Home Warranties 101: What They Cover, When To Buy One, And The Best Companies To Compare

by Mickey Lawrence

Home Warranties 101: What They Cover, When to Buy One, and the Best Companies to Compare

If you’ve ever had an AC go out in Texas heat or watched a water heater quit at the worst possible time, you already understand the real value of a home warranty.

A home warranty is a service contract that helps cover the cost to repair or replace certain home systems and appliances when they break down from normal wear and tear. It’s different from homeowners insurance, which is designed for sudden events like fire, wind, or other hazards, not aging parts and everyday breakdowns.

Below are four well known home warranty companies to compare, including Choice Home Warranty, plus three other high ranking options that consistently show up in major “best of” lists for 2025.

Why having a home warranty can be a smart move

A home warranty can help in a few key ways:

Budget protection: You trade surprise repair bills for a predictable monthly or annual plan cost plus a service fee when you request service.
Convenience: You typically submit a claim and the warranty company coordinates a service provider.
Extra peace of mind during transitions: It can be especially helpful after buying a home, when you’re still learning the property and its “personality.”

Pro timing tip most homeowners miss

If you bought a new appliance, it often comes with a manufacturer warranty. When that warranty is about to end, many homeowners wait until it expires, then shop for protection. A smarter strategy is to start comparing home warranties before the manufacturer coverage ends, even 2 months before, so you have time to read the fine print, confirm what’s covered, and avoid gaps.

The 4 home warranty companies to compare

1. Choice Home Warranty

Choice is frequently listed as a strong value option and is often positioned as a budget friendly competitor.

3 Pros

Often priced competitively compared to premium brands, which can help if you want coverage without the highest monthly cost.
Wide, mainstream coverage focus on major systems and appliances, which fits many standard homes.
Straightforward cancellation language in its agreement, including refunds that may be prorated after 30 days (terms and deductions can apply).

3 Cons

Like most home warranties, there are exclusions and limits that can impact approvals, so reading the service agreement matters.
Cancellation refunds can be reduced by fees and any service costs incurred, which surprises some homeowners.
If you want higher coverage caps or broader protection, some comparisons rate American Home Shield higher on coverage strength.

2. American Home Shield

American Home Shield is commonly ranked at or near the top for coverage depth, especially for HVAC and higher payout limits in some plans.

3 Pros

Strong reputation in “best home warranty” rankings, often noted for more comprehensive coverage options.
Higher coverage caps on some plans, including examples like appliance and HVAC limits, depending on plan level.
Flexible service fee structure in many locations (your service fee choice can affect your monthly premium).

3 Cons

Pricing can run higher than budget oriented companies, depending on the plan and service fee you choose.
Coverage still comes with caps, exclusions, and contract details that matter, especially for older homes and pre existing issues.
Add ons and pricing vary by location and home details, so two homeowners can get very different quotes.

3. First American Home Warranty

First American is often highlighted for starter plans and solid baseline coverage, and it’s frequently listed among top providers.

3 Pros

Commonly recognized as a strong “starter plan” option in rankings.
Plans start at a lower monthly entry point (varies by location), making it approachable for many homeowners.
Lets you choose your service call fee (often cited as $100 or $125), which can help balance monthly cost vs visit cost.

3 Cons

Like other warranties, the service call fee applies per claim visit, so frequent service requests can add up.
Add ons and upgrades can increase the total monthly cost beyond the advertised “starting” price.
You still need to match the plan to your home: older systems, pools, or specialty items may require add ons, and not every plan fits every home.

4. Select Home Warranty

Select is frequently mentioned for roof leak coverage value and lower premiums, but it is also known for tighter coverage caps on many items.

3 Pros

Often ranked highly for roof leak coverage compared with other providers.
Typically marketed with lower monthly premiums and lower service fees than some premium competitors.
Simple plan structure (Bronze, Gold, Platinum) that makes it easier to compare what you actually need.

3 Cons

Coverage caps can be low for many items (commonly cited around $500 for many categories, with higher caps for HVAC).
Roof leak coverage can have a limited annual maximum, so it’s not the same as full roof replacement protection.
Availability varies by state, so it’s important to confirm it’s offered where you live before investing time comparing plans.

How to choose the right home warranty for your home

Here’s the quick way to shop without getting overwhelmed:

List your top “high dollar pain points” (AC, furnace, water heater, electrical, plumbing, fridge).
Compare coverage caps for those exact items, not just the company’s name.
Confirm service fee amounts and how claims work.
Read exclusions for pre existing conditions, improper installation, or maintenance requirements

PRO TIP: ALL RESIDENTIAL HOMES QUALIFY FOR HOMEOWNER'S WARRANTIES

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