Ratings Methodology for Home Warranties

NerdWallet’s overall ratings for home warranty providers are weighted averages of ratings in the following categories:
  • Pricing.
  • Coverage type.
  • Coverage limits.
  • Ability to choose who does the work.
  • Work warranty.
  • Customer ratings.

    • Data collection and review process

    NerdWallet reviews several companies that provide home warranties for U.S. customers.

    We collect data from providers and do firsthand testing as necessary. Our process starts by gathering information from providers and contacting providers for further information where needed. This information, combined with our specialists’ hands-on research, make up our proprietary assessment process that scores each provider’s performance.

    The final output produces star ratings from poor (1 star) to excellent (5 stars). Ratings are rounded to the nearest half-star.

    Information updates

    Our writers and editors review providers on an annual basis. Throughout the year, we may maintain contact with providers and update any changes to their offerings.

    Factor weightings

    The weighting of each rating factor is based on our team’s assessment of which features are most important to consumers and which ones impact the consumer experience in the most meaningful way.

    The review team

    The review team comprises writers and editors who cover home services. Each writer and editor follows NerdWallet’s strict guidelines for editorial integrity.

    The combined expertise of our team is infused into our review process to ensure thoughtful evaluation of products and services from the customer's perspective.

    Pricing

    If the provider’s list price for its least expensive home warranty plan (with the least expensive service fee option) is $40 per month or less, it earns the highest rating in this category. If the provider charges more than $70 per month for this plan, it earns the lowest rating. We also consider the plan cost per item and whether the pricing is consistent across test zip codes.

    Coverage type

    We consider whether appliances and systems are covered under the provider’s least expensive warranty plan, which might be an appliance-only plan, a systems-only plan or comprehensive plan:

  • Appliance-only plan: The highest-scoring plans must cover the refrigerator, oven/range/stove, cooktop, dishwasher, built-in microwave, garbage disposal, ceiling and exhaust fans and clothes washer and dryer. The lowest-scoring plans cover only four of these or fewer.
  • Systems-only plan: The highest-scoring plans must cover air conditioning, heating, electrical, plumbing, water heater and ductwork. The lowest-scoring plans will cover only two of these or fewer.
  • Comprehensive plan: The highest-scoring plans must cover 10 or more of the 14 items covered in the highest-scoring systems-only and appliance-only plans; air conditioning and heating must be included. The lowest-scoring plans only cover five items or fewer with either air conditioning or heating, or seven or fewer with no air conditioning or heating.

    • Coverage limits

    For this category, we consider the coverage limits on roof leak repairs and for HVAC, electrical, plumbing and appliances. If a provider’s coverage limit is at least $10,000, it earns the highest rating. If its total coverage limit is under $5,000, it earns the lowest rating. We also evaluate the coverage for damage related to accessing areas of the property, such as cutting through walls to fix leaky pipes. If the provider’s limit is over $800, it earns the highest rating. If the provider’s limit is under $50 or is not stated in the service agreement, it gets the lowest rating.

    Ability to choose who does the work

    We consider whether providers allow customers to choose who comes to do the repair work. Providers that allow this earn the highest rating; providers that do not allow this earn the lowest rating.

    Work warranty

    We consider whether providers warranty the repair work. Providers that warranty the work for at least 60 days earn the highest rating; providers that do not warranty repair work or do not mention one in their contracts earn the lowest rating.

    Customer reviews

    For this category, we calculate a provider’s average customer review score based on customer ratings from three sources: Trustpilot (a consumer review site), Consumer Affairs and the Better Business Bureau. Average scores of 4.1 out of 5 and above earn the highest rating; providers with an average score of 2.0 or lower earn the lowest rating.

    Regulatory or legal action

    The final category is unweighted and discretionary. A provider’s rating may be adjusted down if it has faced governmental regulatory action or major legal action in the past five years for practices harmful to consumers.
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