A home warranty’s cost isn’t just about the monthly payment; it’s about the overall value you get from the plan. To figure out if a home warranty is worth the cost, you’ll need to consider more than the price tag. Think about service fees, coverage limits and what’s actually included.
The USA TODAY home warranty review team did the digging. Here’s what you should know about the real cost of a home warranty.
What’s the average cost of a home warranty?
Home warranty plans typically cost between $43 and $67 per month, according to quotes gathered by the USA TODAY team from 20 leading providers. If you’re looking for the most budget-friendly option, appliance-only or systems-only plans usually land in the $30 to $40 monthly range. Full coverage combination plans cost more, often between $65 and $100 per month.
Home warranty costs based on provider
Home warranty providers charge between $35 and $100 per month for a home warranty plan, but the majority of plans will fall in the $40 per month range.
Companies like American Home Shield offers affordable basic coverage for systems or appliances, but have much higher costs for more comprehensive plans. Other home warranty companies, like Select Home Warranty, have very minimal differences between systems- or appliance-only coverage, so you might as well swing for the highest tier.
A typical service call fee is around $75 per claim, but you’ll find that some companies, such as Cinch Home Services, double that amount.
Home warranty costs by home type
Home warranty providers typically charge standard rates regardless of your home type and instead base coverage costs on square footage. If there’s a difference based on home size, it’s usually just an upcharge for homes over a certain threshold. For example, Choice Home Warranty has a $25-per-month upcharge for homes over 5,000 square feet.
That means that condos, co-ops, single family residences (SFRs) and other primary home types will usually all be the same price for coverage. However, SFRs are the most likely to have an upcharge for square footage if your provider has one.
Home warranty cost by region
Home warranty costs vary widely by location, but region doesn’t seem to be a primary determiner of cost. We pulled quotes from American Home Shield, as an example, and found that prices in parts of the northeast, the southeast and the midwest were all similar, while costs in the southwest were about 30% higher.
Home warranty costs can also vary based on unknown factors, including the local cost of living and specific risk factors in some cases. Just as an example, pricing in parts of the northeast was almost 100% higher than pricing in other areas in the same region.
For the most accurate costs, get a free quote from the home warranty companies you’re considering. You can compare pricing and coverage to find the best value for the money in your area.
Factors that affect home warranty cost
Many factors play a role in home warranty cost, and “Prices vary greatly based on the type of warranty you choose and how much actual coverage you want,” says Kristen Conti, broker and the owner at Peacock Premier Properties in Englewood, Florida. “Additionally the price adjusts based on how much you are willing to pay for each occurrence and if there is a deductible,” she adds.
Coverage level
The more coverage you have, the more expensive your plan will be. Basic plans that only cover appliances or systems are the most affordable, and combo plans that cover both are more expensive.
Service fees
Typically, the higher your service fee (the fee you pay when you file a claim and a technician is dispatched to your house), the lower your monthly cost. Many home warranty providers offer options to lower your service call fee, but that means your monthly rate will likely be higher.
Add-ons
An add-on is optional coverage for an individual item, like roof leak protection or pool/spa equipment. Many add-ons cost an extra $10 to $30 per month, but some providers offer coverage for additional items for as little as $5, depending on the item. Add-ons can add up quickly, so only choose additional coverage that you need.
Your location
Location can play a role in the cost of your plan, especially if you live in an area known for more expensive repair costs. Areas with higher labor rates or pricier parts tend to drive up the cost of repairs as well. If your region is known for extreme weather or frequent system failures, providers may also adjust pricing to account for increased risk.
Home size
Home warranty providers may charge more for larger homes, especially those more than 5,000 square feet. This is because larger homes have more appliances to cover and larger systems to run.
Types of appliances and systems
Plans that include high-end, luxury appliances typically cost more than basic coverage, and that’s if a home warranty company even offers coverage for those types of appliances. Some home warranties are better for home appliances than others.
Hidden home warranty costs
Your monthly payment is not the only home warranty cost you need to look out for. Other costs can drive up your annual price, including the following:
- Service fees: Every time you schedule a repair, expect a service call fee, usually $65 to $125 per visit.
- Coverage caps: Most plans limit how much they’ll pay per item or per year. If a repair exceeds that cap, you’ll cover the difference. Many home warranty providers have coverage limits between $1,000 and $3,000 for each system and appliance, but an overall aggregate limit of $5,000 to $10,000.
- Maintenance requirements: Some providers require proof of regular maintenance. While regular maintenance is a good practice that every homeowner should engage in, it does cost money.
Home warranty cost vs. value
The obvious value of a home warranty is that it covers the cost of expensive home repairs when you experience an unexpected breakdown. “Savings can be very significant based on the issue at hand. I have seen them cover plumbing and electrical issues into the thousands of dollars,” Conti says. AC systems are another area where homeowners often see major savings. A single repair or replacement can “easily exceed $1,000, making the annual cost of a warranty look small by comparison,” she says.
Home warranties can pay for themselves with just one repair, as long as you aren’t overpaying for coverage. And the item that pays you back can surprise you, as Conti experienced with a recent client:
One of my transactions which was a high end home, they had a very expensive ice maker. It went out during the inspection period. Because the customers chose to have a home warranty during their listing period, the company replaced the entire machine.
Value isn’t just about big-ticket items, it’s also about convenience. Warranties simplify the repair process to save both time and stress. Instead of hunting for a contractor, getting multiple bids and negotiating prices, you make one call and pay a predetermined service fee. For busy homeowners, the simplicity alone can be worth the cost.
How to save money on a home warranty
Most home warranties have affordable monthly payments, but there are ways to get the most out of your warranty (and save the most money):
- Only pay for the coverage you need. If you recently remodeled your kitchen and have all new appliances, you likely don’t need appliance coverage. Here, you can get a systems-only plan to save money.
- Get quotes from at least three home warranty companies. Home warranty providers vary in prices, so get quotes from three or more reputable providers and compare coverage before you commit.
- Choose a higher service fee (or lower depending on your need). Higher service call fees come with lower monthly rates, and vice versa. If you anticipate only needing your home warranty once or twice per year, it might be worth it to pay a lower monthly fee for a slightly higher call fee. But if you expect to make many claims, you might want to flip for the lower service call fee to save money on every claim.
- Avoid add-ons. It might be tempting to add every single appliance and system to your protection plan, but this approach will make your monthly payment skyrocket. Only add the most important additional protection if you need it.
- Pick a provider with a high coverage cap. A home warranty is only worth it if the repairs are paid for, so make sure the coverage caps are high enough to cover the cost of average repairs in your area. If they aren’t, you’ll pay the difference out of pocket.
Frequently asked questions
What’s the best time to buy a home warranty?
The best time to buy a home warranty is when you move into a new house. Since you may not know the home’s history, it will provide peace of mind knowing that should something break due to normal wear and tear, the warranty will cover the cost to fix it.
How late can you get a home warranty?
You can buy a home warranty at any time, but keep in mind that many providers have a 30-day waiting period during which you cannot make claims. If a system or appliance breaks down during this time, you are not eligible for coverage.
Who has the best home warranty coverage?
American Home Shield, Select Home Warranty and Liberty Home Guard are known to have quality home warranty coverage.
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.