A home warranty can help protect your home and prevent you from paying expensive repair bills for broken systems or appliances. Unfortunately, not every home warranty policy is reliable. Keep reading to learn how to avoid a home warranty scam and find the right policy for you and your home.
While there are plenty of reputable home warranty companies in the industry, some companies 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 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 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 For example, some homeowners have claimed that their home warranty company refused to replace an old, outdated appliance, instead applying a quick fix that would inevitably lead to another breakdown.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 weeks to schedule a repair. The delay 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 reimburse completed repair fees. Some homeowners have complained that their home warranty company failed to reimburse them or took too long to issue a reimbursement after submitting 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 and had their policies renewed without consent. Another common complaint is their home warranty provider billed an undisclosed cancellation fee.
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 of thousands of dollars. The former owners of Secure Home Warranty, Elliot Ashkenazie and Alan Maleh, are under investigation by the Pennsylvania Attorney General’s Office for consumer fraud and violations against seniors.
Let’s look at some of the most common complaints against Secure Home Warranty.
- Unexpected fees—Secure Home Warranty customers complained Secure 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 filing 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 2018 when Service America abruptly closed its doors.
Let’s take a look at some of the most common complaints former policyholders had regarding 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 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, it offered no refunds 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 for 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. They claimed American Home Guard didn’t cover their repairs.
- 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 in 2018. Negative reviews flooded the company’s Better Business Bureau (BBB) page claiming that the company didn’t offer any refund to its customers 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. Many 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.
- Liberty Home Guard: Best Customer Ratings
- American Home Shield: Best Coverage Caps
- First American Home Warranty: Best Appliance Coverage
- Select Home Warranty: Best Value
Liberty Home Guard
Liberty Home Guard (LHG) is our top pick for homeowners due to its 60-day workmanship guarantee on completed repairs, which is double the industry standard of 30 days. LHG also offers great coverage customizability with more than 30 unique add-on coverage options.
Compare the advantages and disadvantages of Liberty Home Guard below:
Pros and Cons of Liberty Home Guard
LHG offers three plans for your home protection needs: the Appliance Guard, Systems Guard, and Total Home Guard. The Appliance Guard protects your home’s major appliances, the Systems Guard protects home systems, and the Total Home Guard combines appliance and systems coverage into one comprehensive plan.
LHG plans range from $49 to $60 per month. Its service call fee range of $65 to $125 per filed claim is assigned based on your home’s size, location, and type and your plan selection.
American Home Shield
Another solid 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. On top of comprehensive coverage, American Home Shield offers plan flexibility via three plan and service call fee options.
Here are the pros and cons of choosing American Home Shield for your home warranty policy.
Pros and Cons of American Home Shield
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 below ShieldPlatinum and 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.
You can expect to pay $29–$80 per month for an American Home Shield plan. American Home Shield also requires a per-incident trade call service fee. The service call fee options are $75, $100, and $125 per service visit. The higher fee you choose, the less you’ll pay each month for your plan and vice versa.
First American Home Warranty
First American Home Warranty is our final recommendation. 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
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 and $52 a month, with a service fee of $85 per claim.
Select Home Warranty
Select Home Warranty offers home coverage plans at an affordable price point. Its plans include roof-leak repair protection in every plan, plus it provides generous coverage caps for HVAC systems.
Below are Select Home Warranty’s pros and cons for you to compare:
Pros and Cons of Select Home Warranty
Select Home Warranty provides three plans: the Bronze Care, Gold Care, and Platinum Care plans. Its Bronze Care covers eight home appliances, such as ovens and clothes dryers. Its Gold Care covers six major systems, such as water heaters and ductwork. Its Platinum Care is its most comprehensive plan; it covers all 14 systems and appliances in the other two plans.
Select Home Warranty plans cost between $44 and $48 per month with its standard $75 service call fee.
Frequently Asked Questions
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 firstname.lastname@example.org.