Home warranties only cover breakdowns from normal wear and tear. They typically exclude pre-existing conditions, lack of maintenance, improper installation, cosmetic damage, and damage caused by pests or natural disasters. Secondary damage (like water damage from a leaky pipe) and structural components are also excluded.
A home warranty is a service contract that covers the repair or replacement of major home systems and appliances that fail due to normal wear and tear. It is not homeowners insurance. It does not cover damage from fire, theft, or natural disasters.
Watch out for unsolicited "FINAL NOTICE" letters or aggressive sales tactics using scare language. Key indicators of a predatory plan or poor provider include vague contract terms, unverified company reviews, and arbitrary maintenance clauses used to deny claims.
HomeServe Plans and Pricing
These are HomeServe's main home warranty offerings and their average monthly prices: Complete Plumbing: $48.99 per month. Interior Protection: $55.99 per month. Premium Home Protection: $72.98 per month.
Home Warranty: Skip and Build Your Emergency Fund
Dave Ramsey recommends skipping any home warranty for a couple of reasons. First, the typical home warranty costs $450 annually, and only 25% of premiums are paid to homeowners.
Dave Ramsey’s "8% rule" is a controversial retirement strategy stating that you can safely withdraw 8% of your starting retirement portfolio each year—adjusting for inflation—provided your money is invested 100% in stock mutual funds.
Avoid any admissions of fault or liability when talking to your adjuster. Such statements can be used to shift blame, potentially decreasing the amount you might be compensated. Instead, focus on describing the damage and the events as they happened, without inserting personal opinions about who might be at fault.
Based on that criteria, our picks for the best home warranty companies are:
One of the best benefits to having coverage from HomeServe is that you don't pay for repairs up to the coverage limit. When it comes to plumbing repairs, that means that blocked drains, leaking wax seals, hot-water heater pipes, and other burst pipes are covered.
American Home Shield (AHS) and HomeServe offer two distinct approaches to home protection.
If you recently bought a new home, you may receive a suspicious letter labeled “Home Warranty Division” or something similar. These letters look official, reference your mortgage lender by name, and warn about expiring warranty coverage. But they are almost always a scam.
Home warranties often sound like a safety net, but they come with significant drawbacks, including expensive service call fees, strict coverage exclusions, and limited control over who fixes your home.
Don't hesitate to walk away from a purchase if the issues are too extensive or the seller is unwilling to negotiate repairs. There will be other houses on the market, and this may not be your dream home after all.
Home warranties often cover common plumbing issues like leaks, clogs, and pipe breaks caused by normal wear and tear—but coverage depends on your specific plan. Exclusions are common, including problems from poor installation, code violations, frozen pipes, or plumbing outside the home's foundation.
A 100,000-mile extended car warranty typically costs between $2,000 and $4,500 in total, or about $75 to $250 per month. The exact price varies wildly based on your car's make, age, current mileage, and the comprehensiveness of the coverage you choose.
Damage caused by most disasters is covered but there are exceptions. Standard homeowners policies do not cover flooding, earthquakes or poor maintenance. Flood coverage is provided by the federal government's National Flood Insurance Program, although it is purchased from an insurance agent.
Complaint statuses
We lost pretty much everything. We didn't even know we had coverage with this company as our warranty paperwork was lost. We sold the house (or what was left of it in July 2022). Our credit card charge from HomeServe was a small monthly amount that was missed.
Coverage for water damage depends on the situation and the source. If the damage is sudden, accidental, and comes from inside your home, you may be protected with a standard homeowners insurance policy. However, you typically won't be covered if the water damage is caused by outside flooding or a neglected repair.
Take a look at the benefits of cover through HomeServe: Major and minor problems – from burst pipes and dripping taps to blocked toilets and leaking overflows, you're covered.
You can purchase a home warranty at any time. You might choose to purchase your home warranty before summer hits so that your cooling system is covered or before winter arrives so that your heating is covered. This is the case for several seasonal areas of the home such as with pools, roofs and lawn sprinkler systems.
Extended car warranties typically don't cover damage from accidents (you'll need car insurance for that) or wear and tear. They only cover what's specified in the warranty. You may even need to purchase separate extended warranties for different parts, depending on what you want coverage for.
Identifying Signs of a Home Warranty Scam
The insurance company that denies the most claims depends heavily on the type of insurance you are referring to:
How to Intimidate the Insurance Adjuster
A house is uninsurable when its risks are too high for a standard insurance company to accept, which usually happens due to severe structural disrepair, a history of frequent claims, or a high-risk location.