Home repair insurance—also known as a home warranty—is an optional service agreement that saves homeowners money on repair and replacement costs when a household appliance or system fails or malfunctions. Covered items typically include clothes washers and dryers, dishwashers, refrigerators, HVAC, electrical, plumbing, and more. You can even get coverage options for septic systems from some companies if you need one. Homeowners use these machines on a daily basis—sometimes several times a day, so it’s inevitable that they will eventually wear down and break. And when they do, it’s expensive and stressful.
There are different types of home protection options that can cover costly home repairs—home repair insurance or a home warranty, homeowners insurance, utility insurance, and a manufacturer’s warranty. They all sound similar, but each is useful in different scenarios. Read our guide below to learn about all four insurance plans—from cost and coverage to the best home warranty companies and answers to customers’ frequently asked questions—and find out how to choose the right home repair plan for you.
What is covered by home repair insurance?
Home repair insurance only covers items that are explicitly written into the contract that have broken from normal wear and tear. Most home warranty providers have three levels of coverage. Basic plans cover everyday appliances and/or systems such as dishwashers and garage door openers. You can upgrade to an enhanced plan that includes coverage for additional items like a jetted bathtub or a clothes washer and dryer. You can also customize your plan with optional add-ons for special features like a well pump or guest house.
Here are some common appliances that are covered under home repair insurance:
| Cost to repair | Cost to replace | Average savings | |
| Heating system | $285 | $4,249 | $1,500 |
| Air conditioner | $347 | $5,413 | $1,500 |
| Plumbing system & stoppage | $305 | $1,038 | $643 |
| Sewer line | $2,560 | $2,892 | $416 |
| Electrical system | $317 | $1,287 | $500 |
| Water heater | $546 | $1,065 | $1,037 |
| Refrigerator | $310 | $1,925 | $1,306 |
| Oven/range/stove/cooktop | $150 | $1,675 | $1,607 |
| Clothes washer | $310 | $1,250 | $1,466 |
| Clothes dryer | $250 | $1,075 | $1,466 |
What do home warranties not cover?
Coverage caps
As seen in the table above, most home warranties will cap coverage at a certain dollar amount. For instance, your home repair insurance may cover a septic tank repair up to $162, leaving you to pay for the remaining $1,378. As you can see, a home warranty may not cover the full cost of repair or replacement, but homeowners will still save some money in the end. Additionally, some home warranty companies will cap coverage at a certain amount per claim or per year. Carefully read your sample contract before you buy home repair insurance.
Pre-existing conditions
Most home repair insurance providers will not cover pre-existing conditions that are known to the homeowner. Although you do not need a home inspection to get home warranty coverage, an inspection may be helpful in the case that you must prove a condition is unknown to you. To reduce this risk, companies will enforce a 30-day waiting period between signing up and when coverage actually begins.
Poor installation or maintenance
Many home warranty companies do not cover appliances or systems that have been installed incorrectly or not well-maintained. Note: rust and corrosion fall into the preventative maintenance category that homeowners are responsible for—not the home warranty. Home buyers should have their systems and appliances evaluated by your realtor to verify that they’re in working condition before they sign up for home repair insurance. If appliances are included in a home sale, buyers should request receipts of service from the sellers to provide the home repair insurance company if necessary.
Brand, dimensions, and color
Unlike manufacturers, home repair insurance providers are not liable for matching the brand, dimensions, or color of covered appliances or systems. They will only offer a replacement of the same standard. However, some providers will match energy efficiency.
How much is home warranty insurance?
Home warranty insurance costs $25 to $67 per month on average. You should expect to pay upwards of $50 for more comprehensive coverage that protects additional items like a freestanding ice maker or well pump. However, you may be able to get a cheaper home warranty by building your own plan and only paying for custom coverage of a small group of select items. Additionally, whenever you submit a claim for service, you’ll likely pay a service fee that ranges between $75 and $125.
The total cost of home repair insurance depends on the provider you purchase the coverage from, the amount of coverage you want, and where you live. Note: the size and age of your home, appliances, and systems should not affect coverage or costs unless you live in a brand new home or one that’s larger than 5,000 square feet.
How to make a service request
The majority of home repair insurance providers strive for responsive service. Many of them will schedule an appointment with a technician within 48 hours of receiving the homeowner’s claim. As with all home services, this process could take longer on weekends and holidays and it’s up to the company to decide whether your claim is an emergency—not you. Therefore, you should contact your home warranty company as soon as an issue arises to expedite the process. Most providers prefer to receive claims within three days of an item breaking. To submit a service request, you can call the company’s customer service line or file a claim online. Here’s a checklist we recommend:
- Do check your contract to make sure the broken item is covered and meets the criteria of normal wear and tear, proper installation, and routine maintenance.
- Do file a claim as soon as a covered item fails or malfunctions.
- Don’t hire your own contractor. One of the luxuries of a home warranty is access to a network of vetted service providers in your area. The home warranty provider will schedule service with one of their pre-approved contractors for you.
- Do prepare to pay the technician a service fee at the time of service.
- Do ask if you will be charged a service fee for repeat visits if the problem persists. The answer to this should be no. Most repairs should be guaranteed for 30 to 90 days.
- Do ask whether the provider will replace an item it cannot repair, but don’t expect them to match the replacement to the make or model of your old appliance.
Do I need home repair insurance?
While home repair insurance is optional, it can save customers thousands of dollars and ease their minds about costly repairs and replacements. It’s inevitable that our home’s core components will eventually wear down and break, so Today’s Homeowner recommends home repair insurance to all homeowners, especially first-time home buyers and owners of older homes.
By closing day, first-time home buyers are overwhelmed and often over budget. To ease an anxious buyer’s mind of potential repairs they’re now responsible for, we suggest scrounging up $30 a month for a basic home protection plan—less than the price of dinner for two. Customers can always cancel after they’ve settled in.
Owners of older homes should also take advantage of home repair insurance. Most home warranties cover appliances and systems regardless of age. As long as they were properly installed and are well-maintained, a home protection plan is a great birthday gift to decade-old appliances. Today’s Homeowner has awarded Choice Home Warranty as the best home repair insurance provider for older homes.
Home sellers, realtors, and rental property owners can all benefit from home repair insurance as well. Home warranty coverage is a great marketing tool and a cost-effective solution to streamlining maintenance.
What is the best home repair insurance?
Before buying home repair insurance, you should compare home warranty companies until you’re confident that the one you choose is the right plan for you and your wallet. Today’s Homeowner did the research for our readers to save you time and money. We called companies, asked agents a laundry list of questions, and negotiated quotes to find out how low they would go. We also reviewed the best home warranties based on ratings and reviews from customers, accredited organizations, and other review sites like ours.
Frequently Asked Questions
Does a home warranty cover a septic system?
Yes, some home warranties cover parts of a septic system. Sewage ejector pumps are often covered, but sewer lines are only sometimes covered and septic tanks are rarely covered. Related items like plumbing and plumbing stoppages, toilets, and well and sump pumps are commonly covered or at least offered for an extra fee.
Are septic problems covered by insurance?
Some septic problems are covered by home repair insurance such as a home warranty, but they are not covered by homeowners insurance unless the septic system is damaged in an event the policy deems perilous, such as a fire.
Note: You’ll likely have to purchase flood insurance in addition to your homeowners insurance.
Look into whether your local utility providers have an insurance policy. Utility insurance covers emergency water line repair and septic problems may fall into that category.
Do home warranties cover roof replacements?
Roof replacements are not usually covered in home warranties. However, roof leaks are covered in some comprehensive plans or as add-ons to basic plans.
Is foundation repair covered by a home warranty?
No, foundation repairs are not covered by any home warranties. However, foundation damage may be covered by homeowners insurance in certain events your policy states.
Does a home warranty cover mold?
No, a home warranty does not cover mold. Mold prevention, removal, and treatment are considered preventative maintenance and, therefore, not covered by home warranty companies.
Will my home warranty replace my AC unit?
Yes, most home warranties will replace your AC unit if it is covered in your contract. Air conditioning is typically covered under standard coverage or basic plans.
Air conditioners cost $347 to repair and $4,249 to replace. Fortunately, the average payout from home warranty companies is $1,500 on air conditioners. You could save $272 (the repair cost minus the service fee) to $1,500 on a new AC unit.
Some exclusions—like improper installation or unusual wear and tear—may prevent your home warranty provider from repairing or replacing an air conditioner though.
