Home Warranty Review and Rating Methodology

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How We Rate and Review Home Warranty Companies

House Method’s overarching goal is to conduct in-depth and unbiased evaluations of reputable home services companies for each of our provider reviews. From there, we work to transform those findings into an accessible and empowering resource for homeowners, renters, landlords, real estate professionals, and other readers alike.

At the helm of our research process is a rating system used to assign any featured provider a numerical grade based on how it scores within five core categories. Within these broader categories are 39 more granular features that we look for when assessing each home warranty company. All supporting information used by our in-house research team is pulled from factually accurate public data sources, verified policyholder testimonials, and an anonymous homeowner experience survey. 

Here is an overview of our overall composite rating system and what each level, from zero to five stars, indicates:

★★★★★ Outstanding 

★★★★☆ Excellent

★★★☆☆ Average

★★☆☆☆ Below Average

★☆☆☆☆ Poor

Core Categories of the Home Warranty Rating System

To identify the most important traits of a home warranty policy according to prospective customers, House Method’s research team issued an interactive online survey that drew 1,004 responses from homeowners nationwide. With that data, we pinpointed the following five categories as baseline criteria for any home warranty that we choose to review. 

Our rating system is itemized to fully reflect the hierarchy of the responses we received within each category. The bulleted policy details beneath them are displayed in the exact order of what participants prioritized. 

Coverage 

• Waiting period length — a set time window before your home warranty benefits are active. Most waiting periods begin on the day you sign up for your policy. 
• Claim response time —  the turnaround time between claim submission and an approval or denial of the case from a home warranty company.
• Annual payout maximum — the maximum dollar amount a service provider will cover per item per contract period. 
• State availability
• The number of claim filing channels — whether claims can be filed over the phone, online, via mail, fax, etc. 
• Convenience and ease of claim filing — reasonable claim turnaround times, customer service accessibility, and the likelihood of claim denials
• Plans for real estate professionals 
• Plans for home sellers
• Plans for home buyers
• Plans for renters and rental properties
• The number of items in the most basic plan offered
• Number of items covered in the most premium plan offered 

Cost

• Average annual cost 
• Average monthly cost 
• Service fees — the out-of-pocket deductible due to a technician at each initial home visit for an approved service request

Transparency and Trustworthiness

• Pricing available on website 
• Sample contracts available 
• Contract exclusion information available
• Dispute resolution information available 
• Previously faced or currently pending civil lawsuits 
• Years in business 

Customer Support

• Number of customer support channels available 
• The convenience of customer supper channels 
• Number of Trustpilot online reviews 
• Nature of Trustpilot reviews (star rating)
• Number of online BBB customer reviews 
• Nature of BBB reviews (star rating)
• BBB rating & accreditation

Customization

• Contract length 
• Number of optional add-ons 
• Number of home warranty policy options 
• Nature of plan options 
• Technician selection 
• Cancellation policy 
• Home inspection prerequisite 
• Transferrable policies 
• Discounts available for military, seniors, etc.
• Service fee flexibilities 

How Our Rating System Helps Homeowners

Our rating system intends to provide homeowners with insight into the anatomy of a home warranty policy — and to leave no stone unturned while doing so. Still, research on the customer’s end is vital to ensure that you’re paying for a policy that can provide you with the coverage you need for the foreseeable future. We use our expertise in the home warranty space to highlight the most important information for owners, so you have access to quality information without the homework.

How We Created this Home Warranty Rating System

To ensure our analysis was as comprehensive as possible, we gathered data on 63 home warranty companies, only selecting providers with transparent information available on their main websites or within sample contracts for at least 90% of the 39 policy benchmarks listed above. To call out any gaps between a company’s advertisements and whether it sees its service promises through, we also conducted first-hand customer experience research by reaching out to customer service representatives directly for further clarification on contract terms. 

Aside from our survey, all other supporting statistics used to assess the relationship between homeowners and the home warranty space were sourced from official market research and homeownership reports published by IBISWorld, the U.S. Census Bureau, the National Association of Realtors®, and more.  

Real Homeowners Influence Our Rating System

So that we can best align our content to the needs of our readers, we mobilized a public survey focused on the home warranty experience from the consumer standpoint. The survey sought to identify the specific factors that homeowners felt were most important when considering a home warranty for their own homes. 

Homeowners were first asked to identify themselves based on whether or not they:

1. Know what a home warranty is  —  882 respondents (87.8%)
2. Don’t know what a home warranty is — 78 respondents (7.8%)
3. Might know what a home warranty is — 44 respondents (4.4%)

They were then grouped into four identifying groups based on their experience with home warranties and whether or not they:

1. Actively have home warranty coverage — 172 respondents (17.1%)
2. Have had home warranty coverage in the past — 228 respondents  (22.7%)
3. Are potentially interested in home warranty coverage — 165 respondents  (16.4%)
4. Have considered home warranty coverage in the past — 171 respondents (17%)
5. Have no home warranty experience and are not interested in coverage — 268 respondents (26.7%)

The rest of the questionnaire prompted respondents to rank both the five core categories of a home warranty and the 39 subcategories in order of importance to them as homeowners. 

Scoring and Weighing Each Feature Within the Five Categories

Using both the data collected through our survey and our own expertise in the home warranty category, we score every home warranty provider reviewed on House Method based on the extent of their coverage, cost, transparency and trustworthiness, customer support, and plan customization options. 

Our raw ratings for these five categories are converted into a score value using a custom five-point scale with a point index ranging from 0.00 to 1.00. Naturally, 0.0 is the minimum awardable value, whereas 1.00 is the maximum. These numeric points are then translated into star ratings, using whole star increments between one and five. 

Below is a summary of the weighting scheme per category and sub-category used by our research team when scoring each home warranty provider:

Weighing the Five Categories

Coverage: 40%

• Waiting period length (5.5%)
• Claim response time (6.5%)
• Annual payout maximum (3.5%)
• State availability (1%)
• Number of claim filing channels (2%)
• Convenience and ease of claim filing (4.5%)
• Plans for realtors and real estate agents (.25%)
• Plans for home sellers (.25%)
• Plans for home buyers (.25%)
• Plans for renters and rental properties (.25%)
• Number of items covered in the most basic plan offered (8%)
• Number of items covered in the most premium plan offered (8%)

Cost: 30%

• Average annual cost (10.5%)
• Average monthly cost (10.5%)
• Service fees (9%)

Transparency and Trustworthiness: 15%

• Pricing available on website (5.5%)
• Sample contracts available (2.5%)
• Contract exclusion information available (1%)
• Dispute resolution information available (.50%)
• Previously faced or currently pending civil lawsuits (4%)
• Years in business (1.5%)

Customer Support: 9%

• Number of customer support channels available (2.25%)
• Convenience of customer supper channels (3%)
• Number of Trustpilot online reviews (1%)
• Nature of Trustpilot star-rating reviews (.75%)
• Number of online BBB customer reviews (1%)
• Nature of BBB reviews (.75%)
• BBB rating & accreditation (.25%)

Customization: 6%

• Contract Length (.58%)
• Number of optional add-ons (.77%)
• Number of home warranty policy options (.95%)
• Nature of plan options 
• Technician selection (1.1%)
• Cancellation policy (.46%)
• Home inspection prerequisite (.87%)
• Transferrable policies (.67%)
• Discounts available for military, seniors, etc. (.25%)
• Service fee flexibilities (.35%)

Home Warranty Coverage

This category evaluates the scope of protection offered by a home warranty company. Given that 53.9% of our survey respondents marked coverage as the most important attribute of a home warranty policy, we positioned it to represent 40% of our collective rating system.  

Coverage needs vary from homeowner to homeowner, but creating a clear distinction between limited or broad coverage objectives is critical to helping homeowners identify their own home protection needs. 

To judge the breadth of coverage offered by a company, we factored in average waiting periods, claim turnaround times, annual coverage limits, policy inclusion, and exclusions, and plan types available, among other features indicating clear access to comprehensive coverage.

Annual Payout Limits

An annual payout limit is the maximum amount a home warranty company will pay for claims during a standard 12-month contract period. Every home warranty provider has coverage limits, but those limits vary widely between companies. Across the carriers we researched, standard coverage maximums tended to fall between $1,000 and $10,000 per year, with an average limit of $3,072.22. 

Most providers instate their coverage caps on an annual per-item basis, meaning that customers are guaranteed a specified allowance for the repair or replacement of each system or appliance included in their policy. This fixed dollar amount is reset at the start of each new policy period once the contract is renewed after one calendar year. 

Providers with more generous coverage caps received higher scores in our reviews simply because larger limits are more effective at keeping out-of-pocket costs low for homeowners. 

Convenience of Filing Claims and Channel Availability

Claiming filing channels refer to how customers can open a service request for a system or appliance failure within their home. Across the home warranty category, providers tend to offer as few as one claims filing channel and as many as five, with the industry average being around two. 

Most companies allow policyholders to file a claim over the phone or through a designated customer portal. Some, however, also offer more traditional options like fax, e-mail, and standard mail submission. 

For companies that primarily utilize online and over-the-phone claims processing, we considered overall usability, specifically related to general site navigation, customer support wait times, ease of service request submissions, and history of claim denials. 

Systems and Appliances Covered in the Plan

In our survey, 150 homeowners ranked “the total number of items covered in a plan” as the most important feature to them above all other coverage subcategories. A diverse array of inclusions tend to be especially important to customers who aren’t yet sure of the level of coverage they need. Choosing a comprehensive option from the get-go guarantees that their bases are covered, and then from there, they can begin to slim down the scope of their plan if need be. 

When researching the range of items typically covered under one plan per provider, we found that the average home warranty company covers five items in its most basic plan option and 12 under its premium policy. 

Across all 63 providers considered, the number of inclusions offered at the basic level ranged between 13.8 and 27. At the premium level, 22.1 was the lowest item number we found, and 35 was the highest. 

The home warranty companies that scored highest in this subcategory already offered comprehensive coverage in their most basic option, with an even longer list of inclusions for customers who opt for a premium policy. 

Claim Response Time and Waiting Period

While home warranty coverage does provide expedited maintenance for covered breakdowns, there are still a few time-specific parameters to be aware of. 

A waiting period is the time between the day you sign-up for your policy and the effective start date of your coverage benefits. Most home warranty providers instate an initial waiting period of 30 days, though we found a handful that will grant coverage just ten days after sign-up. Some companies will occasionally waive the waiting period altogether for homeowners who receive their home warranty as part of a real estate contract.

A company’s claim response time refers to the time between when a claim was submitted and when a final decision is reciprocated by the provider, either approving or denying coverage for said issue. Because prompt response times give home warranty companies a competitive advantage, most aim to have a decision back to the customer within 24 to 48 business hours. The industry average is approximately 42.7 hours post-claim submission. 

Cost of Home Warranty

Accounting for 30% of our rating system, this category evaluates what a home warranty charges homeowners on a monthly, annual, and out-of-pocket basis. Based on our survey results, 221 respondents, or 33% of participating homeowners, selected cost as the most important category out of the five. 

Cost follows closely behind the coverage category in our rating framework because the two are somewhat interrelated. We urge our readers to always consider cost relative to coverage when shopping for a home warranty, as a low-cost policy is often a sign of narrower coverage.

Annual and Monthly Payments

Home warranty premiums are most commonly paid monthly, but providers also typically offer annual and even multi-year payment options for those looking to make a longer-term commitment. 

Monthly and annual rates for home warranty coverage are not the same across the board and can differ significantly between providers. Our provider analyses saw monthly premiums as low as $36 and as high as $78, averaging around $51.61. One-time payments for annual coverage spanned $433 and $869, which punched out to an average of $601.86 per year. 

Out of the 63 providers we reviewed, 15 landed within $5 or less of the average monthly, and five fell within $10 of the average annual cost. In terms of scoring, companies with more affordable rates generally scored better than those with higher-than-average premiums.

While more expensive policies could be priced higher simply because they offer premier coverage options, for homeowners on a budget, a pricey home warranty contradicts the point of investing in a policy as a money-saving tool in the first place.

Service Fees

All home warranty companies require policyholders to pay a service call fee which is an out-of-pocket payment due each time a technician is dispatched to the home for a new service request. This deductible is used to compensate the contractor for labor costs and any other expenses incurred while commuting to the property.

Service call fees can range from $0 to $100, but the average rate sits around $76.55. Some providers charge a preset, non-adjustable fee, while others allow customers to choose their amount due from three or more different options. Customizable service fees can give homeowners more control over their main premium. The higher the service fee they select, the lower their monthly/annual payment will be, and vice versa. 

We awarded more points to home warranty companies with customizable service fee options than those with fixed fees. Unlike our scoring approach for monthly/annual premiums, we didn’t base our ratings for service call fees on price to ensure that we aren’t inadvertently praising companies that might not be paying their in-network contractors fairly. 

Transparency and Trust

This category evaluates how forthright the 63 home warranty companies we reviewed are about their contract details, pricing, potentially hidden fees, exclusions, legal action, etc. 

Out of 736 total responses from U.S. homeowners, 13% ranked transparency and trust as the most important factor in a home warranty plan. This category accounts for 15% of our total rating system and sits in third place in terms of homeowner priority. 

Unfortunately, the home warranty industry has had its fair share of fraudulent companies posing as legitimate service providers only to scam unsuspecting customers out of their money. Though these scams are far and few between, how upfront a company is about its own product says a lot about the provider. 

Pricing, Exclusions, and Sample Contract Availability

No matter what the product is, consumers tend to value self-reported data from a company more because it has more accountability attached to it than information provided by a third-party resource. The most in-depth information on a home warranty company’s services is most often consolidated in its sample contract. 

While grading transparency, we started at each home warranty company’s main website. Companies with straightforward descriptions of their coverage benefits and other pertinent information garnered higher scores. All but one of the companies we reviewed included clear breakdowns of policy prices on their websites. 

We consider it a red flag when a company isn’t upfront about its exclusions, coverage limits, and claim decision dispute processes. Therefore, any providers without a free sample contract available and any companies that had the related information available but made it difficult to access were penalized. 84% of the home warranty companies did, however, score positively in this section.

When available, dispute resolution information can usually be found in the fine print of a service provider’s contract terms. We deemed the opportunity to dispute a claim decision as an essential detail to include in our rating system as it levels the playing field between the provider and the policyholder. Only 12.6% of companies featured in our provider reviews failed to have a written overview of their dispute resolution approach. All homeowners reserve the right to appeal a claim for an unjustified claims decision, so long as you haven’t agreed to waive that right in your contract.  

Pending or Previous Civil Lawsuits

Choice Home Warranty is currently part of a class-action lawsuit filed by the Arizona Attorney General’s Office in 2019. The complaint alleges that Choice repeatedly made baseless claim denials to avoid paying for promised repairs after collecting millions of dollars from Arizona homeowners.

Choice was also taken to court in Oklahoma in 2020 for selling home warranties to residents in Oklahoma, where it was unlicensed to operate. Our research team reached out to Choice for further comments on this matter but has yet to hear back. 

These two legal entanglements may have sparked change within the company since the initial complaints were made as 90% of 1.1 million claims have been approved by Choice since 2021.

Years in Business

The age of a company is a strong indicator of financial strength and ethical business practices, especially in the home warranty industry. Among the companies we’ve reviewed thus far, the home warranty market share is fairly evenly split between veteran and newer providers. Yet only seven out of the dozen we evaluated are less than a decade old. 

Abrupt shutdowns after only a few years of business are a common bad-faith tactic used by home warranty scams. In past instances, customers were left with unhonored claims, unpaid refunds, and no means of contact with the company. 

All home warranty companies reviewed on House Method have been vetted as legitimate through the Better Business Bureau (BBB). But, suppose you’re considering a company that we haven’t yet reviewed. In that case, we highly recommend only signing if the provider has been in business for at least four years, which is the current industry average. 

Customer Support and Satisfaction

This category evaluates the efficacy of a home warranty company’s effort to provide supportive guidance to inquiring customers and the rate at which policyholders are satisfied with the assistance they received. 

Based on our survey data, 15 out of 736 participating homeowners ranked customer support and overall satisfaction as the most important feature of the home warranty experience. We positioned this category in fourth place in our rating system, accounting for 9% of our rating system. 

Before deciding on a final provider, getting insight into the experiences of current policyholders through verified testimonials and complaint histories is the best way to predict what your future customer experience will look like. 

Engaging with customer support channels before signing up with a company is another way to test a company’s genuine commitment to hassle-free customer service. Don’t hesitate to call any provider that piques your interest with questions you might have. Make a note of how quickly you’re connected with a live representative, how proactive the representative is, and whether or not you walk away from the interaction with a tangible solution. 

Online Customer Reviews and Ratings

We’ve scoured reputable customer feedback platforms like the Better Business Bureau and TrustPilot and awarded more points to companies with higher volumes of 3.0 to 5.0-star ratings than those with review trends between 1.0 and 3.0 stars. 

BBB accreditation is something we largely depend on to gauge the integrity and overall credibility of any provider we review. It considers 16 criteria points as defined by the Better Business Bureau, some of which include honest representation of services, prompt complaint resolutions, a positive reputation in the marketplace, etc. 

The home warranty providers we’ve reviewed have BBB accreditations ranging from A+ to C-. These companies also differ significantly in the number of total customer reviews they’ve amassed during their industry tenures. Review numbers via Trustpilot ranged as broadly as 0 to 25,925 testimonials, averaging 1,579.1 reviews. 

The BBB also has its own five-point star rating system to grade companies under the same criteria used for its accreditation approach. With the highest being 4.7 stars and the lowest being 1.0, the 63 companies we evaluated received an average star rating of 2.6 stars. 

Customer Support Channels

Customer service is usually the primary point of contact for customers needing to communicate with their provider. Within the customer support category of our survey, 60 percent of respondents marked accessible and hassle-free customer care as a priority for them as home warranty policyholders. 

Leading home warranty companies usually offer omnichannel customer support through online customer portals and over-the-phone helplines. On average, most home warranty providers have approximately 2.5 customer support channels accessible to their users. 

Customizations

This category evaluates the latitude that a home warranty company offers for policyholders to adjust the details of their plan and premium to best accommodate their budget and coverage objectives. 

Just as no home warranty policy is created equal, neither are the needs of all homeowners. Specific to the customization section of our survey, 21% of respondents agreed the ability to personalize their plan was crucial to them. Yet, because only 1% of respondents prioritized customization over cost, coverage, transparency, and customer service, it accounts for the last 6% of our rating system.

Ability to Select a Technician 

One of the perks of a home warranty is that providers save their policyholders time by overseeing the clerical details of a repair or replacement, primarily recruiting and scheduling a qualified technician. Because instant access to a licensed team of service professionals is considered a part of the benefits offered by a policy, most home warranty providers won’t allow customers to hire a contractor of their own. Only ten out of the 63 companies we reviewed, or roughly 15%, will cover repairs performed by technicians outside of its network. 

Cancellation, Transferability, and Inspection Requirements

In unique instances where a homeowner might need to terminate their coverage mid-contract period or perhaps have decided to sell their home and need to transfer their coverage to the next homeowner, a few fees may be involved. 98% of the companies we reviewed charge a cancellation fee for policyholders who opt to break their contract after the first three months of coverage. 

Though policy specifics always vary from provider to provider, the vast majority of home warranty companies offer transferable contracts. All providers featured on House Method offer transferable coverage, though some may instate a transfer fee.

In terms of inspection requirements, only a few providers require an initial home inspection to record pre-existing conditions before the effective date of a customer’s coverage. We found that only 2% of the companies we’ve reviewed require a home inspection, but 83% require customers to provide prior maintenance records when filing a claim. 

Where this Methodology Comes into Play

Though this review methodology has been specifically curated for our home warranty category, the same research principles and commitment to homeowner advocacy expressed above are preserved across all content published on House Method. 

This methodology and the rating system that upholds it serves as a backbone for the content that we create. In an effort to prioritize transparency and editorial integrity above all else, we’re proud to share the formula we use to make calculated and proven assessments for all companies and product features on the site with our readers.

By using our content to break down everything there is to know about home warranties into actionable steps, we aim to ultimately help our readers navigate homeownership with confidence. This methodology is simply where that confidence first takes shape. 

To see this methodology in action, read about the best home warranty companies in the nation.

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