A broken air conditioner in the middle of summer. A leaking water heater the night before guests arrive. These are the kinds of expensive surprises no homeowner wants to deal with.
That’s where a home warranty comes in. It’s a service contract that helps pay for repairs or replacements when major appliances or systems break down from everyday use. Think of it as a safety net for things like your HVAC, fridge, or plumbing.
In this guide, we’ll explain how home warranties work, what they cover (and what they don’t), and how to tell if getting one makes sense for your home and budget.
How Home Warranties Work
Home warranties work by providing coverage for common breakdowns that happen over time—not damage from accidents or weather. You pay an annual or monthly fee to keep your coverage active. When something breaks, you file a claim with your warranty provider. They send out a technician from their network to diagnose and fix the issue.
Each time you file a claim, you’ll pay a service fee—usually between $75 and $125—regardless of the actual repair cost. The warranty company covers the rest, up to the limits stated in your contract. Most plans let you choose between different levels of coverage: appliances only, systems only, or a combination of both. You can also add extra items for an additional fee.
What a Home Warranty Covers—and What It Doesn’t
Home warranties cover a wide range of systems and appliances, but not everything is included. Knowing the difference between what’s covered and what’s excluded helps you avoid surprises later.
Coverage varies by provider, but most plans follow a similar pattern. Here’s a breakdown to help you understand what’s typically included, what usually isn’t, and what add-ons might be worth considering.
What’s Typically Covered
Most standard home warranty plans include protection for the essential systems and appliances that keep your home running. This usually includes:
- Heating and cooling systems: Central air conditioners, furnaces, and ductwork.
- Plumbing systems: Pipes, drains, toilets, and water heaters.
- Electrical systems: Wiring, circuit breakers, ceiling fans, and outlets.
- Kitchen appliances: Dishwashers, ovens, ranges, built-in microwaves, and garbage disposals.
- Laundry appliances: Washers and dryers, if included in the plan.
Coverage kicks in when these systems fail due to wear and tear—not because of accidents, misuse, or poor installation.
What’s Usually Not Covered
While home warranties cover many common breakdowns, they do come with exclusions. Here are some of the most common things not covered:
- Pre-existing conditions: Problems that existed before your plan started.
- Improper installation or maintenance: If a system wasn’t installed correctly or hasn’t been maintained, the warranty may not apply.
- Cosmetic issues: Dents, scratches, or other appearance-related problems that don’t affect function.
- Structural elements: Things like the foundation, roof, or walls are typically covered by homeowners insurance—not a home warranty.
- Commercial-grade appliances: Some providers exclude higher-end or professional-grade models unless you pay extra.
Optional Add-Ons Some Plans Include
If your home has extra features or less common systems, many warranty companies offer optional add-ons. These are not included by default but can be added for a higher premium.
- Pool and spa equipment: Includes coverage for pumps, heaters, and filters.
- Second refrigerator or wine cooler: Useful if you keep appliances in your garage or basement.
- Well pump or septic system: Often needed for rural properties.
- Stand-alone freezers or ice makers: These are usually considered optional and not included in base plans.
Add-ons can help you customize your coverage to match your home’s specific setup—but always check the fine print for coverage limits.
How much do home warranties cost?
Home warranties are generally affordable, especially compared to the cost of major repairs. Most homeowners pay between $300 and $600 per year, depending on their coverage and location. Some plans charge monthly instead of annually, which can make budgeting easier.
In addition to your premium, you’ll pay a service call fee each time you request a repair. This fee usually falls between $75 and $125 and stays the same, no matter how expensive the repair is.
The true value of a home warranty comes into focus when you compare those fees to what repairs cost without one.
Average Cost of a Home Warranty
Most home warranty plans fall between $300 and $600 per year. That breaks down to about $25 to $50 per month—a manageable amount for most homeowners.
In addition to the premium, you’ll pay a service fee (also called a trade call fee) every time a technician comes out. That usually ranges from $75 to $125, depending on the provider and your plan. Some companies let you pick a lower premium in exchange for a higher service fee—and vice versa.
Unlike homeowners insurance, this isn’t a flat one-size-fits-all number. What you pay depends on how much coverage you want and whether you’ve added optional items like a pool, second fridge, or septic system.
Common Repair Costs Without Coverage
One of the biggest selling points of a home warranty is that it protects you from surprise bills. Here’s what some of the most common repairs can cost if you don’t have a warranty:
- Air conditioner replacement: $4,000 to $7,000
- Water heater repair or replacement: $500 to $1,800
- Refrigerator repair: $200 to $400
- Major plumbing repair: $300 to $2,000+
- Oven or range repair: $150 to $600
When one thing goes wrong, it’s easy to cover the cost. When two or three hit in the same year? That’s when a home warranty can pay for itself several times over.
Factors That Affect Pricing
The price of your home warranty isn’t random—it’s based on a few key details. Here’s what can make your plan more expensive (or cheaper):
- Home size: More square footage usually means more appliances and systems to cover.
- Location: Some states have higher labor rates, especially in cities or rural areas with limited technicians.
- Appliance age: Older appliances are more likely to fail, which may raise your premium.
- Optional coverage: Adding coverage for things like pools, septic systems, or guest houses increases the cost.
- Claim history: Some companies may raise your renewal price if you’ve filed multiple claims.
Every provider prices things a little differently, so it’s smart to get quotes from more than one company—and look closely at what’s actually included for the price.
How to Compare Providers
All home warranty companies make big promises—but not all of them deliver when something breaks. That’s why it’s important to compare more than just the price. Focus on service quality, claims process, and real customer experiences to avoid regret later.
Here’s what to look at before you sign anything:
- Customer reviews: Look beyond star ratings. Read actual reviews on the Better Business Bureau, Trustpilot, and Reddit to spot patterns—especially around denied claims or long wait times.
- Coverage that fits your home: Some plans automatically include basic appliances and systems, while others make you pay extra for essentials like the fridge or air conditioning. Match coverage to what you actually own.
- Service network quality: Ask whether the company uses local, licensed technicians—and whether you can read reviews or choose who comes to your home. Poor contractor networks are a top complaint in this industry.
- Transparency in contracts: A good provider will let you see the sample contract before you buy. Look for vague language or loopholes. If it’s hard to read or feels like it’s hiding something, move on.
- Responsiveness: Call or chat with customer service before buying. If they’re slow or dismissive now, don’t expect better support once you’re a paying customer.
It’s tempting to go with the cheapest plan, but poor service and denied claims can cost more in the long run. A little homework upfront can save you hours of frustration down the line.
How to File a Claim Under a Home Warranty
When something breaks, most providers follow a similar claims process. Here’s how to get started:
- Review your contract to confirm the issue is covered.
- Submit a claim through the company’s website or phone line.
- Pay the service fee when a technician is dispatched.
- Wait for the technician to assess the issue and report back.
- Get the repair or replacement based on what your plan allows.
If a part is not available or the item can’t be fixed, your provider may offer a replacement or cash payout based on contract terms.
Home Warranty vs. Homeowners Insurance: What’s the difference?
Many homeowners confuse home warranties with homeowners insurance, but they’re not the same.
- Homeowners insurance covers sudden damage from things like fire, storms, and theft.
- Home warranties cover breakdowns from everyday wear and tear.
If your dishwasher breaks from old age, that’s a home warranty issue. If it’s destroyed in a fire, your homeowners insurance handles it.
Are home warranties worth it?
A home warranty can be worth it—but only if it fits your specific situation. If your appliances are aging, or you don’t have the savings to handle surprise breakdowns, a plan can save you thousands and reduce stress. But if your systems are new, or you’re unlikely to use the coverage, you might end up paying more than it’s worth.
Before you commit, run the numbers and read the fine print. Know what’s covered, what isn’t, and how much you’ll pay in service fees. It’s also important to choose a provider with solid reviews and clear contract terms.
If you think a home warranty could be a good fit, the next step is comparing plans. Reputable providers include Choice Home Warranty and Advanced Home Warranty. You can check out our list of top home warranty companies to see which one makes the most sense for your home and budget.
Once you’ve picked a provider, you’ll apply for coverage and pay your premium. Most plans last one year and can be renewed annually.
Final Thoughts
A home warranty isn’t just about saving money—it’s about avoiding the chaos that comes with unexpected repairs. If your furnace goes out in January or your fridge stops cooling during a heat wave, having coverage can make life a whole lot easier.
Still, not everyone needs one. A warranty only works if you understand the limits, exclusions, and service process. Do your research, compare your options, and pick a plan that matches your home and your budget. When used wisely, a home warranty can be a powerful tool for protecting your peace of mind.
Frequently Asked Questions
How long does a home warranty last?
When you choose home warranty coverage, it will come with a service contract for a set period of time. In most cases, it lasts for one year. You’ll then be able to renew your plan annually to keep your coverage intact. Cancellation policies will vary depending on which home warranty company you choose to work with.
Is a home warranty part of closing costs?
A home warranty can be included in your closing costs if you choose to purchase one when buying a home. Sometimes, the seller or your real estate agent can negotiate a one-year home warranty into the deal.
Can I buy a home warranty after closing?
Yes, you can purchase a home warranty at any time, not just when buying a home. However, pre-existing conditions may not be covered, so it’s advantageous to get a warranty as soon as possible.
Are home warranties transferable?
Yes, most home warranty plans can be transferred to new homeowners if you sell your home, making your property more attractive to potential buyers.
What should I do if my claim is denied?
If your home warranty claim is denied, review the reason for denial and check your contract for coverage details. You can often appeal the decision by providing additional information or clarification about the issue.
Looking for the Best Home Warranty Company?
Check out our reviews of the top home warranty companies.
