WiseDollar

Your home is your castle. It?s also filled with appliances and systems that help make modern life more comfortable and enjoyable. We?re talking about your air conditioning, heater, oven, dishwasher, and the like. Those are big-ticket items and most Americans can?t afford to just replace one if it fails without going into a great deal of debt. 

Home warranty companies offer the ability to protect those assets, but given the number of companies out there and the bad reputation some of them have, it?s vital that you make an informed choice. In this guide, we?ll help you understand what goes into making the best home warranties, rating metrics, and more.

What Do Home Warranty Companies Offer?

First, let?s explore what it is that home warranty companies offer in the first place. Really, they?re selling peace of mind. A home warranty is similar to an insurance plan, but it covers things that your homeowner?s insurance won?t. For instance, let?s say you spent $5,000 on a brand new stove. It works great for a couple of years, but then it fails. You?re outside the manufacturer?s warranty, and your homeowner?s policy offers you no recourse.

In most situations, your only option would be to foot the bill for repairs or replacement on your own, but if you have a home warranty with stove coverage (which most offer), you just need to pay your deductible and the warranty company will send a technician out to repair or replace the stove, saving you potentially thousands of dollars.

However, not all home warranty companies offer the same level of coverage or the same optional covered items. You?ll need to compare each plan and each provider to make sure that you?re getting the protection that you need and deserve.

Which Are the Biggest Home Warranty Companies in the Industry?

While there are hundreds of different home warranty companies operating in the US, there are a few that stand out from the crowd due to their size, coverage options, reliability, and ratings. The biggest companies include the following:

Home Warranty Company

AHS

Home Warranty of America

Select Home Warranty

Choice Home Warranty

First American Home Warranty

2-10 Home Buyers Warranty

American Home Guard

Why Do Some Home Warranty Companies Have Bad Reputations?

It takes only a little digging on the Internet to unearth news stories concerning disreputable home warranty companies, consumer unease, and serious problems. Why do some companies have bad reputations? Actually, there are several factors at play here, some of the most important of which include the following:

• Additional Fees: With some home warranty companies, you?re on the hook not just for your deductible, but also additional fees. That drives up the cost of the repair or replacement.

• Service Technicians: Many companies do not have their own service technicians. Instead, they work with local providers to handle repairs and replacements. In some cases, a lack of due diligence means that these service providers are subpar, and the experience reflects on the warranty company.

• Re-upping Costs: A home warranty is an annual service contract and in most cases you?ll need to renew it every year. Some companies do not make this clear to customers, who are surprised when they need to re-up at the end of the year.

• Exclusions: Some homeowners think they have coverage for specific appliances or systems, only to find out that those are excluded from their policy.

• Coverage Clauses: All home warranty companies include coverage clauses in the contract to limit their liability, but some try to use those clauses to prevent having to pay out in the event of a failure that should actually be covered.

How to Find a Good Home Warranty Company

There?s no denying the fact that a home warranty can be of very real benefit. It can help protect you from the costs of replacing an expensive home appliance, save you time, and more. However, it?s just as true that not all home warranty companies are on the up and up. So, how do you ensure that you are able to find a trustworthy company?

• Reliability: Check into the company?s reliability rating from their current customers. Do they cover what they say they will? Are their techs professional? Do they arrive on time? If the company is not reliable, you should avoid them. Even low-cost service contracts don?t provide enough return to make this a worthwhile decision.

• Complaints: Consumer feedback is a great yardstick by which to judge a home warranty company. In general, the fewer complaints from customers, the better the company will be. However, remember that all companies will have a few complaints, as there is simply no way to satisfy everyone all the time. So, it?s important to look at the number of complaints, rather than judging based on the presence of complaints at all.

• Terms and Conditions: Read the terms and conditions of the contract. Are they beneficial to you? Or do they favor the company?

• Cancellation/Termination Fees: Is there an early termination fee for cancelling the contract? Can you cancel without a fee for a certain period of time?

• Contract Language: Is the contract written so that you can easily understand it, or is it in legalese? A reputable home warranty company will provide you with a clear, easy-to-understand contract, and will also answer any questions you have before you sign.

• Pushiness: How pushy are the sales people? Are they happy to explain your coverage options to you, or do they try to make an add-on sale and act aggressively? A good company will employ sales professionals who are happy to provide you with information, but will never push to close a sale.

In Conclusion

In the end, a home warranty can provide you with financial protection and peace of mind. However, not all warranty companies are worth your time and money. It?s essential that you make an informed comparison and choose a company that stands behind its word.