A home warranty provides coverage for essential appliances and major home systems, like HVAC and plumbing, that break down due to normal wear and tear. This type of service contract is designed to save homeowners money on repairs and replacements that can cost hundreds of dollars out of pocket.
The single biggest factor that affects the overall cost of a home warranty is the level of coverage you choose, as home warranty plans can range from basic to comprehensive.
How much is a home warranty?
The average home warranty plan is between $36 and $68 per month ($432 to $816 per year), according to our most recent cost analysis. Total yearly costs range between $264 and $1,425 per year, depending on the provider and level of coverage.
In addition to the cost of the plan, the warranty company charges a service call fee each time you file a claim that results in sending a contracted technician to your home. Service call fees, sometimes called deductibles, range from $55 to $150, depending on your contract.
Typically, the higher your service call fee, the cheaper your monthly or annual premium will be. Most providers offer a repair guarantee that prevents you from paying a service call fee more than once in a specified time period if a repair isn’t successful and a contractor has to return. Look for language in the contract about the length of this period, which is usually 30 to 90 days.
|Average monthly cost||Average annual cost|
|Appliance protection plan||$30 to $45||$360 to $540|
|Systems protection plan||$30 to $45||$360 to $540|
|Comprehensive (combo) plan||$49 to $70||$546 to $1,425|
Home warranty price comparison
As of publishing, the best-rated home warranty companies on our site include American Home Shield, Select Home Warranty, American Residential Warranty, HomeServe and America’s 1st Choice Home Club.
Below, we compare monthly premium ranges, average monthly costs for combo plans and service fees (as of publishing).
|Monthly premium||Average combo plan||Service fee||Learn more|
|American Home Shield||$29.99 to $69.99||$60||$75, $100 or $125||Read reviews|
|Select Home Warranty||$57 to $63||$63||$75 or $100||Read reviews|
|American Residential Warranty||$34.99 to $124.99||$60||$55||Read reviews|
|HomeServe||$7.99 to $58.33||$58.33||$100||Read reviews|
|America’s 1st Choice Home Club||$32.08 to $55||$55||$75, $100 or $125||Read reviews|
How much can you save on home repair costs?
To determine how much you can save with a home warranty, estimate the cost of repairing or replacing your appliances and systems and compare that with the annual cost of a home warranty plan (plus the service fee for each claim).
The typical repair on a major appliance ranges from $105 to $241, according to HomeAdvisor. Below, we compare major systems and appliances on average repair and replacement costs as well as life span.
|Typical repair cost*||Replacement cost range||Average life span**|
|Refrigerator or freezer||$200 to $330||$430 to $10,600||10 to 15 years|
|Oven or range||$100 to $430||$410 to $7,500||20 years|
|Dishwasher||$160 to $300||$330 to $1,900||9 to 10 years|
|Washing machine||$100 to $350||$445 to $2,300||11 to 14 years|
|Clothes dryer||$180||$445 to $2,100||8 to 12 years|
|Built-in microwave||$150||$200 to $2,000||10 years|
|Central air conditioning||$170 to $600||$3,900 to $7,500||Up to 15 years|
|Water heater||$220 to $955||$820 to $1,595||8 to 10 years|
|Garbage disposal||$250||$150 to $950||10 years|
*According to HomeAdvisor, as of publishing date.
**Appliance life span varies by make and model. Check with the manufacturer for specific details.
Pros and cons of home warranties
The most obvious benefit of a home warranty is the potential to save hundreds of dollars on repairs and replacements. When a covered item breaks down, you go online or call to file a claim, and the company finds a licensed contractor to send to your home.
However, many people with home warranties end up not using them, which is one potential downside. You should also consider the limitations and exclusions of the warranty contract, including payout caps and excluded components of covered items.
It’s important to keep in mind that a home warranty company will deny a claim if the breakdown isn’t covered under the terms of the agreement. Plans don’t cover preexisting conditions, and there’s usually a waiting period of 30 days before you can make a claim.
- Save money on major repairs
- Multiple plans and coverages
- No need to find a contractor
- Peace of mind
- Can’t pick your contractor
- Excluded parts and components
- Payout caps
- Might never use the coverage
Home warranty cost FAQ
- How much does a home warranty cost per year?
- According to our most recent price analysis, the average starting cost for a plan is $413.89 per year. On the high end, comprehensive coverage averages $799.82 per year.
Plans are typically 12-month contracts, and providers often give you the option of paying monthly or in full. You may qualify for discounts when you pay for a year upfront.
- How much does a home warranty cost per month?
- According to our most recent price analysis, the average starting cost for a basic plan is $36.32 per month. On the high end of the range, the average cost is $68.71 per month. Monthly costs vary by the home warranty company, the plan, whether you add on optional coverage, where you live, the size of your home and other factors.
- What is a service call fee?
- Service fees are similar to deductibles for home insurance. You pay this fee each time you make a claim and the home warranty company sends a contractor to your house. Service fees typically range from $55 to $150. The average service fee is $82 in 2021, according to our most recent price analysis.
- Is a home warranty part of closing costs?
- It depends. If the buyer and seller negotiated a warranty plan into the transaction, then it could be lumped into closing costs. If you get a plan after closing on a house, it’s not included in closing costs.
- Who pays for a home warranty: the buyer or seller?
- It depends. Homebuyers usually pay the bulk of closing costs, but they often negotiate with sellers to cover some of the costs (including the warranty plan). Sometimes, real estate agents provide a home warranty plan as a “thank you” for the transaction, according to Cinch Home Services.
In many cases, the seller pays for the warranty as an incentive for the buyer. If a warranty isn’t included in the home's purchase, the buyer may choose to purchase a plan on their own or negotiate the inclusion of a home warranty with the seller. A home warranty can be purchased at any time and does not need to be part of a home sale. For more, read about home warranties for sellers vs. buyers.
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