Our Home Warranty Review Methodology
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Reviewed by
In This Methodology: Research Process | Comparison Factors | Provider Scores | The Team
We are committed to providing comprehensive and unbiased reviews to our readers. We aim to be transparent about our review standards and research process. Our research team conducted a focus group and multiple surveys, interviewed experts, and connected with providers for insights. We also listened to customer service calls, analyzed thousands of customer reviews, and gathered coverage data. We applied this research to our review standards and compared home warranty companies to help you decide which provider is right for your home.
What is Our Home Warranty Research Process?
Our research focused on understanding each provider’s service, coverage, and customer experience.
Customer Insights
Customers share their experiences and perspectives by leaving reviews across various platforms. We’ve read more than 57,000 reviews for home warranty providers and compiled themes to help you better understand the companies you’re considering.
We read customer reviews and Better Business Bureau (BBB) reports, noting common pain points, complaint patterns, and how the company responded to customer concerns. These are the third-party review aggregators we primarily referenced for customer reviews:
- BBB
- Best Company
- Consumer Affairs
- Google Reviews
- Trustpilot
- Yelp
We listened to dozens of customer service calls from several major home warranty providers. We assessed wait times, sales tactics, representatives’ responses to questions and concerns, and the overall quality of the experience.
We conducted several surveys to ask homeowners across the United States about their real-life experiences with home warranty providers. For each survey, our team developed questions to uncover why homeowners purchased their home warranties and how they viewed their experiences. The survey questions centered around their experiences filing claims and interacting with customer service, as well as their overall satisfaction levels.
Finally, our team hosted a focus group with homeowners who purchased various home warranty plans. We gathered first-hand information about common pain points and areas of confusion.
Through these sources, we’ve gained insight into the customer experience with each provider we review. Additionally, these insights allow us to clarify misconceptions within the industry.
Secret Shopping
In addition to listening to customers’ stories, we interacted with companies’ websites and customer service teams as a homeowner would:
- We browsed through providers’ websites.
- We requested quotes online.
- We called customer service with questions and for quotes.
- We read sample contracts.
We requested quotes from all 50 states for every home warranty provider we researched. We then compared average monthly plan prices to determine which providers offer the best value for homeowners.
Industry Interviews
We interviewed real estate agents and other home industry professionals to give us further insight into real-life applications and trends in the home warranty business.
What Factors Did We Evaluate to Compare Home Warranty Companies?
To rate companies, we applied the data we gathered to our review standards. First, we evaluated each provider in four comparison categories: coverage, value, trust and transparency, and availability and service.
We rated each provider across 31 factors within these categories. Each factor was assigned a point value in our review standards based on its importance to a homeowner. These standards are on a 100-point scoring system, with the categories outlined below:
Coverage
Coverage carries the most weight in our provider ratings. If you’re looking for financial protection for your home systems and major appliances, a plan’s coverage will be a driving factor in which home warranty you choose. This category rates companies based on available coverage and how coverage caps apply.
Annual Coverage Cap
A coverage cap is the maximum amount a provider will cover for a given repair, a category of repairs, or all repairs for the plan year. While it’s not always apparent what the coverage cap is for a given plan, we dug into the sample contracts to determine whether each company we review sets an annual coverage cap for the plan. In general, most providers break down individual coverage caps per item, but a few providers stipulate a total dollar amount that claims will be limited to during a plan term.
While most home warranty providers don’t limit the number of claims you can file during your plan, all companies impose a dollar limit to protect their liability. Some companies have a “no lemon policy” that imposes a threshold on the number of claims you must make on an individual item before it can be replaced. Companies without a pre-set annual coverage limit were awarded more points in this category because they offer more flexibility to make multiple claims in a year.
Home Systems Coverage
Built-in system repairs are among the most costly, and many homes aren’t comfortable or fully functional without a working plumbing, electrical, and HVAC system. Therefore, we rated companies highest if they had a coverage cap of $2,000 or more for each essential system.
Major Appliances Coverage
Refrigerators, ovens, and laundry machines are some of the most important appliances to homeowners. In our survey of 1,000 homeowners in 2021, we found that more than 40% of respondents would rush to repair their refrigerator, oven, or washing machine as soon as they detected signs of damage.
We focused scoring in this category on these larger, more essential appliances because they’re likely to impact your daily life in case of a breakdown and are also more expensive to repair or replace than a smaller appliance, such as a garbage disposal or microwave. We scored providers higher if they had a coverage cap of $2,000 or more for each of these major appliances.
Obstructed Wall Coverage Cap
Obstructed walls are concrete or encased walls, ceilings, or floors. Some companies set a separate coverage limit if the system or appliance repair requires access through an obstructed wall. Companies scored higher if the coverage cap for an obstructed wall was $1,500 or higher.
Unique Coverage
Home warranties can include various coverage items beyond the obvious major kitchen and laundry appliances and HVAC and plumbing systems. If you’re looking for robust coverage, additional coverage items factor into how well a provider will serve your needs. Our unique coverage section awards companies for providing a variety of additional coverage items, such as roof-leak protection, additional appliance coverage, septic tank and pumping, allowances for code upgrades, and debris disposal.
Plan Value
Plan value is the second category of factors we rated companies on. The value of a plan reflects how much coverage you get for what you pay. We considered multiple factors here, including average monthly cost, service fee amounts and options, and the overall flexibility each provider offers to make a plan fit into a homeowner’s budget.
Average Monthly Cost
To compare monthly cost across providers, we requested quotes for each company using the same address to ensure fair comparison. While we requested quotes for each type of home (single-family, mobile, and condominium) for our reviews, this rating specifically compares providers across an average single-family home smaller than 5,000 square feet.
After requesting quotes from 57 providers, we found that the typical home warranty plan costs between $38.73 and $63.16 per month. The lower end of this range accounts for basic plans that cover appliances or systems, and the higher end accounts for combination plans that generally cost more. Combination plans aren’t the best option for all homeowners, so we set the monthly comparison threshold at $50. Companies with an average cost of less than $50 per month scored higher than those with a higher average cost.
Lowest Service Fee
A service call fee is the amount a provider charges you during service. It’s a set amount, and you can think of it as similar to a deductible on an insurance plan. Based on our research and the quotes we gathered, the typical range of service fees is $65–$125. We compared service call fees across home warranty providers, and those with lower options rated better. Additionally, some companies provide flexible service call fees, allowing a homeowner to customize their monthly cost and service call fee to better fit their budget; these providers also rated slightly higher.
Cost Flexibility
Cost flexibility refers to the options homeowners have to customize their plan costs. This includes choosing your service call fee, paying your plan upfront, or purchasing a multi-year plan. Most home warranty companies offer the option to pay for your annual plan up-front for a discounted rate or a few months free.
Choosing your own service call fee isn’t yet industry standard, but several companies allow customers to lower their monthly premiums by paying a higher service call fee. Multi-year policies are a perk because they can lock in your monthly rate beyond your first year. In the case of plan-length workmanship guarantees, a multi-year plan can provide you with longer-term coverage if a covered item needs to be reserviced. Note that this is the exception and not the rule. A workmanship guarantee is only applicable to specific repairs done on the appliance or system; it doesn’t address a new cause of breakdown that may occur on the same appliance.
We rated companies higher for offering these types of cost-flexibility options.
Trustworthiness and Transparency
Trust and transparency are important factors that work together. Transparency refers to the provider’s clarity and follow-through on plan terms and customer service. Trust is what’s earned from homeowners when providers are clear and reliable in their communication and service. To evaluate these concepts, we considered the length of the provider’s workmanship guarantee, the flexibility of policy changes, the brand’s reputation across the BBB and various customer review aggregators, and the ease of locating a sample contract. Some providers have confusing terms and conditions that don’t clearly communicate what is and is not covered.
Workmanship Guarantee
A workmanship guarantee provides homeowners with coverage in the event of workmanship errors. It guarantees that if a repair is made by the provider and the item breaks down again for the same issue, the provider will return and do the repair free of charge without a service fee. The length of these guarantees can vary widely in the home warranty industry, but the standard is coverage for at least 30 days after the original repair. We rated companies with a 90-day or longer workmanship guarantee higher than those that offer the 30-day minimum standard.
Sample Contract
We recommend carefully reading through a sample contract for each provider you’re considering. Sample contracts give you details on coverage caps, limitations, exclusions, and other important factors in your coverage. Due to the importance of understanding the fine print of your contract before signing up for a plan, we rated companies with sample contracts readily accessible online higher than those without them.
Policy Change Flexibility
Policy change flexibility includes free cancellation within 30 days and the freedom to transfer the policy if you move to a different property or sell your current home. Most home warranty companies allow you to cancel your policy for a full refund within the first 30 days. However, some will deduct a cancellation fee between $45 and $75 if the state legislature allows it (your state’s sample contract will specify whether it’s legal to charge a cancellation fee in your state). Companies that don’t offer free cancellation or free transfer did not receive any points in this category.
Brand Reputation
Brand reputation includes how customers and third parties view the company. We calculated a brand reputation score based on ratings from the BBB and customers’ reviews and ratings on the BBB and Trustpilot.
Availability and Service
Availability and service include factors that influence how easy it is to work with the company as a homeowner. For example, we considered how quickly providers respond to claims and how long it takes a technician to arrive at your home. We also considered the channels providers offer you to file a claim and whether you can choose your own technician.
Guaranteed Response Time
We rated companies that guarantee a response time of fewer than 24 hours higher compared to those that take longer, especially 48 hours or more.
Claims Process
Ease of filing a claim can make a difference when you’re dealing with a home system or appliance breakdown. According to our 2022 survey of 1,000 homeowners, 59% were either very satisfied or satisfied with their provider’s claims process. Companies typically allow homeowners to file a claim through one or more of these channels: by phone call, online, and by smartphone app. Those with more options for filing a claim rated higher in our scores.
Service Flexibility
Flexible service makes home warranties more convenient for homeowners. We rated providers with emergency services and the ability to choose your own technician higher than those without these options.
What Are Our Factor Weights for Rating Home Warranty Companies?
As mentioned above, we assigned all of these factors point values totaling 100 points. We scored each provider across all 31 factors in our review standards to achieve a total score out of 100.
| Category | Percent of Score |
|---|---|
| Coverage: |
- Home systems coverage
- Major appliances coverage
- Annual coverage cap
- Additional coverage items
- Obstructed wall coverage cap
40%
Value:
- Average monthly cost
- Lowest service fee
- Cost flexibility
30%
Trust and Transparency:
- Workmanship guarantee length
- Sample contract availability
- Policy change flexibility
- Brand reputation
16%
Availability and Service:
- Guaranteed response time
- Claims process
- Service flexibility
What Is Our Provider Ratings Process?
Below is our process for analyzing and rating a provider. To visualize this, we chose American Home Shield as our sample provider for a Raleigh, North Carolina, home. We selected a 2,000-square-foot, single-family home as our home type.
We started by pulling a quote using American Home Shield’s online quote form. American Home Shield pairs all its systems with a $5,000 coverage limit per system in its entry-level and mid-tier plans. We then examined if American Home Shield offers an annual cap limit, which is $50,000. We looked to see if it provides coverage for items homeowners may find important, such as additional appliances. Since American Home Shield offers unique item coverage, it scored the maximum points in this category.
Next, we analyzed American Home Shield’s monthly prices. American Home Shield quoted us $29.99 for its entry-level plan, $49.99 for its mid-tier plan, and $79.99 for its comprehensive plan. The average of these monthly premiums is $53.32. American Home Shield lost points because the average monthly cost is over $50. It lost additional points because its lowest service call fee is $100, which is higher than $75. However, American Home Shield gained points by allowing customers to choose their service call fee and upfront payment discounts.
We then reviewed American Home Shield’s trustworthiness and transparency. American Home Shield lost points because its workmanship guarantee is under 90 days. However, it scored highly on policy change flexibility and sample contract availability. American Home Shield scored well overall on third-party review sites regarding brand reputation. It holds a B rating with the BBB and an average of 2 out of five stars on Trustpilot.
We analyzed American Home Shield’s availability and customer service. The company had a similar rating to others in this category due to its guaranteed response time of 24–48 hours, its 24/7 claims line, and its phone and online claims portal. All these factors are standard within the home warranty industry.
To wrap up, we added the category totals. American Home Shield scored 88 out of 100 total points.
How To Interpret Company Ratings
Home warranty providers that score 90 to 100 offer excellent coverage, claim response times, and policy and cost flexibility. Providers that score 80 to 89 are very good; typically, these providers don’t earn as many coverage points due to lower coverage caps, shorter workmanship guarantees, higher monthly fees, or longer claim response times. However, they still offer excellent value if their coverage plans meet your home’s needs.
Providers that score 70 to 79 may have scored lower across several categories and don’t often make it into our top recommendations. Comparing these policies to find the best fit for your home and budget may still be worthwhile.
How Should You Choose the Best Home Warranty Company for You?
Use these tips to find the best home warranty for your specific coverage needs:
- Check reputation: Read consumer reviews from third-party sites such as Best Company and Trustpilot to understand the customer experience a provider offers. Trade organizations such as the National Home Service Contract Association and the Service Contract Industry Council also provide lists of recommended providers that follow fair business practices.
- Determine your coverage needs: Determine which items in your home you want to protect before deciding on a plan. Many companies have plans that cover appliances only, plans that cover systems only, and plans that cover both systems and appliances.
- Request multiple quotes: Request quotes from at least three providers before making your final decision. Timothy Meenan, JD, who serves as executive director and general counsel for the Service Contract Industry Council (SCIC), recommends that homeowners shop around because there may be another provider with similar coverage at a lower price. He noted that providers are competitive and “trying to do things better, faster, cheaper, and give more consumer choice.”
- Read sample contracts: Comparing contract details for several home warranty providers is a great way to determine which home warranty is best for your needs. All home warranty companies provide a sample contract detailing home warranty coverage limits, exclusions, and the provider’s claims process.
We back up our home warranty ratings and recommendations with a detailed rating methodology to score each provider objectively. We conduct research by speaking with company representatives, requesting quotes, analyzing sample contracts, and conducting focus groups and consumer surveys.
We score each provider against our review standards, which include four comparison categories: coverage, value, trust and transparency, and availability and service. We rate each provider across 31 factors within these categories. Each factor is assigned a point value based on its importance to a homeowner, totaling 100 points. We then convert the final scores to a 5-star rating.
Here’s a breakdown of our weighted factors:
- Coverage (40%): We scored coverage based on included home systems and appliances, add-on options, and unique benefits. We also compared coverage caps and policy exclusions.
-
- Additional coverage items
- Annual coverage cap
- Home systems coverage
- Major appliances coverage
- Obstructed wall coverage cap
- Value (30%): We compared the coverage level received to monthly pricing to determine plan value. We considered premium pricing, service fees, and flexibility in customizing plan costs.
-
- Average monthly cost
- Cost flexibility
- Lowest service fee
- Trust and Transparency (16%): We evaluated each company’s reputation using the Better Business Bureau ratings and customer reviews on third-party review sites. We read through plan change policies, workmanship protections, and sample contract availability.
-
- Brand reputation
- Policy change flexibility
- Sample contract availability
- Workmanship guarantee length
- Availability and Service (14%): We award higher scores for faster claim processing and response times. We also considered service technician policies, including options to choose your technician.
-
- Claims process
- Guaranteed response time
- Service flexibility
To share feedback or ask a question about this article, send a note to our Reviews Team at reviews@thisoldhousereviews.com.
