How Much Does a Home Warranty Cost?

How much is a home warranty?

How much a home warranty is generally depends on the type of plan you choose, your location and your provider. Home warranty costs typically range from $350 to $900 per year, or about $30 to $90 per month.

You can typically save money by purchasing an annual plan instead of a monthly plan.

Home warranty contracts usually last 12 months, and most providers allow monthly or annual payments. Many companies offer discounts if you opt for an annual plan instead of a monthly plan. With an annual plan, you may save up to $200 in total costs.

Home warranty companies also charge service call fees, which you’ll pay each time you make a claim with your home warranty company and a technician is sent to your home. Service call fees typically range from $50 to $150, but most tend to be around $100.

Home warranty cost factors

Some factors that can affect your home warranty costs include:

• Coverage type: Combined system and appliance plans tend to cost more than appliances-only or system-only coverage.
• Service fees: Selecting a higher service fee will lower your monthly premium.
• Add-on coverage: Adding coverage for items such as pools, septic systems or roofs will increase your home warranty cost.
• Home size: Some providers charge more coverage if you have a larger home.
• Home location: Home warranty costs vary by location.
• Home type: Single-family homes tend to have higher home warranty costs than townhomes or mobile homes.

Home warranty prices by plan type

Home warranty prices vary by the type of plan you choose, with premium plans tending to cost more than basic or mid-tier plans. Some plans may be systems-only or appliances-only plans, or else a combined systems and appliances plan.

Average cost for add-on coverage

The average cost for add-on coverage depends on the coverage you choose, though most costs tend to be below $10 per month. You can often choose add-on coverage for specific items like pools, spas or additional appliances.

Home warranty price comparison by provider

To compare home warranty prices by provider, we collected quotes from several top home warranty companies. The estimates below are based on a three-bedroom, two-bathroom house in Albuquerque, New Mexico.

How much do home warranties cost in different states?

Home warranty costs can range significantly in different states, with some states averaging $20 or $30 more per month. Factors such as local labor rates, the average age of housing stock and regional climate conditions can influence how much providers charge.

For example, American Home Shield quoted us $69.99 per month for its comprehensive ShieldPlatinum plan in Phoenix, Arizona. That same plan cost $139.99 in Bridgeport, Connecticut. However, Choice Home Warranty prices were generally consistent from state to state.

Average home warranty costs by state

The map below highlights the average home warranty costs by state across the U.S. Average home warranty costs are based on quotes we received for a three-bed, two-bath house in each state’s most populous city. Quotes vary by provider and city, so we gathered pricing from multiple locations nationwide.

How much can a home warranty save you on home repair costs?

To determine how much a home warranty can save you on repair costs, you’ll need to estimate the cost of repairing or replacing your appliances and systems and compare that with the annual or monthly cost of a home warranty plan, plus the service fee for each claim. Here are some steps to follow:

1. List out appliances and systems

Make a list of your appliances and systems, including how old they are, if they’re still under a manufacturer’s warranty and their current condition. Generally, if an item is more than 2 years old, it’s probably no longer under a standard warranty.

2. Assess breakdown risk

Determine which appliances and systems are at risk of a breakdown and would be expensive to replace. Generally, it can help to consider appliances and systems that are:

• Older, typically more than 8 years old
• Expensive to replace, such as an HVAC system
• Necessary to live comfortably, such as a water heater

3. Estimate repair or replacement costs

Estimate repair or replacement costs of all your at-risk items and compare these costs with the cost of a home warranty plan. The table below shows typical repair and replacement costs for different home systems and appliances.

The difference between the cost of repairs and replacements and the cost of a plan is the amount of money you can potentially save. A home warranty can be a worthwhile investment if you don’t have the savings to cover these types of expenses. Just don’t forget to factor in coverage limits and service call fees.

Home warranty pros and cons

Some home warranty pros and cons include:

How to choose a home warranty plan

To choose a home warranty plan that works for you, first evaluate your home’s condition and vulnerabilities so you can determine what type of coverage you might need. Then, you can start researching and comparing companies.

Research and compare companies

Research and compare companies based on plans, pricing, sample contracts and online reputations. It can help to read customer reviews online to see if customers generally have a hard time with the claim process or getting breakdowns covered. It’s also best to get quotes from at least three companies for the type of coverage you’re looking for.

Check contractor terms

You typically can’t pick your own contractor to make repairs. Instead, the company will choose a contractor from its network. However, most providers offer a repair guarantee, so you aren’t charged a service call fee more than once during a specified period if a repair isn’t successful and a contractor has to return. Look for language in a contract about the length of this period, which is usually 30 to 60 days.

Look for coverage limitations and exclusions

It’s important to consider the limitations and exclusions of the warranty contract, including excluded damages, payout caps and excluded components of covered items.

“When purchasing any product, it is always important for consumers to look at the coverage limitations and exclusions,” said Tom Keepers, executive director of the Service Contract Industry Council, an industry trade group. “For example, home service contracts typically exclude coverage for preexisting conditions, so the consumer should be aware of their home’s condition prior to purchasing a plan.”

Get the right coverage

Before you sign a contract, know which systems and appliances you want covered so you don’t end up paying for home warranty coverage you don’t need.

Are home warranties worth the cost?

Home warranties may be worth the cost for homeowners who want peace of mind or financial protection from costly repairs, since plans may pay for themselves after one major replacement or several smaller fixes. They can also be worth the cost for homeowners who don’t have substantial savings to pay for an unexpected and costly repair or replacement out of pocket.

Customer experiences

Customers on our site have reported varying experiences related to whether or not they think their home warranty plan is worth it.

For example, Travis, a reviewer from Arizona said that they saved money on repairs with a home warranty.

“So far, we've saved some money because we've had [big-ticket] items to repair[,] and without a home warranty, we'd be paying retail price,” Travis said. “For instance, [our] recent garage door repair was [$2,100] but with home warranty, we paid around [$650]. Still, must consider [...] [the] yearly plan is around [$600].”

However, some unhappy customers on our site have reported denied claims, low reimbursements, high out-of-pocket costs and coverage gaps.

For instance, Mayuresh, a reviewer from California, said they had a slab leak claim denied over a technicality and had to pay about $4,500 out of pocket.

And Denise, a reviewer from Maryland, said: “After being a long term customer of over ten years, my HVAC system went up after many years of normal wear and tear. My policy states that [$5,000] is contributed toward my system. [My home warranty company] only put $599.00 towards it[,] leaving me with an out of pocket cost of $6,177.00. The reason for having coverage is to offset these expensive costs. I am a teacher and out for the summer. It was quite difficult to come up with that amount of money. As a result[,] I cancelled my policy.”

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