Worst Home Warranty Companies (2024)
The worst home warranty companies provide subpar customer service, inadequate coverage, and frequently deny claims. This guide exposes some of the worst offenders and suggests reputable alternatives.
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A home warranty helps protect your home and prevents you from paying for broken system or appliance repairs. Unfortunately, not every home warranty policy is reliable. The worst home warranty companies take advantage of their customers by overcharging on plans, not following through with service requests, and refusing to issue refunds.
We’ll explain how you can spot a bad home warranty company and give examples of untrustworthy providers before sharing recommendations for top home warranty providers to consider instead.
Key Takeaways
What Are Signs of a Bad Home Warranty Company?
Home warranty companies offer homeowners peace of mind by protecting their home systems and appliances. However, choosing a low-quality company could lead to delayed claims, poor customer service, and unrecovered funds. Homeowners should look for the following warning signs of a bad home warranty company.
Aggressive and Misleading Marketing Tactics
Aggressive marketing can sometimes signal a bad home warranty company. It might bombard you with phone calls or emails after you’ve declined to buy or renew a plan. Some companies might also attempt to create a false sense of urgency by running a sale and claiming that prices will increase after their offer expires.
Delays in Repairs and Replacements
Typical home warranty companies schedule technicians within a day or two after processing your claim. When we surveyed 1,000 homeowners on their home warranty experience, 38% had completed repairs within one to two days. The worst home warranty companies take weeks to schedule a repair. These delays may cause additional home system and appliance damage depending on your repair needs.
No Business License
Some companies may also operate without proper state licensing. If you suspect a shady company, we recommend checking your state’s consumer protection offices to verify its legal registration.
Poor or Inexperienced Service Technicians
When a home warranty company performs services or replacements, it might produce less-than-expected results. For example, some homeowners have claimed that their home warranty company refused to replace an old, outdated appliance. Instead, they applied a quick fix that inevitably led to another breakdown. Some homeowners have also complained that their home warranty company sent inexperienced repair professionals to provide service.
Poor Communication
Reputable home warranty companies have excellent customer communication and respond to claims within 24–48 hours. Our home warranty survey revealed that we learned that most respondents received an approved claim within 24 hours. You won’t find this same promptness with a questionable provider. Bad home warranty companies can be hard to reach via telephone or email. Some homeowners have complained that, after filing a complaint, their home warranty company didn’t respond for days or weeks at a time.
Reimbursement Issues for Repairs
Some home warranty companies allow homeowners to choose their own repair technicians and then reimburse the completed repair fees. Untrustworthy companies won’t reimburse policyholders or will take too long to issue a reimbursement after submitting a receipt.
Unexpected Costs
In our research of bad home warranty companies, one of the most common complaints we encountered was unexpected charges. Homeowners claimed their policy instituted an arbitrary coverage limit and had their policies renewed without consent. Another common complaint involved receiving a bill for an undisclosed cancellation fee.
Unjustified Claim Denials
Home warranty companies lose money when they need to pay technicians to service repairs or make replacements. To avoid these costs, bad home warranty companies add policy limitations in fine print within their service contracts, which could lead to claim denials.
What Are the Worst Home Warranty Companies?
Our research shows that the below providers are some of the industry’s worst home warranty companies.
American Home Guard
American Home Guard started in 2013 as a Pennsylvania-based company and has grown to 38 states. Policies were available for less than $40 a month, and customers were overall satisfied with them.
In 2016, consumers began filing complaints against the company as it took longer to pay out claims. In October 2018, American Home Guard closed its doors abruptly.
Here are a few of the complaints customers filed against American Home Guard:
- Limited customer service hours: American Home Guard had limited customer service availability, which caused further payment delays.
- No refunds: Negative reviews flooded the company’s Better Business Bureau (BBB) page, claiming it didn’t offer refunds after its closure.
- Payment delays: When American Home Guard was in operation, some consumers complained that the company delayed payments or promised them a refund, then went back on that promise. They claimed that American Home Guard didn’t cover their repairs.
Service America Home Warranty
Service America Home Warranty was a large-scale home warranty company founded in 1973. Over the years, the company grew to offer policies to over 65,000 homeowners throughout Florida. Many customers reported positive experiences with Service America, which offered policies for as little as $20 per month. However, the company closed for business in November 2018 with little warning.
We’ve highlighted former policyholders’ common complaints regarding Service America Home Warranty below:
- Lack of refunds: The company promised to return unused portions of each customer’s premiums, but many customers reported never receiving their refunds.
- No customer support: When Service America Home Warranty shut its doors, there was no customer support to resolve outstanding claims and premiums.
- Repair delays: Even when the company was operational, many customers complained that Service America Home Warranty took weeks or sometimes months to complete repairs. The company did not have enough qualified contractors to complete the jobs.
- Unexpected fees: Many customers complained that Service America Home Warranty continued charging after its shutdown.
Secure Home Warranty
Secure Home Warranty was a Philadelphia-based home warranty company that opened in 2016 and offered services in 32 states. The company permanently closed its doors in 2017 after allegedly defrauding its policyholders of thousands of dollars. In 2019, former Secure Home Warranty owners, Elliot Ashkenazie and Alan Maleh, were investigated by the Pennsylvania Attorney General’s Office for consumer fraud and violations against seniors. They were found guilty of unlawful conduct in 2020.
The most common complaints against Secure Home Warranty included the following issues:
- Alleged fraud: Secure Home Warranty never delivered on its promised services. Consumers didn’t receive a refund for their premiums, and many reviews claim that the company continued to charge their credit cards even after the company shut down.
- Communication issues: Secure Home Warranty allegedly promised policyholders access to a 24/7 claims reporting center. Instead, policyholders could only reach a voicemail that was always full.
- Reimbursement delays: Customers allege that Secure Home Warranty told them to hire their own project technicians and request a reimbursement. Many customers claim they never received their refunds.
- Unexpected fees: Secure Home Warranty customers complained about continuous annual charges and service fees even when they hadn’t used their plan or filed a claim.
How Do You Choose the Right Home Warranty Company?
The Best Home Warranty Alternatives
While it’s true that certain home warranty companies engage in dishonest practices and exploit their customers, not all home warranties are corrupt or untrustworthy. Many home warranty companies offer comprehensive, affordable coverage, and 24/7 customer service, and initiate service requests within 24–48 hours of receiving a claim. Our survey results showed an overwhelming majority, 92.7% of policyholders, were satisfied or very satisfied with their home warranty plan.
Below are our top recommendations for reliable home warranty companies:
Reviews of the Best Home Warranty Companies
Liberty Home Guard
Best Overall
American Home Shield
Best for Comprehensive Coverage
Select Home Warranty
Best Value
First American Home Warranty
Best Appliance Coverage
Annual Home Warranty Cost Calculator
Our team created a calculator to break down the estimated annual cost of owning a home warranty. Enter your monthly premium, service call fee, and estimated number of claims to see your projected annual cost. It’s best to request a quote directly from one of our recommended providers, as annual costs and service fees vary between them.
| Appliance | Average Repair Cost | Average Replacement Cost |
|---|---|---|
|
Dehumidifier |
$50–$200 |
$1,300–$2,800 |
|
Microwave |
$50–$400 |
$60–$2,000 |
|
Dishwasher |
$50–$500 |
$400–$3,000 |
|
Exhaust Fans |
$16–$300 |
$250–$950 |
|
Electric Range |
$100–$500 |
$230–$3,000 |
|
Gas Range |
$100–$500 |
$230–$3,000 |
|
Dryer |
$100–$400 |
$450–$2,300 |
|
Oven |
$100–$430 |
$400–$3,000 |
|
Washer |
$50–$450 |
$400–$2,300 |
|
Freezer |
$90–$500 |
$160–$2,900 |
|
Refrigerator |
$40–$350 |
$200–$5,000 |
Note: The annual cost figure generated by our home warranty calculator is not an indication of a company’s actual plan cost, as annual costs and service fees vary based on your plan selections and your home’s size, type, and location.
Our Conclusion on the Worst Home Warranty Companies
Homeowners should conduct thorough research to avoid shady and untrustworthy home warranty companies. Check for warning signs of deceptive practices, fraudulent behavior, or poor servicing. We recommend pulling quotes from our recommended home warranty companies and comparing policies. Choose a home warranty policy that offers the best value at the right price.
FAQ About Home Warranty Companies
Which home warranty is the best?
The best home warranty for you depends on your budget, location, and your plan’s covered appliances and systems. We recommend American Home Shield for most homeowners due to its comprehensive coverage options and extensive industry experience.
Are home warranties worth the money?
Yes, home warranties are worth the money since they help you save on costly repairs and replacements. You could pay less in home warranty costs compared to thousands of dollars for a new cooling system, sewer line, or water heater.
Is a home warranty the same as homeowners insurance?
Though similar, a home warranty and homeowners insurance are different. A home warranty protects major appliances and systems in your home, like HVAC systems and your dishwasher, when they break down due to normal wear and tear. Homeowners insurance protects your home when it suffers damage from natural disasters, fire, or theft.
What is a service call fee?
A service call fee is the deductible a home warranty provider charges you when you file a new claim. All providers require you to pay the service call fee before any repairs are made. Various providers, such as American Home Shield, provide different service call fee options to help lower your monthly cost; for these providers, you can choose a higher service call fee to get a lower monthly premium.
Do home warranty companies provide a guarantee for completed repairs?
All reputable home warranty companies offer a workmanship guarantee for completed repairs. That means a provider will fix a new breakdown that occurred to a previously repaired item within its workmanship guarantee time period. The industry standard is 30 days. There are several home warranty companies, however, that offer a longer workmanship guarantee.
Our Rating Methodology
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
How Do I Find the Best Home Warranty Company in My Area?
Find in-depth reviews on the best home warranty companies for each state below.
Find Home Warranty Pros in Your State
Related Resources
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