Ratings Methodology for Home Warranties (State Level)

NerdWallet’s overall ratings for home warranty providers are weighted averages of ratings in the following categories:
  • Pricing.
  • Coverage limits.
  • HVAC coverage.
  • Work warranty.
  • Customer ratings.
  • Service fee flexibility.
  • Plan options.

    • Data collection and review process

    NerdWallet reviews several companies that provide home warranties to 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 affect 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 and its prices are consistent across test zip codes, it earns the highest rating in this category. If the provider charges more than $70 per month for this plan and its prices are inconsistent across test zip codes, it earns the lowest rating.

    Coverage limits

    For this category, we consider the coverage limits on limited roof leak repairs and for HVAC, electrical, plumbing and appliances. If a provider’s aggregate 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.

    HVAC coverage

    If the company’s least expensive plan comes with HVAC coverage that comes with tune-ups, a coverage cap of at least $9,999 and that covers ductwork, evaporator coils and compressors, it earns the highest rating. If the provider only offers one or none of those things in its basic plan, it gets the lowest rating.

    Repair guarantees

    We consider whether providers warranty the repair work. Providers that warranty the work for at least 90 days earn the highest rating; providers that do not warranty repair work or do not mention it 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 two sources: Trustpilot (a consumer review site) and the Better Business Bureau. Average scores of 4.01 out of 5 and above earn the highest rating; providers with an average score of 2.0 or lower earn the lowest rating.

    Service fee flexibility

    If the provider lets customers choose from different service fees when setting their premiums, it earns the highest rating. If it has set service fees, it earns the lowest rating.

    Plan options

    If the provider offers appliance-only, systems-only and comprehensive options, it gets the highest rating. If it only offers one comprehensive plan, it gets 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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