Home Warranties I’d Choose Today, Knowing What I Know Now

When we bought our first house several years ago, we were pumped that it came with a home warranty plan. So when we discovered a small leak in the laundry room right after moving in, we decided to give our shiny new home warranty a spin.

A plumber showed up a few days later, declared the leak to be in the wall and swiftly removed a piece of wallboard the size of a dinner plate. An hour and a phone call to his supervisor later, he’d changed his mind. The leak was only a loose connection outside the wall — but I was staring at pipes inside the wall before even making our second month’s mortgage payment.

I spent two weeks talking with the home warranty provider and trying to get them to retexture my wall. To this day, it still has a square of untextured plaster behind the washer, but this misadventure taught me something about how home warranty coverage works.

While evaluating home warranties for NerdWallet, I’ve combed through over a hundred pages of service agreements, read countless customer reviews, compared hundreds of quotes and chatted with home warranty companies directly. My hope is to pass along the insight I’ve gained into how home warranties work and save readers from the same headache I experienced.

Home warranties can be worthwhile if you go into them with a clear understanding of what they do and don’t offer. Doing your research to find the right plan for your home is an important step in avoiding disappointment as well.

I look for repair coverage for walls, floors and ceilings if a technician has to cut into them. I also pay attention to coverage limits (especially on items that are important to me) and good customer satisfaction ratings — and I read exclusions carefully.

To be clear, I know everybody’s life and financial situation is different. These picks below are just the ones I think would work best for me and my particular house, budget, location and suspicions I have about what might break next (looking at you, water heater).

If I signed up for a plan today: First American Home Warranty

Of all the home warranties I’ve reviewed, First American Home Warranty offers the most features that appeal to me as a homeowner. Specifically, I love the fact that it doesn’t impose caps on certain high-cost categories.

• It doesn’t limit coverage for HVAC, electrical or plumbing services. In a world where most home warranty companies limit how much they’ll pay toward a repair or replacement, First American takes more of a “Nah, you’re good” approach to how much it’ll pay for claims. Your claims will need to qualify for coverage before the “unlimited” cap applies, and the company could refuse to pay anything if your issue is excluded from the service agreement terms. But I like the idea of potentially getting more for my money.

• It pays up to $3,500 for appliances. I was uncomfortable paying $800 for a new dishwasher a few years ago, so the thought of paying $3,500 for any appliance makes me break out in a sweat. But I’m less nervous about the idea if a company is covering the bill. First American also...

» LEARN MORE: Do you need a home warranty? How to decide