Cheapest Home Warranty Companies
Home warranties offer another level of peace of mind for a homeowner. Operating instead of – or in conjunction with – your home insurance policy, a home warranty provides you with extra coverage in case something goes wrong with an appliance. The average life expectancy of the nine main home appliances is 13 years, and the likelihood that one of them will fail in a given year is 68%. This means that you have an above-average chance of experiencing an expensive home appliance failure in a given year. A home warranty ensures that when something like this happens, you are not only financially covered, but you have access to an expert professional technician.
The financial outlay for a home warranty will pay dividends when your refrigerator, your plumbing, or your electrical wiring breaks. This guide will walk you through the key information relating to your home warranty so that you can be best informed when it comes time to make your purchase.
How do Home Warranties Work?
Home warranties work in the same way as a single-product warranty from a manufacturer. The key difference is that you have to pay for a home warranty, whereas a manufacturer’s warranty is usually included in the price. You pay your monthly premium as well as a service fee for a call-out. Then again, if something covered in your home (usually an appliance) breaks suddenly.
Home warranties usually cover an entire system in your home, such as plumbing, electrical wiring, or appliances. They, therefore, function as insurance policies, albeit with a specific area. A key advantage of a home warranty over an insurance policy is that a home warranty will come with expert service. When something does break, you’ll quickly and efficiently have a professional come and fix the problem. There’s no need to call around or get quotes; the warranty company will do that for you.
A standard home warranty cost is usually between $25 and $60 per month. On top of this, you will pay somewhere between $75 and $125 as a service fee if you ever need someone to come and fix something. For a basic warranty with one call out per month, therefore, you can expect to pay somewhere between $100 and $185 per month.
There are a lot of options when it comes to choosing a plan, to the extent that you can basically customize your warranty to fit your specific needs and budget. Home warranties have major advantages over insurance policies, meaning they’re often worth running in parallel to give you true peace of mind.
Choice Home Warranty
Choice Home Warranty is a national company operating in every state except California and Washington. It was founded in 2008, making it a relative newcomer to the world of home warranties. They make the list of the cheapest home warranty companies because they constantly strive to keep their prices down and advertise that they are cheaper than their competitors. According to the Choice website, the plans are cheaper than American Home Shield and – unlike American Home Shield – come with a free second opinion on any repairs that are needed.
The cheapest Choice Home warranty plan starts at $1 per day (i.e., $31 per month). In addition, the Choice service fees are some of the lowest in the industry. In addition, Choice offers benefits for new customers that serve to bring the overall cost down: for new customers, the first month is usually free (effectively reducing the annual cost by around 8%), and, if you pay for the first year in full, you’ll also get a $50 discount. This means for the $1 per day plan, factoring in all discounts, the cost for the first year is around $285.
A further financial benefit when working with Choice Home Warranty is the free repair of anything that breaks within 90 days of being touched by a Choice Home Warranty technician. This shows a commitment to the level of professionalism and ensures that you are covered against any poor-quality workmanship. There’s a reason why Choice regularly wins customer service awards.
American Home Shield
American Home Shield (AHS) – as the name suggests – is a truly national company, offering a wide range of warranties. Its expertise lies in plumbing and electrical warranties. AHS was founded in 1971 and currently operates in every U.S. state except Alaska. It’s owned by a company called Frontdoor that also owns Landmark and OneGuard, similar home warranty companies.
Across the United States, AHS employs over 17,000 contractors. The company as a whole is accredited by the National Home Service Contract Association, meaning you can be sure that you are getting a professional service based on the latest techniques and technologies. The range of services available from AHS is truly vast and can be totally customized to your own specific needs. Under AHS, you can get a warranty that covers your individual appliances, a particular system (such as plumbing or wiring), or your entire home. AHS also offers a fully customized plan, whereby it crafts a warranty unique to your specific wants and needs.
AHS plans start from just under $40 per month, well under the annual average. Obviously, your exact quote will depend on your specific needs. Adding on items like a warranty for a pool, for example, will cost somewhere between $50 and $258. In addition to your basic monthly premium, you’ll also pay a call-out fee when you need a trade professional to come and repair or provide service. However, AHS allows customers to pay flexible fees for this. You can set your service level to $75, $100, or $125 per call out (this will impact the speed with which you receive service, as well as your overall monthly costs).
Select Home Warranty
Unlike the other companies on this list, most of which offer very tailored or customized plans, Select Home Warranty offers three main plans, with minor tweaks available for each. The three main plans are the household appliance plan (covering single appliances), home systems (covering connected things like plumbing or heating), and a holistic plan that covers both systems and appliances.
Select also offers warranties for lesser-known and covered areas, such as pools, sprinkler systems, and well pumps, all of which fall under either the appliance or the system label. The relative simplicity of the Select options is actually a strength, as it allows you to see very clearly what is offered and have a rough idea of the price before you even begin.
The average home warranty contract with Select will set you back somewhere between $300 and $600 per year, or $25 to $50 per month. With some discount codes, you can get $100 off your annual premium. As you add on additional appliances, the overall cost increases.
In addition to the annual premium, you’ll need to pay a service fee whenever a technician is called out to visit your home. Depending on where you live (meaning the distance to your home from the local branch, as well as the cost of living in your area), you’ll pay somewhere between $60 and $75 per visit. This marks Select as one of the cheapest options when it comes to service fees.
Liberty Home Guard
Liberty Home Guard is a newer home warranty provider than the others on this list. This doesn’t necessarily mean that they are any better or worse. What sets it apart is how customizable its offerings are. While this can make it hard to ballpark a price, it does mean that you pay only for what you need rather than pay an ‘off the shelf price.’
With Liberty, you’ll pay slightly more for the service call-out fee than other companies in the industry. This is a flat rate of $80, regardless of where you live in the country (meaning this may be a good option for people who live in rural or high cost of living areas). However, where Liberty is undoubtedly cheaper is when it comes to the monthly cost. The cost for monthly premiums is between $4.20 and $150 per month. However, generally, the three brackets are as follows:
As you can see, there is a significant discount for paying annually for your premium. In addition, if you have a systems warranty, it’s almost certainly worth paying the extra $5 per month or $50 per year to cover your appliances as well.