Best Home Warranty Companies for 2020

A home warranty can save you money and give you peace of mind

If you're like most people, your home is the single largest investment you'll ever make. One way to protect that investment is through a home warranty, which provides discounted repair and replacement services for household appliances and systems.

With so many home warranty companies on the market, it can be hard—and time-consuming—to find the plan that's right for you and your home. To get you started, we analyzed more than two dozen home warranty companies. We looked at a variety of factors, including Better Business Bureau ratings (we only considered companies with A or B ratings), coverage options, pricing, and how easy it is to find pricing and contract details online. Here are five of the best home warranty companies in the business for 2020.

Best Home Warranties

Best Overall: American Residential Warranty

  • BBB Rating: A+
  • BBB Accreditation: N/A
  • Years in Business: 10
  • Coverage Area: Nationwide
  • Service Fees: $55
  • Annual Cost: $360 to $720

American Residential Warranty is our top overall pick because of its clear pricing, low service fees ($55), low costs, and customizable plans. Coverage is available nationwide, and the company has an A+ rating with the Better Business Bureau.

You'll get immediate service for emergencies; other requests for service are taken care of within 24-48 hours. You can speak with a live, U.S.-based customer service representative 24/7/365. What's more, you can choose your own service provider or use the company's network of licensed, pre-screened technicians.

American Residential Warranty offers four plans:

  • Kitchen Plus ($29.99/month): Built-in microwave, dishwasher, garbage disposal, interior electric system, kitchen exhaust fan, range/oven/cooktop, refrigerator (excluding ice maker), and water heater.
  • Heating & Cooling ($39.99/month): Central air conditioning, central home heating, humidifier, and interior electrical system.
  • Platinum ($49.99/month): Everything the Kitchen Plus and Heating & Cooling plans cover.
  • Platinum Premier ($59.99/month): Everything the Platinum plan covers plus ceiling fans, ductwork, garage door opener, plumbing stoppages (fixtures not included), plumbing system (fixtures not included), range hood, and refrigerator ice maker.

You can further customize your plan by including coverage for any of the following add-ons:

  • Enhanced air conditioning coverage
  • Extended coverage on multiple appliances and systems ("Deluxe Advantage")
  • Well pump
  • Pool and spa
  • Additional range/oven/cooktop
  • Additional refrigerator or freezer
  • Additional air conditioner
  • Plumbing system (included with Platinum Premier)
  • Ceiling Fans (included with Platinum Premier)
  • Enhanced plumbing coverage that includes faucets and fixtures ("Plumbing Advantage")
  • Food loss
  • External water or sewer lines
  • Water heater (included with Platinum Premier, Platinum, and Kitchen Plus)
  • Clothes washer and dryer (included with Platinum Premier)
  • Ice maker (included with Platinum Premier)
  • Built-in microwave (included with Platinum Premier, Platinum, and Kitchen Plus)

Pros/Cons of American Residential Warranty

Pros

  • A+ BBB rating

  • Low costs

  • Pick your own technician

Cons

  • Low annual limits on some appliances and systems

  • Not BBB accredited (as of Nov. 2019)

Best for Flexibility: AFC Home Club

  • BBB Rating: B
  • BBB Accreditation: Since Feb. 20, 2015
  • Years in Business: 10
  • Coverage Area: Nationwide (except Calif., Hawaii, and S.C.)
  • Service Fees: $75/$125
  • Annual Cost: $350 to $600

WWith AFC Home Club, you can choose from four plans and a list of additional coverage options. If you need service, you can call customer service 24/7/365 or file a claim online. In general, the company will dispatch a technician within 24 to 48 hours.

AFC Home Club is one of the most flexible home warranty companies when it comes to choosing a technician. While several competitors allow you to choose your own technician, AFC Home Club doesn't require prior approval—the company will connect directly with the repair person you select.

If you have an AFC Home Club policy, you're entitled to several extra "member benefits," including:

  • Moneytips: Free credit monitoring and identity protection alerts
  • DealCash: Savings at thousands of participating restaurants and retailers
  • Emergency Alert Network: Alerts to notify friends and family in an emergency

AFC Home Club offers four plans (prices depend on the plan and service fee you choose):

  • System Plan: Air conditioning, heating system, water heater, electric system, plumbing system, and ductwork.
  • Silver Plan: Washer/Dryer, refrigerator, range/oven/cooktop, dishwasher, garbage disposal, and garage door opener.
  • Gold Plan: Everything covered by the System and Silver Plans.
  • Platinum Plan: Everything covered by the Gold Plan plus ice maker and built-in microwave.

You can also add coverage for a:

  • Sump pump
  • Septic system
  • Pool and spa
  • Hot water dispenser
  • Stand-alone freezer
  • Tankless water heater

Pros/Cons of AFC Home Club

Pros

  • Low cost and low service fees

  • Pick your own technician

  • Good selection of plans and add-ons

Cons

  • Turnaround time on claims is two to four days

  • Must enter personal details to view pricing

Best for Guaranteed Service: Cinch Home Services

  • BBB Rating: B+
  • BBB Accreditation: Since June 27, 2019
  • Years in Business: 40
  • Coverage Area: Nationwide (except Alaska and Hawaii)
  • Service Fees: $100/$125/$150
  • Annual Cost: $336 to $1,020

No matter which Cinch Home Services plan you choose, you won't be denied coverage for unknown preexisting conditions, rust, or corrosion. What's more, there's a 180-day "workmanship guarantee." If the problem persists, Cinch will fix it at no additional cost to you. If you need to make a claim, you can open a service request online, ask Alexa, or call customer service 24/7/365.

Many home warranty companies have one or two service fees to choose from, but Cinch Home Services offers three. This can make it easier to find a plan that meets your budget—pay more each month for a plan with a lower service fee, or vice versa.

The amount you pay each month depends on the plan and service fee you choose and where you live. The Cinch website has an easy-to-use online quote: Enter your zip code and choose a deductible to see prices for the various plans (you don't have to enter any personal details).

Cinch offers three plans (price varies by region and plan):

  • Appliances: Washer/dryer, range/oven/cooktop, dishwasher, built-in food center, freestanding ice maker, built-in microwave, range exhaust hood, refrigerator, built-in trash compactor, and wall oven.
  • Built-in Systems: Air conditioning (including ductwork), attic fans, ceiling fans, central vacuum, doorbells, electrical system, garage door opener, garbage disposal, heating system (including ductwork), instant hot/cold water dispenser, plumbing system, smoke detectors, sump pump, toilets, water heater, built-in whirlpool/jetted tub, and a $500 homeowners insurance deductible reimbursement.
  • Complete Home: Everything covered by the Appliances and Built-in Systems plans.

You can also add coverage for a:

  • Swimming pool and spa
  • Septic system
  • Well pump

Pros/Cons Cinch Home Services

Pros

  • Protection for unknown preexisting conditions

  • Rust and corrosion coverage

  • 180-day repair guarantee

Cons

  • No coverage in Alaska and Hawaii

  • No option to pick your own technician

Best for Coverage Options: American Home Shield

  • BBB Rating: B
  • BBB Accreditation: Since May 1, 1997
  • Years in Business: 48
  • Coverage Area: Nationwide (except Alaska)
  • Service Fees: $75/$100/$125
  • Annual Cost: $480 to $1,020

American Home Shield has been in business for nearly 50 years. It's the largest, most-chosen home warranty provider, and it pays out more service requests than any other home warranty company.

The company offers several plans. However, something that sets American Home Shield apart is its "Build Your Own Plan" coverage. This option covers only the appliances and systems you choose. Think of it as an à la carte home warranty plan. When a covered appliance or system breaks down, you can request service online or by calling customer service.

American Home Shield offers four plans (price varies by region and plan):

  • Appliances Plan: refrigerator, range/oven/cooktop, washer/dryer, dishwasher, built-in microwave, trash compactor, freestanding ice maker, garage door opener, and built-in food center.
  • Systems Plan: Air conditioning (including ductwork), heating (including ductwork), electrical, doorbells, smoke detectors, ceiling fans, plumbing (including stoppages), water heater, garbage disposal, instant hot/cold water dispenser, and central vacuum.
  • Combo Plan: Everything covered by the Appliances and Systems plans.
  • Build Your Own Plan: Covers only the appliances and systems you choose.  

You can also add coverage for:

  • Electronics (extended warranty; no receipts required)
  • Pools and spas
  • Well pump
  • Septic system (first-year customers only; not renewable)
  • Guesthouse (under 750 square feet)

Pros/Cons American Home Shield

Pros

  • Build your own plan

  • Low-cost options

  • Coverage add-ons

Cons

  • Low annual limits on some applications and systems

  • Need prior authorization to use your own technician

Best for BBB Ratings and Customer Reviews: Amazon Home Warranty

  • BBB Rating: A+
  • BBB Accreditation: Since Dec. 11, 2018
  • Years in Business: 10
  • Coverage Area: Nationwide (except Calif., Fla., Hawaii, N.Y., and Wash.)
  • Service Fees: $75
  • Annual Cost: $349 to $549

Amazon Home Warranty (not affiliated with amazon.com) has only been around for 10 years, but it has already earned a solid reputation. The company has an A+ rating with the Better Business Bureau—one of only two companies we tested that has this distinction. Moreover, it has just shy of a perfect 5/5 stars rating from 326 customer reviews on the Better Business Bureau's website.

Amazon Home Warranty offers three plans and more add-on coverage options than most other home warranty companies. This can be a plus if you have a higher-end home with multiple systems or custom features.

Amazon Home Warranty offers three plans (price varies by region and plan):

  • Appliance Plan: Dishwasher, refrigerator (including ice maker), washer/dryer, trash compactor, oven/range/stove/cooktop, microwave oven, instant hot water dispenser, garbage disposal, attic fan, ceiling fan, bathroom exhaust fan, doorbell, and kitchen fan/exhaust hood.
  • System Plan: Central A/C system, central heating system, plumbing (including stoppages), electrical system, hot water heater, ductwork, jetted bathtub, and garage door openers.
  • Combo Plan: Everything included in the Appliance and System plans.

You can also add coverage for your:

  • Pool and spa
  • Additional central A/C
  • Additional central heating
  • Additional refrigerator
  • Additional hot water heater
  • Stand-alone freezer
  • Lawn sprinkler system
  • Septic system
  • Whole-house humidifier
  • Sump pump
  • Central vacuum
  • Well pump
  • Wine refrigerator
  • Septic tank pump
  • Water softener

Pros/Cons Amazon Home Warranty

Pros

  • A+ BBB rating and positive customer reviews

  • Appliance plan covers more than just appliances

  • Great selection of coverage add-ons

Cons

  • Only one service fee option

  • Must enter personal details to view pricing

What Is a Home Warranty?

Most people are very familiar with homeowners' insurance, which protects against any accidental damage to your home and belongings due to theft, fire, storms, and natural disasters. A home warranty protects your home, too, but it works differently.

A home warranty is a service contract that helps pay for repairs and replacements for covered appliances and major home systems. In exchange for a monthly or annual fee, you pay a set service fee each time an appliance or system fails.

In general, you don't need a home inspection or maintenance records to buy coverage. And it doesn't matter if your home is brand new or 50 years old.

How Does a Home Warranty Work?

After you choose a plan, service fee, and any add-on coverage, you pay upfront for the entire year or set up monthly payments. Most companies have a "waiting period" of 15 to 30 days after you buy the plan before coverage takes effect.

Once that waiting period is over, you're free to start using the home warranty. If you bought or were given a home warranty as part of a real estate transaction, your coverage typically starts when you close on your new home.

While the specifics depend on the company, here's a general rundown of how a home warranty works:

  1. If a covered appliance or system breaks down, you submit a claim with your home warranty company either online or by phone. Most companies have 24/7/365 customer service representatives ready to help you.
  2. Your home warranty company chooses a service provider.
  3. The service provider contacts you to set up an appointment.
  4. The technician comes to your home to diagnose the problem. If it's covered, the technician repairs or replaces the item.
  5. You pay the service fee to your home warranty company or directly to the technician (depending on your plan). The home warranty company covers the rest.

What Does a Home Warranty Cover?

A home warranty covers eligible appliances and systems in new and pre-owned homes. Many home warranty companies offer three types of plans, including:

  • Appliance plans (e.g., washer/dryer, dishwasher, and refrigerator)
  • Systems plans (e.g., air conditioning, heating, plumbing, and electrical)
  • Combo plans that cover everything included in the appliance and systems plans

Most companies allow you to add coverage for specific items not covered under the appliance or system plan. Add-ons include pools, spas, lawn sprinkler systems, additional appliances (such as a second air conditioner or refrigerator), wells, and septic systems.

Home warranty plans have coverage limits, or caps. For example, you may be covered for up to $2,000 per year per appliance, with an annual claim limit of $15,000. Be sure to take a close look at the fine print to be sure you understand what's covered by the plan and the limits that apply. This may be especially important if you have higher-end appliances and systems. 

Many (but not all) home warranty companies deny claims if an appliance or system:

  • Was not installed correctly or maintained properly
  • Was not used properly
  • Does not meet local building codes
  • Had a known or unknown preexisting condition when you bought the warranty

What Does a Home Warranty Cost?

There are two costs to look at when you compare home warranty plans:

  1. The service fee
  2. The monthly (or annual) cost

The service fee is the amount you pay each time you request service. These fees typically range between $55 and $150. Depending on the company, you can choose from one, two, or three service fees. In general, the lower the service fee, the more expensive the plan.

If you need more than one type of technician for the same issue—for example, you need a plumber and an electrician to work on a water heater—you may owe two service fees.

The monthly or annual cost is the amount you pay to have access to the "discounted" service calls. These costs range from about $350 to more than $1,100 a year, depending on the plan, service fee, house size, and where you live.

Are Home Warranties Worth It?

That depends. Every appliance and home system eventually breaks down. If you're handy around the house, you might be able to do repairs yourself and save money.

Many homeowners, however, don't have the skills, tools, time, and patience to do their own repairs. In these situations, a home warranty can make financial sense.

Here's why. According to the "1% rule," you should set aside at least one percent of your home's value each year to cover maintenance and repairs. For example, if your home cost $200,000, you should budget $2,000 a year for maintenance. Another rule—the "square foot rule"—advises you to budget $1 per square foot. So, if your home is 2,000 square feet, you should set aside $2,000 a year.

The annual cost of a home warranty could be well under those guidelines, even if you use the service several times a year. Say you have a $200,000 home and want to set aside the recommended $2,000 a year for maintenance. Now, assume you buy a home warranty instead. If the plan costs $500 a year and you have a $100 service fee, you could make 15 claims before reaching that $2,000 threshold.

Of course, there's no way to tell if you would use the $2,000 you set aside—and if not, you can save it for the next year. Likewise, you can't predict if you'll use a home warranty if you buy one. Still, a home warranty often ends up saving money in the long run. And it can certainly help you budget and provide peace of mind.