Let’s face it: When we use basic appliances every day they’re likely to experience issues from time to time — especially as they age. The cost to repair or replace these appliances can quickly add up, which is why a home warranty can be an appealing option. A home warranty covers the costs to repair or replace your major home systems and appliances when they break down from regular, everyday use.
We’ve highlighted the cheapest home warranties of the year and what you need to keep in mind when selecting a home warranty plan that’s right for you.
Below, we compare five of the cheapest home warranty companies rated above 3.5 stars on our site. Service fees differ based on the coverage plan you choose, but monthly premiums start around $40 or less. All of our top picks offer combo plans that average less than $60 per month.
Prices are based on a quote for a house of less than 5,000 square feet in Austin, Texas. To find the top affordable home warranties, we compared 15 popular providers on the following factors:
The ConsumerAffairs Research Team also analyzed more than 6,500 recent verified reviews. To make our final selections, we gave preference to companies rated above 3.5 stars on our site.
| Company | Customer rating | Starting cost* | Average combo plan cost* | Service fee* | Roof leak add-on | |
|---|---|---|---|---|---|---|
 First American Home Warranty | Get a Quote | 4.0 | $42 | $48.50 per month | $100 or $125 | Add-on |
 ARW Home | Get a Quote | 4.2 | $39.99 | $60 per month | $125 | Add-on |
 HomeServe | Learn More | 1.5 | $3.99 | $58.33 per month | Varies | No |
 Choice Home Warranty | Get a Quote | 4.0 | $49.17 | $54.75 per month | $100 | Add-on |
 American Home Shield | Get a Quote | 3.7 | $29.99 | $60 a month | $100 or $125 | Add-on |
The cost of basic home warranty plans starts around $20 or $30 per month. On average, it costs $50 per month for comprehensive coverage, which protects both systems and appliances. The average annual cost ranges from $350 to $700.
On top of the plan cost, you should also expect to pay a service fee any time a technician is sent to your home. Most service fees range from $75 to $150.
» WEIGH THE PROS AND CONS: Is a home warranty worth it?
The total cost of a home warranty is made up of a monthly or annual premium and any service fees you need to pay when you make a claim and a contractor visits your home to diagnose the problem.
The main factors that companies use when determining the cost of their plans include:
» LEARN: What does a home warranty cover?
| Appliance/system | Replacement cost |
|---|---|
| Dishwasher | $370 to $3,500 (not including a $150 to $350 cost to remove an old dishwasher) |
| Washing machine | $500 to $1,000 |
| Garbage disposal | $250 to $625 |
| Oven | $500 to $2,500 |
| Central air conditioner | $3,500 to $8,000 |
| Water heater | $800 to $3,000 |
Cost matters when you’re choosing a home warranty. However, you also want to be sure you select a reputable provider that offers the right coverage for your home.
Consider these factors when making your decision.
Shri Ganeshram, CEO of Awning, a real estate platform that helps investors find, finance, insure, design and operate real estate, gave us this advice: “Look fоr cоmpanies that оffer customizable cоverage options, cleаr communication, аnd a strоng trаck recоrd оf сustomer satisfaction. Remember, investing in a solid hоme wаrrаnty cаn be thе diffеrеncе bеtwееn a minor inсonvenienсe аnd a majоr finаnciаl sеtback.
Remember, investing in a solid hоme wаrrаnty cаn be thе diffеrеncе bеtwееn a minor inсonvenienсe аnd a majоr finаnciаl sеtback.
Before you purchase a home warranty, it’s important to know what red flags to avoid. Read reviews and look out for warning signs like a slow claims process or limited service network.
Previous and current customers can tell you a lot about a company. If there’s a large number of reviews that mention difficulty with filing claims, denied claims, poor repairs or bad customer service, you should look elsewhere.
Don't gloss over the fine print in your home warranty contract — you should read it to ensure it provides what you need. The contract should cover the topics below, and you should make sure the terms meet your expectations so there are no surprises. Here are some of the questions to ask before buying a home warranty:
Home warranties are typically worth the cost, but it depends on the condition of your home appliances and systems. Older appliances and systems may be more likely to experience issues or break. In these common cases, a home warranty can potentially save homeowners a significant amount. A home warranty, at the very least, can provide reassurance that any damage or breakdown of a home appliance or system has coverage.
Home warranties don’t cover appliance or system issues that result from human error. That means if an appliance or system isn’t properly maintained or has any preexisting conditions, a home warranty will not cover repairs needed as a result. They can also add up, and if your appliances are not relatively old, the price tag of a home warranty may not be worth it.
Both home warranties and homeowners insurance provide coverage, but what they specifically cover is the main difference. A home warranty helps cover repairs or replacements to major appliances and systems from everyday use. Home insurance, covers damage or destruction done by perils. Appliances like dishwashers, dryers and AC systems are covered by a home warranty. Home insurance covers the physical structure of a home, personal property and other structures like garages or sheds. Home insurance is also typically a requirement by mortgage companies for a home loan, whereas a home warranty is a service contract.
Yes, many home warranty companies allow you to transfer your warranty to the new owner if you sell your home or take it with you to your new property. However, it’s important to check the specific terms and conditions with your provider before making a move.
Yes, you can typically cancel a home warranty. Most companies allow cancellations, but the process and any associated fees vary by provider. Some companies may offer a prorated refund, while others might charge a cancellation fee. It’s important to read the contract carefully and contact customer service to understand the specific terms of cancellation.
