A home warranty is a type of home protection plan that covers the cost to repair your most important home systems and appliances when they break down due to normal wear and tear. So when your air conditioner stops running in the middle of the summer or your oven stops working days before a major family get-together, you can rely on your home warranty provider to swoop in and fix it right up.
USA TODAY’s home warranty guide will cover what a home warranty is, what’s covered and how to find the right one for your home.
What is a home warranty?
A home warranty is an optional service contract that helps pay to repair or replace major home systems and appliances when they fail due to normal wear and tear. The average home warranty covers your HVAC, electrical and plumbing systems, along with kitchen appliances. Some are even more comprehensive and include laundry appliances, water heaters, septic systems and limited roof leak coverage.
“A home warranty can save thousands of dollars per year on repairs — that is my experience as a real estate agent and homeowner. I recommend home warranties to all of my clients who are purchasing new homes, [but] it really depends on the coverage and policy and how often it is used,” says Jennifer Okhovat, a real estate agent with Compass in Los Angeles.
When your system or appliance stops working, all you have to do is submit a claim to your home warranty provider, pay the service call fee and let the technician diagnose and fix what’s broken.
How does a home warranty work?
From start to finish, here is what you can expect when you buy a home warranty:
- Choose a plan: Once you’ve found the right home warranty provider, choose coverage for the systems and appliances you want protected. You often get the choice of a systems plan, an appliance-only plan or a combo plan.
- Pay the premium: Monthly or annual payment is required to activate your coverage. There may be a short waiting period (often 30 days) before you are eligible to make claims.
- When something breaks: If a covered item fails due to wear and tear, file a claim with the warranty company right away. This can be as simple as filling out a form online or calling a customer service representative.
- Service dispatch: Your provider will assign a network technician to diagnose and fix the issue. In some cases, you may be able to choose your own service professional.
- Pay the service fee: Each visit requires a service call fee, often around $100.
- Repair or replace: If approved, your home warranty company covers repair or replacement up to your plan’s limit.
Tip: Keep records of maintenance so that you can show your warranty provider if they require proof of maintenance before they will approve a claim.
What is covered by a home warranty?
Home warranty companies offer plans that cover your main home systems, most important appliances or a combination of the two:
- Home systems, including HVAC systems, plumbing systems and electrical systems
- Major appliances, such as refrigerators, dishwasher, clothes washer and dryer, oven, etc.
- Add-on items, like pools/spa equipment, roof leaks, well pumps and septic systems
Items not covered by a home warranty
Home warranties cover repair costs when they stem from normal wear and tear. The most common home warranty exclusions you’ll come across include:
- Preexisting conditions
- Structural components (walls, windows, doors, roofs and foundation)
- Items still covered under a manufacturer warranty
- Damage from improper use
- Damage from poor or improper maintenance
- Damage from improper installation
- Cosmetic flaws
- Pest damage
- Damage from natural disasters (and other issues covered by homeowners insurance)
Who should not buy a home warranty?
Home warranties aren’t equally beneficial for everyone, so if any of the following describe you or your situation, you may not see as much value as you otherwise might.
- You have a newer home, and your appliances and systems are still covered by your builder’s warranty
- You have enough savings to cover expensive emergency repairs
- You already have preventative maintenance contracts for your home systems
- You live in an apartment, and your landlord is responsible for home repairs
- You live in an HOA that mandates specific contractors for repairs
- You have high-end appliances and systems that may cost more to repair or replace than a service contract will cover
- You recently replaced most of your appliances and/or home systems
Common misconceptions about home warranties
Home warranties can be confusing if you’re not accustomed to how they work.
Here are a few common misconceptions about home warranties that you should understand before purchasing a service contract.
- You pay nothing for your repairs or replacements: Every claim you file with your provider requires a service fee, which you always pay out of pocket. These fees range from $65 to $125, and you pay them whether your provider repairs your item, replaces it or denies coverage.
- You’ll have no out-of-pocket costs for repairs: Even aside from your service fee, you could face out-of-pocket costs for repairs and replacements. Most home warranties have per-item coverage limits, as well as per-contract coverage limits. If your repair or replacement goes beyond those, you’ll be responsible for the rest of the costs associated with your issue.
- You’ll always be covered for repairs or replacements: Home warranty companies can and often do deny coverage, even if you need a repair or replacement for an item covered in your contract. Most items have excluded parts, damages and other conditions, so read through your contract carefully to see what’s excluded.
- If you have homeowners insurance, you don’t need a home warranty: Homeowner’s insurance covers unexpected and sudden damage from things like natural disasters and house fires, while a home warranty covers damage from normal wear and tear. They’re different, and you can benefit greatly from a warranty even if you have insurance.
- Home warranties let you set-and-forget your systems and appliances: Most home warranties require that you carry out routine maintenance on your systems and appliances, and they’ll deny coverage if you don’t.
- Replacements are always apples-to-apples: There’s no guarantee that your warranty provider will replace an appliance or system with the same brand, type or even color. This may be a deal breaker, especially if you want matching appliances.
Who can use a home warranty?
Home warranties can be beneficial in a lot of scenarios, and they might be a good investment if you fall into any of the following groups of people.
- You have an older home with aging appliances and systems: Home warranties are usually the most beneficial for homes with older appliances and systems, which are more likely to experience issues from normal wear and tear.
- You don’t have enough savings to cover major home repairs: Home warranties can insulate you from high out-of-pocket costs, so they can save you from financial hardship if you don’t have the savings to cover repairs or replacements.
- You’re buying a home: When you buy a home, you never really know the condition or remaining lifespan of what’s inside. A home warranty can provide some much-needed peace of mind that you won’t have high repair costs right after closing.
- You’re selling a home: Sellers can sweeten the deal for buyers by purchasing a home warranty and offering to transfer that peace of mind at closing. Sellers can also reduce last-minute repair and replacement costs leading up to closing with a home warranty.
- You have a rental property and want to limit operating expenses: Some home warranties cover rental properties. You may be able to write off the cost of the coverage, and it could save you money on operating expenses. Coverage can be particularly helpful for short-term rentals, where systems and appliances see heavy use.
Difference between a home warranty and home insurance
Although home warranty and home insurance may seem similar, they are not the same. Home insurance is often required by lenders when you purchase a home, and a home warranty is optional additional coverage.
Home insurance covers your home and belongings from unexpected events like fire, theft or natural disasters. A home warranty, on the other hand, is a service contract that covers cost of the repair or replacement of major systems and appliances, such as HVAC, plumbing and kitchen appliances, when they fail due to normal use.
How much does a home warranty cost in 2026?
Home warranty contracts can be low risk and worth the cost if you anticipate needing home repairs. “They are relatively inexpensive. So if you lock yourself into a contract that’s only like $500 or $1,000, there’s little risk,” says Brad Dwin of We Buy MD Homes.
According to the data the team at USA TODAY collected, most home warranty plans cost between $35 and $100 per month, or $420 to $1,200 per year. This makes home warranties affordable for most homeowners, and worth their monthly payment after just one service call.
Home warranty benefits
Peace of mind is often cited as one of the most common benefits of having a home warranty, but there are several more advantages that make a home warranty worth it:
- Predictable budgeting for home repairs: Instead of paying hundreds or thousands of dollars for an unexpected home appliance failure, you’ll pay a set monthly rate for your home warranty.
- Connections to reliable service professionals: When your systems break down, finding the right repair service can be tricky. Home warranty providers often have a network of service professionals they can send to your door.
- Fills the gaps in homeowners insurance: A home warranty is not a replacement for home insurance, but it does cover the cost to repair systems and appliances when they get old and break. This is unlike home insurance, which covers environmental damage, theft and vandalism.
- May add value for a real estate transaction: Including a home warranty in the sale of your home, it may entice buyers and make for an easier home sale, especially if your home is older.
- Coverage for older systems and appliances: Older systems and appliances can break down at any — and often the most inconvenient — time. A home warranty offers peace of mind knowing that when that inevitable breakdown happens, you’re covered.
What to consider before buying a home warranty
A home warranty is not a pass to unlimited free home repairs. While these home service plans can come in handy when your breakdown is eligible, there are some things to keep in mind before you buy:
- Your coverage cap may not be enough to cover the entire repair or replacement cost. Your plan will have both an aggregate (total) coverage limit and individual system/appliance coverage caps. If the cost of repairs exceeds one or both these amounts, you will have to pay the difference. However, many repairs will fall within the specified coverage ranges.
- There will be exclusions to coverage. A home warranty does not cover everything, and you’ll find that some common issues don’t qualify for warranty coverage, including breakdowns due to improper maintenance.
- Your claim can be denied. If the reason your appliance or system malfunctioned is listed under an exclusion, your home warranty provider will deny your claim.
- You will pay a service call fee for each visit. Like paying a deductible, you will be responsible for paying a service call fee for each repair.
- Repairs are not always immediate. Response times vary by home warranty provider, but don’t be surprised if it takes up to 72 hours for a service professional to be dispatched to your home. It can take even longer for parts to be delivered to complete the repairs.
Tip: Always read your contract and review the fine print. Doing so will help you understand exclusions, so you know what’s covered.
Home warranty alternatives
A home warranty is not your only option to cover unexpected appliance and home system breakdowns. If you don’t want to pay monthly for a home warranty (or don’t need one yet), these alternatives could be a better option:
- Build up an emergency savings fund
- Register appliances and systems for manufacturer warranties
- Look for extended product warranties that continue after the manufacturer warranty expires
- Get a home equity line of credit (HELOC) to cover home improvements
Where to buy a home warranty
Companies like American Home Shield, Cinch Home Warranty and Liberty Home Guard are reputable home warranty providers that offer comprehensive coverage at affordable prices. See which home warranty companies are available in your area by entering your ZIP code into the map below.
About the author
Alora Bopray is an editor and writer who has covered the home services industry for nearly a decade. She is an avid DIYer who uses her own successes (and mistakes) to educate homeowners on how to take better care of their homes. Categories covered by this author include home warranty, gutter guards, pest control, mattresses, roofing, car warranty, home insurance, car insurance, weight loss and hair loss.
Frequently asked questions
What is the point of a home warranty?
A home warranty is designed to pay to repair or replace broken home systems and appliances. If the damage is covered under your warranty, you only need to pay your service call fee and the home warranty company pays the rest (up to a certain coverage limit).
What are the disadvantages of home warranties?
Home warranties will only cover damage due to normal wear and tear, so your system or appliance may not be covered if the damage falls under an exclusion.
What does a home warranty cover when you purchase a home?
A home warranty covers the major systems and appliances in your house, including your HVAC system, electrical system and kitchen appliances. If any of these break down due to normal wear and tear, the home warranty will cover the cost to repair them.