April 12, 2024


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The worst home warranty companies of 2021

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If you’ve been in the market for a home warranty, you’ve surely read a number of “best of” lists telling you which companies will give you the most protection for your money. However, it also pays to know which home warranty providers have bad reputations so you know which ones to steer clear of. Often, you can listen to your common sense — if a provider is offering you a deal unlike any other, you want to double-check the company’s reviews and the contract’s fine print to find the catch.

A good home warranty provider will offer a clearly worded service contract that lets you know exactly what it will and will not cover. A trustworthy company has professional customer service and responds to your service requests promptly. Additionally, a good provider will guarantee the labor on its repairs for at least 30 days. Most importantly, a reputable company will cover the repairs it promised to cover in your contract.

To avoid a situation where you find yourself stuck with a company that’s unlikely to pay out claims, we recommend purchasing a plan from one of the best home warranty providers available. It’s a good idea to get quotes from a few top providers like American Home Shield, Choice Home Warranty and Select Home Warranty.

The worst home warranty providers

We consider the following providers to be the worst home warranty companies in the industry:

  1. American Home Warranty.org

  2. US Home Guard

  3. Like New Home Warranty

* Home Media contacted each of these companies for comment but did not receive any responses.

American Home Warranty.org

Based out of Foster City, Calif., American Home Warranty.org tops our list of the worst home warranty companies, due in part to its F rating from the Better Business Bureau (BBB). Although the company does have a website, as specified by the business name, it contains almost no real information. There are no details about service, contracts or policies. The only option is to enter your contact information to “compare home warranty rates today.”

According to complaints on the BBB website, American Home Warranty.org uses this information to spam potential customers with emails. The company has failed to respond to these complaints, which earned it an F rating. Additionally, the company claims to be BBB-accredited, even using the organization’s logo on its website, but as its profile indicates, it is definitively not accredited. Steer clear of even providing your information to American Home Warranty.org.

US Home Guard

With a D- rating from the BBB, the Missouri-based provider US Home Guard fares only slightly better. According to customer complaints, this company has a habit of sending out fraudulent mailers telling homeowners that their home warranty is about to expire. People who were never customers of US Home Guard in the first place have received “final notices” about policies they never purchased. Based on BBB complaints, this appears to have happened as recently as August of 2020.

Additionally, US Home Guard’s website shows that its customers are locked into three-year contracts. Most home warranties last one year, though some companies may provide a discount for a two-year contract. If you’re locked into a three-year plan, you may be stuck paying for a warranty that doesn’t cover what you need it to. US Home Guard also doesn’t provide a clear pricing structure or information about its service area — you’d need to send them your contact details just to find that out.

Like New Home Warranty

The BBB actually has a current alert active for Like New Home Warranty, reporting “a pattern of consumer complaints alleging misleading sales tactics, misleading sales presentations, failure to cancel contracts after a consumer has requested cancellation, failure to provide refunds and poor customer service.” Overall, the BBB gives Like New Home Warranty, which is also based out of Missouri, a D+ rating. The company has not responded to the BBB’s concerns about its poor treatment of customers.

Like New Home Warranty does offer three residential service contract plans, but it includes no pricing information on the website. More worryingly, it doesn’t provide any information about the terms and condition of the actual home warranty plans. Most companies offer sample contracts on their websites for potential customers to look over when deciding between home warranty companies. Reading these documents very carefully before signing is a vital part of purchasing a home warranty.

How to spot a bad home warranty company

Savvy homeowners generally know to check the online customer reviews of any company or provider before paying for a good or service. However, this can get complicated when it comes to home warranty companies because of the nature of contracts. Complaint after complaint may say something along the lines of “this company didn’t cover my refrigerator repair!” However, the complaining customer may not say (or may not realize) that the particular type of damage to the refrigerator was never actually covered under their contract.

Of course, some disreputable companies will refuse to pay for claims that they genuinely should cover, or they may give customers the run-around in hopes that they will give up on being reimbursed. Pay attention to a company’s BBB rating to see how it responds to complaints. Look at the length of time the company has been around. A younger company isn’t necessarily bad or untrustworthy, but there’s less of a track record to examine. When possible, ask friends or family about their experiences with their home warranty company and how it responded when they filed a claim.

Here are some other warning signs that you may be dealing with one of the worst home warranty companies:

  • Aggressive marketing or upselling

  • High-pressure sales tactics

  • Poor response times for repairs or reimbursements

  • Quick, cosmetic fixes to damaged appliances or systems

  • Hidden fees or coverage limits

  • Unprofessional or inexperienced contractors

  • Difficulty in cancelling contract or preventing auto-renewal

  • Deceptive wording in contracts

Above all, read your contract before you sign. An Angie’s List poll of dissatisfied home warranty customers found that 82% had only a vague idea of what their contract covered or hadn’t read it at all. The best way to keep from getting swindled by the worst home warranty companies is to be an informed consumer. A little reading beforehand could save you frustration and money in the long run.

Recommended home warranty companies

While there are some untrustworthy players in the home warranty industry, that shouldn’t deter you from purchasing a warranty from a reputable provider. The following companies have proven track records and offer legitimate coverage for your home’s most valuable systems and appliances.

1. American Home Shield

With nearly 50 years in the home warranty business, American Home Shield is a founder of the industry. Its three plans — one for appliances, one for systems and one for both — are fairly comprehensive, and the provider is available in every state except Alaska. Perhaps most importantly, American Home Shield covers certain repair situations that other companies don’t, including unknown pre-existing conditions, insufficient maintenance, rust, corrosion, improper installation and mismatched systems. For a free quote, call 844-529-9298 or fill out this simple form.

2. Choice Home Warranty

Though Choice Home Warranty has only been around for 12 years, it has distinguished itself with quick responses to customer phone calls and a repair guarantee that lasts three times as long as most of its competitors’. Every repair performed by one of Choice Home Warranty’s contractors is guaranteed for a full 90 days; if your repaired system or appliance breaks during that time, the company will send someone to fix it for free. Both of the company’s plans are very affordable, so fill out this quick form or call 929-400-6165 to get a free estimate and find out what a Choice Home Warranty will cost you.

3. Select Home Warranty

Finally, Select Home Warranty is a good choice for homeowners with limited budgets who still want a comprehensive coverage plan. The company’s Platinum Plan, which covers key appliances and systems, costs less than $40 a month. With plans available to homeowners in 49 states, Select Home Warranty represents an excellent value for money. Fill out this form or call 888-370-3956 to get a quote for one of the company’s three plans.

Frequently asked questions

How do I know whether a home warranty company is trustworthy?

Unfortunately, it can sometimes be difficult to tell which home warranty companies are a bad deal with just a quick glance. Since you’re entrusting the protection of your home to the company you choose, you’ll want to do a bit of research first. Here are some good places to start:

  • The company’s history. How long has the provider been around? How long has it been providing service in your area?

  • The company’s reputation within the industry. How well is the company regarded by consumer protection organizations like the Better Business Bureau? Is your local branch of the company a high-rated one?

  • The company’s reputation with existing customers. What kind of ratings does the company receive from current and former customers on the BBB, TrustPilot, Yelp, and other third-party review sites? Do you personally know anyone who has signed up for one of the company’s home warranties?

  • The company’s value for money. If it passes all the other tests, does the provider offer the coverage you need at a price you can afford? Are its prices competitive with other home warranty providers?

Do I still need a home warranty if I have homeowners insurance?

Homeowners insurance and home warranties actually cover different situations. Insurance applies to issues such as catastrophic damage to the structure of your home from events like natural disasters. Home warranties, on the other hand, are residential service contracts that cover repairs to home appliances and systems that break down from normal wear and tear.

If you have a home warranty, you can file a claim and your provider will send a contractor to your home to diagnose the problem. If it falls under the terms of your contract, the technician will repair the problem for the cost of a service fee — usually around $75 per visit. If the appliance or system can’t be repaired, most providers will even cover the cost of a replacement.

Do home warranties cover air conditioning systems?

Many home warranties do indeed cover HVAC systems, which include air conditioning. However, since air conditioners tend to be expensive to fix, some providers will only include these systems in their more expensive plans. If there’s a specific home appliance or system you want coverage for, double-check your plan to make sure it’s included.