Ratings Methodology for Home Warranties

Our comprehensive rating system evaluates the most-searched-for home warranties across more than 600 data points to help you find the home warranty that best fits your situation.

13 companies reviewed

11 features assessed

600+ data points analyzed

Methodology, by category

NerdWallet’s overall ratings for home warranty companies are weighted averages of ratings in different categories.

Our team identifies the features that we believe are most important to homeowners. We give these features more weight in our scores. This means the things that matter more to customers have the biggest impact on a company’s final NerdWallet rating.

A weighted average means some categories count more toward the final score than others. We calculate a company’s overall NerdWallet rating with the following percentages (weights):

5.0

Overall score

We consider how affordable plans are for homeowners. To do this, we look at each company’s uotes for all available plans and how pricing differs by location and service fees. Companies that score the highest in this category have lower prices than competitors, charge the same price in every city and state, have lower service fees than competitors and offer more than one service fee option.

Plan value (20%)

Our team rates home warranty plans based on value. To us, value means getting the most coverage for the lowest price. The highest-rated companies cover many items but charge less for their plans.

Coverage limits (20%)

Our team looks at how much a company pays for different repairs. We focus on four main areas: heating and air (HVAC), electrical, plumbing and appliances. The best companies pay at least $5,000 total for HVAC and ductwork; $3,000 for electrical systems; $3,000 for plumbing systems; and $3,000 per appliance, even in their cheapest plans.

Repair guarantee (10%)

A 30-day repair guarantee is common with home warranties. This means if a repair fails within 30 days, the company fixes it again without charging a customer another service fee. The best companies "roll over" these guarantees, meaning they won't charge another service fee even if a repair fails after a customer renews their plan for another year. They also explain this coverage in their sample contracts. The lowest scores go to companies that offer no guarantee or don’t put it in writing.

Customer satisfaction (10%)

To see how happy customers are with a company, we look at two things: average ratings and resolved complaints. First, we average a company’s score from three websites: Trustpilot, ConsumerAffairs and the Better Business Bureau (BBB). We also check the BBB to see how many complaints the company resolved in the past year. The higher the percentage of resolved problems, the better the company’s score.

Policies (10%)

Our team checks sample contracts for policies that go above and beyond standard coverage. We look to see if companies offer customers extra help, like paying to haul away replaced items or doing their best to find matching replacement items.

Coverage for uncommon items (5%)

Our team considers if plans cover items that most companies leave out, such as HVAC tune-ups or roof leak repairs. The best companies include the most "extra" items in their standard plans.

Regulatory or legal action

We lower a company’s NerdWallet rating by half a star if we find serious regulatory or legal issues. We check for these two problems within the past five years:

Legal settlements: The company had to pay customers after a court case, even if they didn't admit they were wrong.
Government findings: A government agency found the company’s business practices were harmful to customers.

Data collection and review process

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

Our team gathers information the same way a customer would. We visit company websites, request quotes online, and read real customer reviews. We also dig through sample contracts to see exactly what’s covered and what’s not.

Sometimes, we call sales representatives to see if they are being honest about their plans or just trying to make a sale.

We also search for legal or government issues that the company might have had in the past five years, such as legal settlements and government violations.

How we calculate ratings

Our home warranty writers compare all the information we collect for every company on our list. We look at them side-by-side so we can rank which ones offer the best choices for homeowners. Then we give each company a NerdWallet rating based on how it ranks compared to other companies.

The NerdWallet rating is represented between 5 stars (great) to 1 star (poor). Ratings are rounded to the nearest half-star.

Plan types

Some home warranty plans cover only appliances or only systems. Others cover both. Our rating method lets us compare different plan types fairly. We rate all plans for the same factors.

Information updates

Our writers and editors review companies on an annual basis. Throughout the year, we may talk with providers and update information that affects their rating.

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

Our review team is made up of writers and editors who are home services experts. We know home warranties inside and out. Each writer and editor follows NerdWallet’s strict editorial guidelines. That means we have to be unbiased, honest and fair in their ratings and writing.

We use our experience and expertise to look at every company from a customer’s point of view. This helps us make sure our ratings are thoughtful and truly helpful to consumers.