The Worst Home Warranty Companies

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. 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.

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 (closed in 2019)
• Endurance Home Warranty (closed in 2018)
• Allied Home Warranty (closed in 2018)
• American Home Guard (closed in 2018)
• Secure Home Warranty (closed in 2018)

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 a result of denied claims and misunderstanding of coverage. 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 to 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 online third-party customer reviews and BBB ratings.
• 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 or inaccurate 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 plan details, coverage limits and exclusions, and pricing. Not to mention, most will offer a workmanship guarantee that ensures your repairs or replacements are covered.
• Flexible plans—Leading home warranty companies offer flexible plans to allow policyholders to select the systems and appliances they want protected and flexibility to choose from multiple options.
• 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, the first 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 the broken item instead of repairing it if the repairs are too costly. Be clear on the replacement policy, so you don’t end up with a warranty that only gives you the depreciated value on 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.