The latest home warranty insights: Homeowner survey report

Key points

• Most homeowners (89%) reported that their home warranty company approved their claim.

• The three most common items homeowners reported breaking down were air conditioning, electrical and plumbing systems.

• Homeowners reported that, on average, it took their home warranty company 21 days to repair or replace their broken item.

Home warranties are service contracts that companies offer homeowners to cover repairs or replacements for home appliances and systems. However, customers’ general consensus on home warranties isn’t favorable — many customers rate home warranty companies poorly on third-party review sites such as the Better Business Bureau. We found that one of the most common complaints centered on claim denials.

Our team surveyed 1,000 homeowners in November 2023 to verify whether these negative sentiments applied to their experiences with a home warranty. We also pulled general insights to see what respondents considered most important in home warranty coverage.

Our survey methodology

We drafted two screening questions to qualify our respondents. We wanted a specific demographic of homeowners with a home warranty who had filed a claim within the last three years. Our survey contained 20 questions — most centered on gathering cost and claims information for the home warranty providers we included.

We used a third-party research platform to find respondents. The platform housed, launched and tracked our survey. We used a sample size of 1,000 participants.

General survey insights

Before we dive into specifics, here are general insights into why participants bought a home warranty, what features were most important to them and whether they paid a monthly or annual premium.

Reasons homeowners buy a home warranty

Purchasing a home warranty is a financial decision you shouldn’t take lightly. We wanted to understand why homeowners chose to buy a home warranty instead of saving the money they’d otherwise pay for a plan premium. We also wanted to see if homeowners purchased a home warranty of their own volition rather than as an inclusion with their home purchase.

According to our survey results, homeowners primarily have a home warranty due to a recent home purchase — 24% of the 1,000 respondents reported that their home warranty came with the home sale. The next most common reason homeowners purchased a home warranty was that they had repaired an expensive appliance or major system; 21% of participants selected this answer.

Twenty percent of participants bought a home warranty after hearing about it through marketing channels, such as television commercials and online ads, and 19% of participants said they purchased a home warranty after replacing a major appliance or home system. The remaining 16% of respondents selected the following reasons:

• “A friend or family member recommended it” (9%)
• “After realizing I own older appliances/major systems” (7%)

Most important features

Our survey results showed that participants considered a home warranty company’s plan coverage to be the most important feature — 33% in total. The remaining majority of features were split fairly evenly, with a company’s claims process, reputation and customer service experience taking a total of 44%.

Surprisingly, participants considered a provider’s plan premium and service call fee to be the least important features when shopping for a home warranty — 8% selected plan premiums and 3% chose service call fees. Our initial research showed that home warranty costs are a major consideration for homeowners before they purchase one.

Annual premium vs. monthly premium

We wanted to see which type of plan premium our respondents preferred when signing up. Slightly more than half of participants (53%) reported that they pay an annual premium. The remaining 47% paid monthly.

We broke it down further by seeing which premium option participants chose by provider. We found fairly split results across most companies, with the only outliers being 2-10 Home Buyers Warranty and Choice Home Warranty (CHW). Sixty-two percent of participants who purchased a 2-10 plan chose the monthly premium option, while 61% of CHW participants purchased an annual premium. These results align with our research since these particular companies offer better monthly and annual premium rates, respectively.

The table below shows the percentages of monthly and annual premiums by provider.

What are the most common plan types homeowners purchase?

Home warranties typically offer at least three plan types: appliance-only, systems-only and combination. Combination plans bundle coverage for home systems and appliances, which raises costs. Below, we pulled insights into plan types participants preferred.

Plan level

The majority of participants (75%) purchased an appliance and systems plan. Of those participants, 39% chose the comprehensive plan option their home warranty company offered, which means their plan covered most of their home appliances and systems. 

This coincides with plan coverage being the most important factor for choosing a home warranty, as consumers usually purchase a plan that provides the best protection for their budget. The remaining 25% of respondents chose a systems-only or appliance-only plan or weren’t sure which plan type they had.

Most common add-ons

Our survey asked participants to select the add-on options they purchased, which we framed as a multiple-selection question. This setup allowed participants to choose multiple options since participants likely bought more than one add-on.

Of the 488 participants who reported they purchased a home warranty plan with add-ons, 21% purchased additional major systems as an add-on and 19% chose additional appliances. Roof leak repair coverage was the next most common add-on, with 15% of participants selecting it.

The table below highlights the add-ons respondents purchased.

What are the most common items to break down?

According to our survey, the most common breakdowns participants reported were air conditioning systems, with 19% of participants selecting this answer. Electrical and plumbing system breakdowns were the next most common, at 14% and 11%, respectively. 

The remaining item breakdowns participants reported were 10% or lower each. Here are the percentages of the remaining items:

• Heating/furnace (10%)
• Dishwasher (9%)
• Clothes washer (7%)
• Refrigerator (7%)
• Roof leak (6%)
• Clothes dryer (5%)
• Oven/stovetop (4%)
• Pool (4%)
• Water heater (4%)

What is the average home warranty claim approval rate?

As mentioned above, denied claims are one of the most common pain points customers experienced with home warranty companies. We used our survey to find whether our participants regularly experienced claim denials as well.

According to our results, 89% of respondents reported that their home warranty company approved their most recent claim. This surprised us since many of the negative reviews for home warranties center on frequency of denied claims.

When we analyzed the claims approval rate by brand, nine out of the 10 brands we included in our survey had at least a 75% claims approval rate. And six of the 10 companies had a less than 5% claims denial rate according to participants.

The table below shows a breakdown of each home warranty company’s claims approval rate.

Claims satisfaction

Most participants (88%) reported that they were either very satisfied or satisfied with the outcome of their most recent claim. The remaining 7% were neutral and 5% were dissatisfied or completely dissatisfied. This further emphasizes that home warranties provide value for the money. Seemingly, the many negative comments on review platforms come from a vocal minority.

We also pulled the claims satisfaction rates for each home warranty company included in our survey. The table below gives an overview of each provider’s claims satisfaction rate.

What is the average time companies take to repair or replace an item?

Another common pain point for consumers is the time companies take to repair or replace their broken systems or appliances. Our survey indicated that the average repair or replacement time for each provider was 21 days. We found that all providers took 10 days or longer to complete a repair or replacement, with repairs generally taking longer than replacements.

Replacement satisfaction

Home warranty companies typically offer the option to replace your broken item with a similar make and model if they cannot repair it. Of the 432 participants who reported getting a replacement for their broken item, 95% were very satisfied or satisfied with the make and model their provider installed. The remaining 5% were neutral or very dissatisfied.

Repair success rate by provider

A final common pain point for consumers relates to home warranty companies’ service technician network — specifically, technicians’ lack of knowledge when it comes to successfully fixing their issue. We pulled each provider's average repair success rate and found that 61% of them repaired the participant’s issue within the first service visit. 

The table below provides a full breakdown of each company’s repair success rate.

Final take: Home warranties offer solid value for the money, as long as you follow their contractual provisions

Our survey of 1,000 homeowners who own a home warranty dispelled several of the most common negative themes we’ve encountered through reading hundreds of customer reviews for home warranty companies. It’s easy to mistrust home warranties when many customer reviews available are complaints.

However, there are reputable home warranty companies that provide a solution to unexpected appliance and system issues. Before signing up for a home warranty plan, we recommend reading their sample contracts to understand their coverage terms and limitations. 

In addition, request quotes from three companies to compare coverage options, costs and workmanship guarantees.