How Much Does a Home Warranty Cost? A Guide on Average Prices, Coverage, and Tips

Unexpected repairs to appliances and home systems can put a serious dent in your budget, which is why many homeowners consider a home warranty to help protect their finances. But how much coverage? On average, a home warranty plan costs $62.33 and will help to cover the repair or replacement of major appliances due to normal wear and tear.

Whether you’re buying a home in Fort Collins, CO, Greenville, SC, or Bend, OR, this Redfin guide will walk you through what a home warranty typically costs, what factors influence pricing, and why it could be an important investment for your peace of mind.

What is a home warranty?

A home warranty is a service contract that helps cover the major systems and appliances in your home. If something stops working due to normal wear and tear, the warranty can help pay to repair or replace it.

Home warranty vs. home insurance

Home warranties are often confused with homeowners insurance.  but they serve different purposes. Homeowners insurance typically covers sudden damage from accidents or natural disasters, while a home warranty focuses on issues that happen over time, like a faulty  dishwasher or HVAC system.

>> Read: Home Warranty vs. Home Inspection: Do You Really Need Both?

How much does a home warranty cost?

On average, a home warranty typically costs $400 to $1,000 per year in total, covering the annual premium. The exact price can vary based on your location, the size and age of your home, and the coverage plan you select. Keep in mind you’ll also pay a service fee each time you request a repair or service visit.

Home warranty cost breakdown

A home warranty usually comes with a few additional costs aside from the annual or monthly premium fee. Here’s what you should know:

• Annual or monthly premium: Most home warranty plans cost $300-$700 per year or $25-$60 a month. The price varies depending on your location, home size, and coverage level. 
• Service fee: When you request a repair or replacement, you will pay a service fee of $75-$125 for a technician to come to your home and assess the issue. 
• Add-on coverage costs: If you expand your plan from the basic protections, you will pay add-on coverage costs, ranging from $40-$200 or more per year to your premium.  
• Coverage limits and caps: Home warranties will often pay for repairs and replacements up to a certain point. For example, your plan might cover up to $2,000 per appliance. If repairs cost exceed the limit, you pay the difference out of pocket.

Factors that affect a home warranty cost

The cost of a home warranty depends on several key factors, including the company you choose, the coverage plan, the size and age of your home, and where you live. Understanding these variables can help you find the best plan for your needs and budget.

Service fee, coverage level, and add-ons

Depending on the coverage level you select will significantly impact the cost of your home warranty. For instance, lower service fees can increase the annual premium, while higher feeds usually lower your monthly or yearly cost. If you include add-ons in your coverage, such as coverage for pool and spa equipment or second refrigerators, this will also raise the overall cost of your warranty. 

Square footage and age of home

The size and age of your home will have a large role in determining your home warranty cost. Because larger homes typically have more appliances and systems, the coverage will cost more. Older homes can also be more expensive when it comes to home warranty cost because their systems and appliances are more likely to need repairs. You will need to provide the details of your home to the warranty provider for an estimated quote.

Home warranty company: cost comparison

Location: cost comparison

How to get a home warranty quote

Start by researching reputable home warranty providers in your area. Look for reviews, check BBB ratings, and see which companies offer the coverage you need.

Most providers have online quote tools where you can estimate costs by entering your contact info, property address, and basic home details (like size, age, and major systems). If an online quote isn’t available, you can usually request one by phone.

It’s a good idea to gather quotes from several companies so you can compare coverage options, exclusions, service fees, and overall pricing to find the best fit for your needs.

Here are the steps you can take to get your quote:

1. Research providers: Research home warranty companies in the area so you can align with a provider that best suits your needs. 
2. Visit company websites for a quote: Narrow down the best options and visit their sites to get a quote. If you prefer to talk on the phone, you can call the provider directly.
3. Share your home details: Be prepared to share your address, square footage, the age of your home, and information about the major systems and appliances you have.
4. Provide your contact information: You’ll need to provide your name, phone number, and email address so companies can confirm your information or customize your quote.
5. Review and compare coverage options: Once you receive an estimate, review the plans carefully by checking what’s included (pricing, contract terms, and any limitations or exclusions).
6. Ask questions before committing: Clarify anything you’re unsure about, like how claims are handled, how quickly repairs are scheduled, and whether there are dollar limits on coverage.

>> Read: What Does Home Warranty Cover?

How to save money on home warranties

Although each company sets its own rates, there are a few practical ways to save money on a home warranty.

• Choose the right level of coverage. Some plans will cover almost everything in your home, while others are limited to just systems or appliances.Review the details to avoid overpaying.
• Look for special offers. Many providers have promotions or discounts, especially for new customers, military members, or seniors. Be sure to ask about any current deals or price breaks when you’re considering a plan.
• Compare several quotes. Get quotes from multiple companies and see which offers the best value. Let representatives know you’re comparing options—some may offer a better rate to win your business.

FAQ on home warranty costs

1. Does a home warranty cover pre-existing conditions?

It’s unlikely for a home warranty plan to cover pre-existing conditions or problems because these issues existed before your coverage began and are considered the homeowner’s responsibility. Ensure that you read the contract carefully and consider having an inspection done to document the condition of your systems and appliances when you sign up.

2. Can I buy a home warranty at any time, or only when I buy a house?

You can purchase a home warranty at any time, but buying one when you close on a home can offer advantages, such as special pricing or added incentives.

3. How long does it take for coverage to start after I buy a plan?

Most home warranties have a waiting period before coverage begins, typically 30 days after you purchase the plan. This waiting period helps prevent claims for problems that already existed when you signed up.

4. Is a home warranty required?

A home warranty isn’t required when buying a house, but it can offer valuable peace of mind for buyers. Whether to purchase one ultimately depends on your budget, the age and condition of the home, and how comfortable you feel handling unexpected repair expenses on your own.

>> Read: Is a Home Warranty Required?

5. Is a home warranty actually worth it?

A home warranty can be worth it if you prefer to plan ahead and protect yourself from unexpected repair costs when systems or appliances break down. In many cases, a home warranty can save you money over time and serve as a financial safety net for your home’s essential components.

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