The Worst Home Warranty Companies

By Deanna Kane | Advertiser Disclosure

While most home warranty companies are reputable and do right by their customers, providing comprehensive coverage at affordable prices, there are some that take advantage of unknowing consumers. Keep reading to learn how to avoid the worst home warranty companies on the market and how to find the best home warranty for your major systems and appliances.

No time to read our full review? Ultimately, we recommend Choice Home Warranty for homeowners who want protection for their key systems and appliances. Choice offers multiple flexible plans that start at affordable monthly premiums. Give them all call today at 929-400-6164 or fill out this easy online form.

How to avoid the worst home warranty companies 

Here are several home warranty companies that have scammed customers and are no longer in business:

  • Service America Home Warranty (closed in 2019)
  • Endurance Home Warranty (closed in 2019)
  • Allied Home Warranty (closed in 2018)
  • 365 Home Warranty (closed in 2018)
  • American Home Guard (closed in 2018)
  • Secure Home Warranty (closed in 2017)

In general, if a home warranty company has any of the following traits, it may not be the best option for you and your home:

  • Aggressive marketing strategies—If a home warranty company is bombarding you with phone calls and emails after you’ve made it clear that you’re not interested in renewing a plan, you may want to stay away.
  • Frequent claim denials—The majority of Better Business Bureau (BBB) complaints and poor customer reviews are the result of denied claims for items customers thought were covered. To prevent mishaps during the claims process, read the fine print of your contract before opting into coverage to fully understand what’s covered.
  • Delays in repairs or replacements—After filing a service request, it should take anywhere from 24-48 hours to hear back from your home warranty company. If you’re waiting weeks for a necessary repair or replacement, consider switching to another provider.
  • Hidden costs—Some home warranty companies will charge customers for multiple service requests on the same broken appliance or system or charge a cancellation fee if the customer chooses to cancel their contract. Read your terms and conditions to avoid paying unexpected costs.
  • Few years of experience—A good rule of thumb is to avoid companies that have only been in business for a few years. The most reputable companies have been in business for several decades, have built a reputation with customers, have a transparent claims process, and provide 24/7 customer service.

How to avoid a home warranty scam

To avoid a home warranty company that scams their customers, follow these tips:

  • Review third-party customer reviews and BBB ratings online.
  • Ask for a sample contract or get a free quote before entering into warranty coverage.
  • Review the terms and conditions of your service contract to ensure you understand coverage limitations.
  • Avoid companies with aggressive sales tactics.
  • Check with your state’s Department of Insurance or Attorney General’s office to find out if any complaints have been filed with the home warranty company you’re considering.

Is a home warranty worth it?

A home warranty can provide peace of mind and protect you from paying for unexpected and expensive repairs on home appliances and systems. Not only can a home warranty save you money on home repairs and replacements, it takes away the hassle of finding a trusted service contractor to complete the repairs for you.

Buying a home warranty may be a smart purchase for those on fixed incomes, those who don’t have home repairs factored into their monthly budget, landlords who own rental properties, first-time home buyers, or home sellers who can transfer their pre-existing warranty to a potential buyer.

How to find the best home warranty company

When searching for a home warranty company, consider these factors:

  • Customer experience—An ideal home warranty company will offer 24/7 customer support services online or through a specific phone number.
  • Transparency—Top-rated home warranty companies are transparent about covered items, coverage limits and exclusions, and pricing. Not to mention, most will offer a workmanship guarantee to ensure that you won’t have to pay for repeat repairs or replacements.
  • Plan options—Leading home warranty companies offer several flexible plans to allow policyholders to select the systems and appliances they want protected.
  • Claims process—Most home warranty companies have a straightforward claims process, with reasonable service fees and fast turnaround times.
  • Additional benefits—The best home warranty companies offer customers additional perks, such as the ability to add on extra services, one month free for signing up, a no-fault protection plan, or even no service fees, among other benefits.

You may also want to keep these helpful questions in mind before you purchase a home warranty:

  • Are my appliances and systems already covered? New appliances are often covered under a manufacturer’s warranty and don’t necessarily need to be protected under a home warranty. However, once the manufacturer’s warranty expires, it’s a good idea to have extended coverage through a home protection plan.
  • What type of coverage do I need? Most home warranty companies offer different levels of plans, ranging from appliances- and systems-only to a combination plan that protects both systems and appliances.
  • What exactly is covered under my contract? Understanding what is and isn’t covered can help you avoid any potential misunderstandings when filing a claim. Reading the specifics in your terms and conditions can help clarify any questions.
  • Will my home warranty plan replace broken items? Most home warranty companies will replace a broken item instead of repairing it if the repairs are too costly. Understand the replacement policy, so you don’t end up with a warranty that only covers the depreciated value of the broken item.
  • How can I cancel service? The cancellation process should be straightforward and simple. Many home warranty companies require a written notice 30 days in advance of cancelling.

Our top-rated home warranty alternatives

Now that you know how to avoid a home warranty scam, consider several of the best home warranty companies available below.

  • Offers four comprehensive plans plus optional add-ons
  • Has more than 45 years of experience in the home warranty industry
  • Has a network of more than 15,000 contractors and can request service 24 hours a day

  • Provides two home warranty plans plus optional add-ons
  • Offers after-hours service
  • Has a guaranteed response time within 48 hours of receiving a claim

  • Offers three levels of plans to accommodate different budgets
  • Provides free roof leak coverage in every plan
  • Gives customers two months of coverage for free when they sign up for a plan

  • Provides four different plan levels to choose from
  • Offers unique benefits, like family protection packages with Emergency Alert Network and credit monitoring
  • Provides a lifetime work guarantee for labor and parts

  • Offers two comprehensive coverage plans
  • Provides coverage on items regardless of age, make, or model
  • Has high coverage caps on major systems and appliances

Frequently asked questions about home warranties

What does a home warranty cover?

A home warranty plan covers appliances like washers, dryers, refrigerators, and garage door openers, and home systems like your air conditioning, heating, water heater, plumbing, and electrical.

How much does a home warranty cost?

On average, a home warranty costs around $300-$600 per year, with basic coverage falling on the low end of that spectrum. In addition to paying a premium, customers will also have to pay a service call fee any time they file a claim. Most service call fees cost $75-$125.

How is a home warranty different from homeowners insurance?

A home warranty, also known as home appliance insurance, is different from a home insurance policy in that it covers systems and appliances that break down from normal wear and tear. Homeowners insurance covers any structural damage to your home from natural disasters, fire, theft, or other uncontrollable events.

More Like This

Home Warranty

7 Best Home Warranty Companies of 2021

Looking for the best home warranty? Our team at House Method reviewed the top home warranty companies in the industry so you can choose the right plan for your home.

Home Warranty

American Home Shield vs. Choice Home Warranty

American Home Shield and Choice Home Warranty are two of the most well-known and consumer friendly home warranty companies. Read our comparison to find out what differentiates them.

Home Warranty

What Is a Home Warranty?

A home warranty is a service contract that covers the cost to repair or replace certain appliances and systems. Find out how much money you can save every year with a home warranty as well as how to choose the right home protection plan for you.

By continuing to browse or by clicking “OK” you agree to the storing of first- and third-party cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. Privacy Policy.