–$82.00 | $75–$125 | Systems: Remain the same Appliances: $7,000 |
First American includes 12 add-on options, including roof-leak protection for $8.33 per month, lower than some providers. Expect to pay $8.33 per month when adding roof-leak coverage for the Starter Plan and Essential Plan. You can add the First American upgrade to the Essential and Premium Plan at no charge.
First American offers the following add-on coverage:
- HVAC tune-ups
- Up to three additional refrigerators
- Up to two pools/spa equipment
Our Experience With First American Home Warranty
Our team member used First American to repair a broken garage door opener. He said the claim process took less than two minutes to complete online. After submitting his online claim on a Friday, he received a text with his technician’s information 30 minutes later. The technician contacted our team member to set a repair appointment for the following Monday. His repairs took less than 30 minutes, and he only paid the service call fee.
We also read online reviews to get a complete picture of the First American customer experience. Homeowners complemented the skilled technicians and less-than-24-hour claims processing. First American fell short with several homeowners concerning faulty repairs and low-quality replacement parts.
We recommend Liberty Home Guard for homeowners with specific coverage needs. The company offers item-specific and comprehensive coverage plans and over 40 add-ons, more than any other provider we reviewed.
How We Scored Liberty Home Guard
We scored Liberty Home Guard 4.5 out of 5 stars in our review standards. Here’s how LHG rated in key categories:
- Coverage (4.7 out of 5): LHG scored high for its extensive add-on catalog and plan coverage.
- Value (4.25 out of 5): LHG lost points for its unclear service fee policy and inflexible fee options.
- Trustworthiness and Transparency (4.8 out of 5): LHG scored high due to its A rating with Better Business Bureau (BBB) and excellent third-party customer review scores.
- Availability and Service (4.3 out of 5): LHG lost points for its inflexible service contractor policy.
Pros and Cons
Pros
- Extends a 60-day workmanship guarantee, double the industry standard
- Has live-chat customer service, a rare feature for providers
- Offers 42 unique optional add-ons, the highest of other reviewed providers
Cons
- Doesn’t provide lower plan rates with a higher service fee
- Lacks service call fee flexibility, which is common with other providers
- Offers some of the lowest electrical and plumbing caps in this review
Plans and Cost
Liberty Home Guard offers three service plan options: Appliance Guard, Systems Guard, and Total Home Guard. Most home warranty companies offer at least three plans to offer better variety. After reviewing the Liberty Home Guard sample contract, we discovered the company offers $2,000 caps for most appliances and systems, which falls within the industry standard. However, electrical and plumbing systems only receive $500, which is lower than other companies, except for Select Home Warranty. All covered repairs include a 60-day workmanship guarantee, double the 30-day industry standard.
We detailed LHG’s coverage plans below:
- Appliance Guard: This appliance-only plan covers nine major appliances, such as dishwashers, clothes washers, and dryers.
- Systems Guard: Its system-only plan includes six essential built-in systems, such as air conditioning, heating, ductwork, and water heaters.
- Total Home Guard: The highest plan tier combines the Appliance Guard and Systems Guard for comprehensive home coverage.
Liberty Home Guard offers midrange pricing for its monthly and annual plans. Unlike providers with flexible service call fees, LHG assigns a service call fee to your account based on your plan, add-on selections, and location. When we ran a sample quote for LHG, the expected service call fees were not mentioned during our sign-up process. According to the representative we spoke with, service fees range from $65–$125 and are revealed after completing the sign-up.
| Plan | Monthly Cost | Service Fee | Coverage Cap |
| Appliance Guard | $49.99 | $65–$125 | $2,000 |
| Systems Guard | $54.99 | $65–$125 | $2,000 (Plumbing & Electrical: $500) |
| Total Home Guard | $59.99 | $65–$125 | Coverage caps remain the same |
Liberty Home Guard offers 42 add-on options, including unique protection such as floor cleaning and generator coverage. Most providers only offer eight to 12 add-on options. The company offers midrange pricing, ranging from $3.00 to $35.99 per month. Popular coverage options include the following items:
- Limited roof-leak protection
- Professional series appliances
- Window washing/cleaning
Our Experience With Liberty Home Guard
When we called for a sample quote, we connected with an LHG representative in under 30 seconds. The online chat feature works quickly, but we were initially connected to an automated bot. We had to ask to speak to an agent twice before being connected to a real person. We also learned that LHG will send one of its in-network service technicians to repair your appliances. The company will let you select your own if no technicians are in your area.
Reviewing hundreds of LHG customer reviews shed light on the fact that many customers appreciated the efficient claims process and helpful staff. However, negative reviews pointed out the company’s “hidden” depreciated value clause and lower-than-expected payouts. We recommend reviewing sample contracts thoroughly to understand a company’s exclusions and policy details.
We recommend Select Home Warranty for budget-conscious homeowners looking for baseline home warranty protections. The company offers plans priced below $50 per month and free roof-leak coverage.
How We Scored Select Home Warranty
We scored Select Home Warranty 4.3 out of 5 stars in our review standards. Here’s how we rated it in key categories.
- Coverage (3.7 out of 5): Select rated low for its coverage caps, which fall well below the industry standard.
- Value (5.5 out of 5): Select earned a perfect score for its affordable plan pricing.
- Trustworthiness and Transparency (4.5 out of 5): We deducted points for its low review scores across multiple third-party review sites.
- Availability and Service (4.3 out of 5): Select scored lower in this category for its longer claims processing time frame.
Pros and Cons
Pros
- Includes a $3,000 HVAC system coverage cap
- Offers affordable plans priced below $50 per month
- Provides free roof-leak coverage with all plans
Cons
- Charges multiple service fees even if there are multiple claims at the same time
- Doesn’t offer flexible service call fees like other providers
- Offers lower coverage caps than many competitors
Plans and Cost
Select Home Warranty offers three plan options: Bronze Care, Gold Care, and Platinum Care. Select stands out by offering roof-leak repair coverage in each protection plan. We also noted in Select Home Warranty’s sample contract that the company offers a generous $3,000 cap for HVAC systems but only $500 for all other items. These caps fall well below other reviewed companies, including AHS and AFC Home Warranty, and the industry standard.
Here are more details about Select Home Warranty’s plans:
- Bronze Care: The lowest plan covers major appliances only, such as clothes washers and dryers, garbage disposals, refrigerators, and cooktops.
- Gold Care: This plan covers six major home systems, such as air conditioning, heating, plumbing, electrical systems, water heaters, and ductwork.
- Platinum Care: Its highest plan covers all the appliances and built-in systems in the Bronze and Gold Care plans, plus garage door openers, plumbing stoppages, and ceiling fans.
Select offers low-cost pricing for annual and monthly plans. The company charges a $60–$75 service call fee per claim, less than other providers such as AHS. However, similar to LHG, you cannot choose your service call fee. We discovered via secret shopping that Select offers its lower service call fee as an over-the-phone deal only.
| Plan | Monthly Cost | Service Fee | Coverage Cap |
| Bronze Care | $44.42 | $60–$75 | $500 |
| Gold Care | $44.42 | $60–$75 | $500 (HVAC: $3,000) |
| Platinum Care | $47.75 | $60–$75 | Coverage caps remain the same |
Select offers nine add-on options priced $9 and lower, well below most competitors. For example, you can add pool coverage for $8.33 per month versus $20 or more with other providers. However, coverage caps are lower than other providers, offering only $400 of protection. Select add-on coverage options include the below items:
- Central vacuums
- Septic pumps
- Stand-alone freezers
Our Experience With Select Home Warranty
When we spoke with Select customer service representatives, we learned that the company prefers resolving plan issues and processing claims over the phone. We also discovered that Select will assign a service technician from its network of contractors. If no technicians are in your area, the company will let you choose your own. However, the company must approve the choice before the repair process begins.
Reading online reviews told us that homeowners appreciated Select’s user-friendly claims process and helpful sales staff. Unfortunately, several customers noted poor customer service, including long wait times and frequent denied claims.
Our Conclusion on the Worst Home Warranty Companies
Homeowners should conduct thorough research to avoid shady and untrustworthy home warranty companies. Check for warning signs of deceptive practices, fraudulent behavior, or poor servicing. We recommend pulling quotes from our recommended home warranty companies and comparing policies. Choose a home warranty policy that offers the best value at the right price.
FAQs About Home Warranty Companies
Which home warranty is the best?
The best home warranty for you depends on your budget, location, and your plan’s covered appliances and systems. We recommend American Home Shield for most homeowners due to its comprehensive coverage options and extensive industry experience.
Are home warranties worth the money?
Yes, home warranties are worth the money since they help you save on costly repairs and replacements. You could pay less in home warranty costs compared to thousands of dollars for a new cooling system, sewer line, or water heater.
Is a home warranty the same as homeowners insurance?
Though similar, a home warranty and homeowners insurance are different. A home warranty protects major appliances and systems in your home, like HVAC systems and your dishwasher, when they break down due to normal wear and tear. Homeowners insurance protects your home when it suffers damage from natural disasters, fire, or theft.
What is a service call fee?
A service call fee is the deductible a home warranty provider charges you when you file a new claim. All providers require you to pay the service call fee before any repairs are made. Various providers, such as American Home Shield, provide different service call fee options to help lower your monthly cost; for these providers, you can choose a higher service call fee to get a lower monthly premium
Do home warranty companies provide a guarantee for completed repairs?
All reputable home warranty companies offer a workmanship guarantee for completed repairs. That means a provider will fix a new breakdown that occurred to a previously repaired item within its workmanship guarantee time period. The industry standard is 30 days. There are several home warranty companies, however, that offer a longer workmanship guarantee.
