Home Warranty Cost: What You Need to Know Before You Buy

If you’re like the average homeowner, you’ve heard of home warranties but never really explored their benefits. It can often feel like a major commitment to buy one, since they come with an initial cost that might make you hesitate. But if you’ve ever had to pay an enormous amount of money for an unexpected home repair, like a broken water heater, you know that protecting your biggest investment can be a great way to save you long-term headaches. That’s why it’s important to make sure you understand home warranty costs before you go ahead and purchase one. Let’s dive into what you need to know.

The cost of a home warranty will vary based on the coverage and length of the policy you choose. Depending on these factors, a home warranty can cost anywhere from $30-$50 per month.

What is a Home Warranty?

A home warranty is a service contract that promises to cover the cost of repairing or replacing major appliances and home systems such as air conditioning, plumbing, electrical systems and/or major mechanical components. It generally covers items that are not covered by your homeowner’s insurance policy, meaning it can provide additional protection against unexpected repair costs. Home warranties often also come with a variety of additional benefits such as discounts, technical support and advice.

Arguments for a home warranty are that they can provide financial protection in the event of an emergency repair or replacement. They may also help keep your house value up and reduce stress around managing repairs. On the other hand, one argument against home warranties is that they often require you to pay an upfront fee or annual premium, which may be expensive depending on the type of coverage you choose.

The potential benefits of purchasing a home warranty must be weighed against the associated costs. In order to make an informed decision about whether or not a home warranty is right for you, it is important to understand what exactly it covers and how much it will cost. With this in mind, let’s look at what a typical home warranty might cover in our next section: What Does a Home Warranty Cover?

What Does a Home Warranty Cover?

When considering a home warranty, it is important to understand what they cover. Home warranties are designed to cover the cost of repairs and replacements for many major appliances in your home. This can include things like HVAC systems, refrigerators, dishwashers, ovens and stoves. Depending on the plan purchased, items like plumbing fixtures and pool equipment may also be included.

It is important to note that there are a few limitations to home warranties. Homeowners should always read their contracts thoroughly and be aware of any exclusions that may apply. It is also important to understand what types of problems the warranty will cover before signing up for a plan. While some damages may be covered by your policy, others may not be.

In addition, many homeowners should consider the fact that with most warranties there is usually a service fee or deductible associated with each repair request. Homeowners should make sure that they are aware of this fee as it will likely add to the overall cost of repairs and replacements.

Finally, most warranties also have maximum dollar limits for each item covered under the warranty, so it is important for homeowners to familiarize themselves with these limits before making a purchase decision.


Some may argue that home warranties offer peace of mind when dealing with expensive repairs, while others may counter that they can become too costly over time due to service fees and deductibles. Both sides agree that homeowners should carefully read their contract in order to understand what they are getting before they purchase a policy.

To conclude, it is important for homeowners to weigh the pros and cons of purchasing a home warranty before making their decision as they will need to factor in potential service fees and deductibles along with maximum coverage amounts when deciding whether or not it’s worth the added expense.

Now let’s move on to discuss “Appliances and Major Systems” – the types of appliances typically covered by home warranties, differences between types of plans available, and what questions you should ask when shopping for coverage.

Appliances and Major Systems

When considering home warranty cost, appliances and major systems are two of the most important investments to consider protecting. Home appliances, including refrigeration, ovens, dishwashers, microwaves, sprinkler systems and washer/drier combinations can incur huge repair costs if they fail without a warranty in place. Major systems like HVAC and electrical components may need additional protection from specialized warranties due to their complexity and component parts.

On one hand, a home warranty can provide peace of mind that your appliances and systems are protected from the unexpected expense of costly repairs or replacements. Homeowners who anticipate frequent moves may particularly find value in the added protection. On the other hand, some homeowners may be better served by researching extended warranties for their appliances and major systems to ensure the best coverage for their needs at an affordable cost.

It’s important to weigh both sides when considering appliance and system maintenance costs as this may ultimately shift your decision regarding whether or not you take out a home warranty. The next section will discuss home warranty cost in more detail so you can make an informed decision that fits within your budget.

  • On average, a home warranty plan costs around $500-600 for the base plan and up to $800-900 for optional upgrades.
  • According to the National Association of Home Builders, 68% of new-home buyers purchase a home warranty policy to cover major breakdowns.
  • The average service call fee for a home warranty is between $75 and $125 per visit, depending on the provider.

Home Warranty Cost

Home warranty cost can vary greatly depending on the type of coverage selected, the number of items included in the plan, and the repair technician chosen to carry out the service. While these are important factors to consider when selecting coverage, there are other elements involved as well. One of these is whether or not a home warranty is worth the cost. The answer to this question depends largely on the individual’s homeowner needs.

On one side of the argument, a home warranty offers peace-of-mind protection against costly repairs that could arise due to breakdowns of major systems and appliances in a home. Homeowners who opt for a warranty plan may also benefit from discounts on services and repairs covered under their plan in addition to an overall level of coverage they may not get with other insurance policies.

On the other hand, homeowners can weigh whether or not investing in a home warranty is actually necessary based on their needs and budget. For example, many things covered may already be included under warranties issued by manufacturers; this information can be readily found online with little effort. Also, regular maintenance and upkeep of home systems and appliances can prevent unexpected repair costs from arising due to negligence or lack of timely maintenance.

In either case, it is important for homeowners to thoroughly compare various warranty plans available and determine what level of coverage best fits their needs and budget before purchasing a home warranty plan. With all this in mind, it is time to consider monthly plan costs when looking into home warranties for purchase.

Monthly Plan Costs

When it comes to home warranty cost, most plans generally require a single payment for the year and additional payments that cover specific repairs and replacements. However, some companies do offer monthly payment plans to make the initial investment easier on homeowners. These plans typically range from $25 to $45 per month and have an initial setup charge of up to $250.

On the one hand, these plans can help homeowners spread out the financial burden of purchasing a home warranty over the course of many months. They are also beneficial for those who do not have access to large amounts of cash or who may benefit from budgeting the cost of a home warranty into their regular expenses. Plus, some companies offer discounts or fees waived if you purchase an annual plan instead of a monthly plan.

On the other hand, paying for a home warranty through monthly installments may actually end up costing more than if you had taken advantage of discounts available when paying annually. Additionally, certain costs can vary significantly between monthly plans and annual packages – such as service call fee reimbursements and coverage limits – so it’s important to compare multiple options before settling on one particular plan.

Whatever route you choose to take, it’s essential to read through your home warranty contract carefully prior to making any contractual commitment – even if it’s just for a few months. With that said, let’s move on to examining various types of home warranty providers and plans available on the market today.

Home Warranty Providers and Plans

Home warranty providers typically have various plans that cover different components of the home submitted in a claim. Home warranties also provide protection against certain breakdowns and malfunctions of systems and appliances that occur due to normal usage, with some policies covering major systems and/or appliances, while others just cover one or two specific items.

When selecting a plan, it is important to compare coverage options and costs among the different providers. A particular plan may offer more limited coverage than another, yet be more expensive; or, conversely, the same coverage may be included in two plans but at different costs. The best combination of coverage and cost should be carefully evaluated before making a decision.

Before signing up for any home warranty policy, make sure it is clear as to what it does and does not cover. Be aware that many home warranty policies exclude pre-existing conditions, cosmetic damage caused by wear and tear, failure to properly maintain items on the home warranty’s list, code upgrades for systems that do not meet current health and safety regulations, damages due to acts of God (such as floods).

It is also important to read the fine print carefully when it comes to filing claims, understanding response times and service fees. Many home warranties will require service fees for any repairs within the first thirty days; these fees will range from $50 to $125 depending on the provider. Additionally, there may be service restrictions with regards to timing (i.e., same-day versus next-day services) and availability of technicians in certain geographic locations. Make sure you know what you’re getting into before choosing a plan.

Home warranty providers are generally reputable businesses that work hard to meet their customers’ needs and can play an important role in helping immediately solve problems associated with equipment and system failures due to normal wear and tear or age-related maintenance issues with home systems or appliances.

Whether or not a home warranty is worth the cost is ultimately up for debate—there are both pros and cons to consider—but for some homeowners it can help provide peace of mind knowing that if something goes wrong then they have insurance coverage available to help them get it fixed quickly.

Now that we’ve discussed home warranty providers and plans, let’s move on to the next section where we’ll go over how to compare providers and plans.

Most Important Highlights

Home warranty providers offer different plans that cover various components of the home. When selecting a plan, it is important to compare coverage options and costs between providers. It is also essential to read the fine print regarding filing claims, response times, fees and service restrictions. Home warranty providers are generally reputable businesses that have the capacity to quickly repair any damages caused by normal wear and tear or age-related maintenance issues with home systems or appliances. Whether or not opting for a home warranty is worth the cost is ultimately up to the homeowner.

Comparing Providers and Plans

It is important to compare providers and plans when researching home warranty cost. Different companies offer different service contracts, so it is essential to shop around and compare the various coverage options, specs, discounts, and customer satisfaction ratings.

When evaluating a home warranty plan, consider the following:

The cost of the coverage, which may include an annual fee as well as fees for each service call plus any applicable taxes.

Be aware that while basic coverage may appear inexpensive, additional endorsements could significantly increase your premium; therefore check to see what features are included in each service plan before purchasing.

Look into company licensure, experience, and claims payment track record. Review customer feedback from people who have already purchased or used the plan you’re interested in. Additionally ask insurance experts for advice on selecting a home warranty provider and plan.

Find out about restrictions for emergency service calls, such as minimum response times or extra charges for expedited services. You may want a company that can dispatch its technicians quickly if you live in an area with dramatic weather swings or climate extremes such as hurricanes or tornados.

Make sure to read all terms of the contract including coverage limits, exclusions for certain problems (such as damages caused by floods), acceptable repair methods (for example replacement versus repair), transferability (if you sell your house during the policy period) and more. Homeowners should also investigate whether they need to use contractors approved by the home warranty provider and check out consumer advocacy websites which can explain some of the fine print in these types of contracts.

Comparing providers and plans can be tedious work; however it will be time well spent once you have selected the right protection plan for your home and budget. With this research completed you are now ready to assess replacement versus repair costs – something we will examine next in this article.

Replacement vs. Repair Costs

When it comes to home warranties, the cost of repair vs. replacement is a major point of consideration. In order to determine whether a home warranty is worth the cost, it is important to understand the differences between repairing and replacing items covered by the warranty.

Repair costs typically involve parts and labor to fix a broken or malfunctioning item. This type of coverage usually covers less, but is often more affordable compared to replacement coverage. For example, if an appliance breaks down and needs fixing, a homeowner could pay for repairs in order to get the appliance up and running again without having to replace it outright.

On the other hand, replacement costs typically involve replacing an item with a brand new one if it cannot be fixed or becomes too costly to repair. Replacing an item in this situation may be convenient since it is quick, but also much more expensive than repairing something that is broken. Replacement coverage often includes higher limits on the amount of money that can be spent for replacements in comparison to repairs.

It’s important for homeowners to consider both repair and replacement costs when evaluating any home warranty policy so they can make sure their specific needs are properly covered with the right level of protection. Understanding these two key concepts will help homeowners make the most informed decision possible when deciding whether a home warranty is worth the cost.

Now that we’ve discussed repair versus replacement costs, let’s explore some of the final considerations involved in determining if a home warranty is worth the cost in our next section: “Final Considerations: Is a Home Warranty Worth the Cost?”

Final Considerations: Is a Home Warranty Worth the Cost?

When considering if a home warranty is worth the cost, homeowners should think about the amount of peace of mind and protection that the warranty provides. On-going maintenance of appliances and systems can be costly; however, having a home warranty in place helps cover the costs associated with repair or replacement due to unexpected breakdowns.

The specific terms and conditions of each home warranty plan are essential considerations before signing up. Homeowners should read through the details to ensure they understand what’s included, how claims are handled, and any limitations that may apply. Researching companies offering home warranties is also important to make sure they’re reputable and offer clear communication regarding their services.

Homeowners should also factor in unused home warranty coverage into their cost analysis. In some cases, individuals may decide not to use a warranty because they already have reliable appliances, updated systems and/or can handle repairs themselves; if this is the case, then there would be no need for a warranty and it’s certainly not worth the cost.

On the other hand, if a homeowner knows that older items are on their way out or that major repairs will become unavoidable in the near future, then getting a home warranty could be beneficial. Knowing that unexpected breakdowns are covered can save an individual from the financial burden in certain situations.

In summary, homeowners should take into account their current setup and long-term plans for repairs when debating whether or not a home warranty is worth the cost. It can provide immense peace of mind, but it won’t necessarily be beneficial if there’s nothing to cover or if any existing issues could easily be fixed without utilizing a policy. Ultimately, depending on how much money needs to be allocated towards potential repairs in the future, homeowners must decide whether or not a home warranty is right for them given all other factors at play.

Commonly Asked Questions

Are there any discounts available for buying a home warranty?

Yes, there are discounts available for buying a home warranty. Many providers offer discounts for customers who purchase multiple warranties or bundle their existing warranties with other services, such as home and auto insurance. Additionally, some providers may offer loyalty program discounts to customers who have purchased their warranties in the past. Other discounts may be offered seasonally or through promotional offers. It’s always a good idea to ask your provider to see if they can offer you any special deals on home warranties.

What does a home warranty cover?

A home warranty typically covers major components such as heating and cooling systems, plumbing systems, electrical systems, and major appliances. Depending on what type of warranty you purchase, it may also cover items like detached structures (e.g garages or sheds), swimming pools, sprinkler systems, septic tanks, and more. Generally speaking, the purpose of a home warranty is to provide coverage for unexpected repairs or replacements of covered items due to normal wear and tear. Home warranties are similar to extended warranties offered when purchasing new appliances or electronics – they’re there to cover unexpected but potentially costly repairs should they arise.

What is the average cost of a home warranty?

The average cost of a home warranty will depend on the type and level of coverage you get, as well as the specific provider that you choose. Generally, however, budget-conscious homeowners can expect to pay between $250 and $600 for an annual plan, plus any upfront service fees. Low-end plans may have lower prices but also fewer benefits, so it’s important to read the fine print before signing up for any warranty. Additionally, certain features like high deductible options, extended appliance coverage and itemized exclusions can all have an impact on the final cost. Ultimately, when considering a home warranty, it’s important to shop around to find the best option for your needs and budget.






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