Buyer guide

How to choose a home warranty company or home inspector

Two different purchases around the same transaction: a service contract for future repairs and a one-time inspection of the home today.

Published 2026-10-21. All guides · Home services hub

Our perspective

A home warranty is a promise to pay later, so the contract and the company’s record matter more than the brochure. The FTC describes home warranties as service contracts and suggests checking hidden costs, limits, cancellation terms and the claims process. (FTC Consumer Advice, “So what’s the deal with ‘home warranties’?” (Feb 24, 2023)) Our home-services score weighs the legal and regulatory record most (30%) and rewards companies that disclose their claims ratio. Inspections are regulated state by state; in Texas, for example, licensed inspectors must follow TREC’s Standards of Practice and use its report form, and the state’s license search shows disciplinary history. (Texas Real Estate Commission, What Consumers Should Know About Texas Property Inspections)

Checklist

(Warranty) Read the full contract: covered systems and appliances, exclusions, reimbursement limits, service fees and cancellation terms. (FTC Consumer Advice, “So what’s the deal with ‘home warranties’?” (Feb 24, 2023))
(Warranty) Check whether a builder warranty, product warranty or other coverage already applies. (FTC Consumer Advice, Warranties for New Homes)
(Warranty) Search the company name with “review” or “complaint”, and check its regulatory and court record on our profiles. (FTC Consumer Advice, “So what’s the deal with ‘home warranties’?” (Feb 24, 2023))
(Inspector) Check the inspector’s license where your state requires one, and any disciplinary history. (Texas Real Estate Commission, What Consumers Should Know About Texas Property Inspections)
(Inspector) Ask which standard of practice the inspection follows and get a sample report.
(Inspector) Ask whether the inspector has any relationship with your agent or the seller’s agent.

Questions to ask

(Warranty) What is the fee per service call, and what is the most you will pay for each system?
(Warranty) How do you choose contractors, and can I use my own?
(Warranty) How long does a typical claim take from call to repair?
(Inspector) What is excluded from your inspection, and do you recommend specialists (sewer scope, pest, roof) for this home?
(Inspector) When will I get the report, and will you walk me through it?

Red flags worth clarifying

None of these proves a problem on its own. Each is a reason to ask for an explanation in writing before you sign.

(Warranty) Coverage limits or exclusions you only learn about when filing a claim.
(Warranty) Unwanted calls about service contracts; the FTC warns these might be telemarketers looking for money or personal information. (FTC Consumer Advice, “So what’s the deal with ‘home warranties’?” (Feb 24, 2023))
(Inspector) An abbreviated walkthrough offered in place of a full report; TREC warns that walkthrough inspections in Texas do not typically follow its requirements. (Texas Real Estate Commission, What Consumers Should Know About Texas Property Inspections)
(Inspector) Pressure to skip specialist inspections the inspector flags.
(Inspector) A relationship with an agent that is not disclosed.

What the public record can and can’t tell you

Can show

Revenue, margins, claims ratios and disclosed legal matters of public warranty companies (10-K)
Standards of practice and membership rules of inspector associations
Inspector license status where a state licenses inspectors

Can’t show

Whether a specific claim will be approved
The skill of an individual inspector
Records of private warranty companies

How our scores work here

Firms here get a public-record score: a number out of 10 with its breakdown, built only from audited filings, regulator and court records, and rankings researched by third parties. Criteria and weights: Revenue growth (25%); Profitability (25%); Claims-cost transparency (20%); Legal and regulatory record (30%). Today 2 of the 6 firms we profile in this section can be scored; the others show “Not yet scored”, which means the public record does not cover every criterion. It says nothing about service quality. We attach no label, tier or recommendation to a score, and a lower number is not a judgment of how a firm treats clients. Use it to see what is documented, then do the checks below.

Explore

Home services hub · Home warranty · Home inspection · Repair plans · Frontdoor (American Home Shield) · First American Home Warranty · Choice Home Warranty · HomeServe · ASHI · InterNACHI · Frontdoor vs First American Home Warranty · Frontdoor vs Choice Home Warranty · ASHI vs InterNACHI · Homebuilder guide

Questions

Is a home warranty the same as a warranty?

The FTC says so-called home warranties are really service contracts: they cost extra and typically cover repair or replacement of items such as appliances or air conditioning for a set period.

Do I need an inspection if I buy a warranty?

They do different jobs. An inspection documents the condition of the home at the time of inspection; a warranty may cover some future repairs under its terms.

Are home inspectors licensed?

Some states license inspectors and set standards of practice (Texas is one example); rules differ elsewhere. Check your state.

What does the home-services score measure?

Revenue growth, profitability, claims-cost transparency and the legal and regulatory record. A number out of 10, not a recommendation.

Regulatory and legal points summarize the linked primary sources as read on 2026-10-21. Rules vary by state and change over time; this guide is general information, not legal or financial advice.

Sources

FTC Consumer Advice, “So what’s the deal with ‘home warranties’?” (Feb 24, 2023) · accessed 2026-10-20
FTC Consumer Advice, Warranties for New Homes · accessed 2026-10-20
Texas Real Estate Commission, What Consumers Should Know About Texas Property Inspections · accessed 2026-10-20

Last verified 2026-10-21. Figures were re-read from the linked sources that day.

View changelog

2026-10-21 Guide published.