What Home Warranty Companies Actually Cover and How They Differ
How home warranty companies differ from each other
Home warranty companies vary most in what they cover, what they charge per service call, and how fast they send someone out. The major national providers — American Home Shield, Choice Home Warranty, First American Home Warranty, Old Republic, and Frontdoor (which owns multiple brands) — all cover the same basic categories: HVAC systems, water heaters, electrical systems, plumbing, and appliances. But the specific items covered within each category, the dollar limits on repairs, and whether they cover the full cost or just a portion differ from company to company.
The second major difference is the service call fee, also called the trade service charge. This is what you pay each time a technician comes to your house. Most companies charge between $60 and $150 per visit, and you pay this fee whether the repair is covered or not. Some companies cap how many claims you can file per year; others do not. A few offer optional add-ons like pool and spa coverage or roof leak repair, which cost extra.
The third difference is response time. Some companies may provide a technician will arrive within 24 hours; others say "within a few days" or leave it vague. If you live in a rural area, response time may be slower because fewer contractors are available. You should check whether the company has contractors in your area before you buy.
Key Takeaways
- Service call fees range from $60 to $150 per visit and are your responsibility each time a technician comes, regardless of whether the repair is covered.
- Most major companies cover HVAC, water heaters, electrical, plumbing, and appliances, but the specific items and dollar limits on repairs vary significantly between providers.
- Response time commitments range from 24 hours to several days, and availability depends on whether the company has contractors in your area.
- Annual premiums typically run $400 to $700 per year, and some companies limit the number of claims you can file or the total they will pay out annually.
- Reading the actual contract matters more than the company name — two plans from the same company can cover different things.
What the major companies cover and exclude
American Home Shield covers major appliances, HVAC, water heaters, electrical systems, plumbing, and some built-in items like garage door openers. They exclude pre-existing conditions, items already broken when the warranty starts, and damage from lack of maintenance. Their service call fee is typically $75 to $125 depending on your plan level.
Choice Home Warranty covers similar categories but includes some items others do not, like well pumps and septic systems if you have them. Their service call fee is usually $60 to $100. They limit claims to a certain number per year on some plans.
First American Home Warranty covers appliances, HVAC, plumbing, electrical, and water heaters. They offer multiple plan tiers — basic, standard, and comprehensive — so the same company covers different things depending on which plan you choose. Service call fees range from $75 to $125.
Old Republic (which operates under several brand names) covers the standard categories and has a reputation for faster claim processing. Their service call fees are typically $75 to $150. They do not cap the number of claims per year on most plans.
Frontdoor operates American Home Shield, Old Republic, and several other brands. Because they own multiple companies, the coverage and pricing can overlap, so you may see the same coverage under different brand names at different prices.
Annual cost and what affects your premium
Annual premiums for home warranties typically range from $400 to $700 per year, paid monthly or annually. The exact price depends on your home's age, size, location, and what plan level you choose. Older homes cost more to insure because systems are more likely to fail. Homes in rural areas may cost more because contractors charge more for travel time.
Most companies offer a discount if you buy the warranty within 30 to 60 days of buying your home, because they assume the systems are newer and less likely to fail. If you wait longer, the premium goes up. Some companies also offer discounts if you bundle the warranty with homeowners insurance through the same provider.
The service call fee is separate from the annual premium. Even if you pay $500 per year, you still pay $75 to $125 each time a technician visits. If a repair costs more than the company will cover, you pay the difference. Some plans cap the total amount the company will pay out per year; others do not.
How to read a warranty contract and spot the limits
The contract is the only document that matters. Marketing materials and sales calls will tell you what the company wants you to think it covers; the contract tells you what it actually covers. Before you buy, download the full contract and search for the word "excludes" or "does not cover." That section lists what is not included.
Look for these specific limits: Does the company cap the dollar amount they will pay per repair? Do they cap the total payout per year? How many claims can you file per year? What is the service call fee? Is there a waiting period before you can file a claim (many have 30-day waiting periods for mechanical failures)? Does the contract cover pre-existing conditions, or only things that break after the warranty starts?
Check whether the company covers the full cost of repair or just a portion. Some warranties cover 100% of the repair cost after you pay the service call fee. Others cover only up to a certain dollar amount per repair, and you pay anything over that. A water heater repair might be covered up to $1,500, for example, but if the repair costs $2,000, you pay the extra $500.
Call the company and ask them to explain what happens if a repair is not covered. Do they still send a technician and charge you the service call fee? Most do. Ask whether they have contractors in your area and what the average response time is. If they cannot answer these questions, that is a sign they do not have good local coverage.
Service call fees and what you actually pay
The service call fee is the most misunderstood part of home warranties. You pay this fee every single time a technician comes to your house, even if the repair is covered. If your air conditioner breaks and the company sends someone out, you pay the service call fee. If they determine the repair is covered, the company pays for the repair itself (up to their limit). If they determine it is not covered, you still paid the service call fee and now you also pay for the repair.
Service call fees typically range from $60 to $150. Some companies charge the same fee for every visit; others charge different amounts depending on what system is being repaired. A plumbing call might be $75 while an HVAC call is $125. A few companies offer plans where the service call fee is waived for certain types of repairs, but these plans usually cost more per year.
If you file many claims in a year, the service call fees add up quickly. Someone who files four claims pays $300 to $600 just in service fees, on top of the annual premium. This is why it matters whether the company limits how many claims you can file per year. If they allow unlimited claims, you could theoretically file 10 claims and pay $750 to $1,500 in service fees alone.
Response time and contractor availability
Response time varies by company and by location. Some companies may provide a technician will arrive within 24 hours of your call. Others promise "within a few days" or do not specify at all. In urban areas, most companies can meet a 24-hour window. In rural areas, it may take longer because fewer contractors are available.
Before you buy a warranty, check the company's website to see whether they service your zip code. Some companies do not operate in certain states or regions. If they do not have contractors near you, they cannot help you, and you will have wasted your money on the premium.
Ask the company directly: How many contractors do you have in my area? What is the average response time for my zip code? Can you may provide 24-hour service? If they cannot answer these questions or if the answer is "we will try but cannot may provide," understand that you may wait several days for service during peak seasons like summer or winter.
When a home warranty makes sense and when it does not
A home warranty makes the most sense if your home is older, you cannot afford a large unexpected repair, or you want predictable costs. If your HVAC system is 15 years old and likely to fail, a warranty that covers HVAC repairs can save you thousands. If you have an older water heater, a warranty covers the replacement cost.
A warranty makes less sense if your home is new and systems are under manufacturer warranty already. Manufacturer warranties typically cover defects for one to ten years depending on the item, and they cover the full cost of repair or replacement. A home warranty would be redundant. A warranty also makes less sense if you have significant savings set aside for repairs and you can afford to pay out of pocket.
Consider your risk tolerance. If a $5,000 HVAC replacement would strain your budget, a warranty is worth the annual premium. If you can absorb that cost without stress, the premium is probably money you do not need to spend. The warranty company is betting you will not file many claims; if you file claims regularly, you come out ahead. If you file few or no claims, the company comes out ahead.
Frequently Asked Questions
Do I have to use the company's contractor, or can I use my own?
Most home warranty companies require you to use their network of contractors. You cannot call your own plumber and have the warranty company reimburse you. If you call your own contractor, the warranty will not cover the repair. Some companies allow you to request a specific contractor if you have one you trust, but they must approve it first.
What happens if the contractor says a repair is not covered?
The contractor will explain why the repair is not covered according to the contract. You can dispute this by calling the warranty company directly and asking them to review the decision. If you disagree with their information, you can file a complaint with your state's insurance commissioner, though this process takes time. You are responsible for paying the contractor's bill regardless of the warranty company's decision.
Can I cancel a home warranty if I change my mind?
Most companies offer a 30-day money-back period after you purchase. If you cancel within that window, you get a refund of the premium. After 30 days, you can usually cancel anytime, but you forfeit the premium you have already paid. Some contracts require you to pay a cancellation fee. Check the contract for the exact cancellation terms before you buy.
Does a home warranty cover damage from my own negligence?
No. If you damage something yourself or fail to maintain a system and it breaks as a result, the warranty will not cover it. For example, if you ignore a leaking pipe and it causes water damage, or if you never change your HVAC filter and the system fails, the warranty company can deny the claim. They consider this lack of maintenance, not a covered failure.
Will my homeowners insurance cover the same things as a home warranty?
No. Homeowners insurance covers sudden, accidental damage like a fire or theft. It does not cover normal wear and tear or mechanical failures. A home warranty covers mechanical failures of systems and appliances. The two work differently and cover different situations, so you need both if you want full protection.