How Much Does a Home Warranty Cost?

By: Kealia Reynolds Buying a home, Home warranty

How much does a home warranty cost? Though pricing may vary due to the type of coverage you want, the cost of a home warranty is well worth it when it comes to protecting your major home systems and appliances. We’ll explain what a home warranty is, what it covers, and how much you can expect to pay.

What is a home warranty?

A home warranty is an annual service contract you pay for, usually at the time of purchasing a home, that covers the cost of repairing or replacing your major home appliances or systems if they break down from normal wear and tear.

Is a home warranty different than homeowners insurance?

Yes. While a home warranty covers repairs or replacements on home systems, homeowners insurance covers your house structure and personal belongings in the event of a fire, storm, flood, burglary, or other natural disaster. Home buyers are often required to purchase homeowners insurance in addition to a mortgage, but a home warranty is fully optional.

How much does a home warranty cost?

A home warranty typically costs around $300 for basic coverage and $600 for more comprehensive plans. However, the exact cost of your home warranty will depend on what type of coverage you opt for, where you live, and the home warranty company you buy from.

Additionally, a home warranty may not cover the entire repair or replacement needed, meaning that you’ll probably be contributing some out-of-pocket costs. The cost of repairing or replacing a system will depend solely on the type of coverage you have, so be sure to read the fine print before entering into a contract.

Home warranty coverage

Most home warranty companies offer multiple policies and different levels of coverage. Some home warranty providers even allow you to personalize your home warranty plan.

Basic home warranty coverage usually covers the following items:

  • Air conditioning units
  • Heating system
  • Ductwork
  • Plumbing system
  • Electrical system
  • Ceiling fans and exhaust fans
  • Doorbells
  • Burglar and fire alarm systems
  • Dishwasher and garbage disposal
  • Kitchen refrigerator
  • Oven or cooktop

Ask your real estate agent about getting a home inspection before purchasing a warranty to determine any pre-existing conditions that built-in appliances might have. These “known conditions” could be considered exclusions in your contract, so it’s a good idea to address these issues before securing a home warranty.

For a more comprehensive coverage plan, a home warranty could provide coverage for the following items:

  • Swimming pool and hot tub
  • Home spa
  • Washer and dryer
  • Garage door opener
  • Septic tank plumbing

How does a home warranty work?

If one of your home systems or appliances needs a repair, call your home warranty company as soon as possible. Here’s what you can expect when you need a repair or replacement.

  1. After you call the home warranty company, a service representative at the company will call a trusted local service provider to address the issue.
  2. After the technician is contacted, he or she will set up an appointment to inspect your broken appliance or system. It can take an average of 3–5 days for the technician to address the issue.
  3. Once an appointment is scheduled, the service provider will arrive to your house, diagnose the problem, and send a repair or replacement request to the home warranty company. Note that repair claims may be denied due to improper maintenance, code violations, unusual wear and tear, and improper installation.
  4. Expect to pay a small trade service fee to the home warranty company for sending a contractor to the home to diagnose the issue. This service call fee will typically cost $75–$125.
  5. The contractor will schedule a follow-up appointment to fix the broken system or appliance. If a replacement is necessary, the contractor will replace and install a new appliance, depending on your home warranty coverage. Be sure to read the fine print on your home warranty because many home warranties don’t include the cost of removing and hauling away old equipment.

Is a home warranty worth it?

Though homeowners insurance may cover some issues faced by homeowners, a home warranty plan provides complete protection over home systems and appliances. Though we recommend home warranty plans for anyone who owns a home, we especially recommend purchasing a home warranty for first-time homebuyers with no experience in owning a home.

Home warranty plans also make sense for people who don’t feel confident making repairs or installing new systems on their own. It’s a time-saver for those who don’t have the time to research different contractors and hire a skilled individual to make a repair or replacement.

How to find the best home warranty

Before buying a home warranty, do your research. Read consumer reviews to compare home warranty providers, BBB ratings and complaints, customer satisfaction, coverage, exclusions, and home warranty features. Consumer home warranty reviews tend to be subjective while third-party reviews tend to be objective, and both are helpful when making a decision. You should also ask your family, friends, and neighbors about their home warranty and get insight on which providers they prefer.


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