How Much Does a Home Warranty Cost?

Homeownership comes with the added expense of having to repair systems and appliances when they unexpectedly malfunction or break down. These repairs are often costly, and, unless you have an emergency fund or some extra money, can be hard to cover. That's when a home warranty might come in handy.

A home warranty can help homeowners pay for the cost of repairing or replacing home systems and appliances when they fail. It can also work in tandem with home insurance, providing additional peace of mind.

Here’s a breakdown of how much a home warranty costs, key factors that affect pricing and four tips to help you save money when purchasing a home warranty.

What is a home warranty?

A home warranty is a service contract that covers the repair or replacement of essential home systems and appliances when they malfunction, fail or break down due to normal wear and tear.

Basically, these service contracts are like an extended warranty that help you pay for the unexpected cost of repairing mechanical components, modules or parts that might get damaged over time.

What does a home warranty cover

Home warranty coverage can vary depending on the provider and the plan you choose. Many companies offer different plan tiers and let you decide the items you want to cover.

Most home warranties typically include coverage for the following systems and appliances:

• Plumbing systems

• Electrical systems

• Air conditioning and heating systems (HVAC system)

• Kitchen appliances, like refrigerators, ranges, cooktops, ovens, built-in microwaves, dishwashers and garbage disposals

• Washing machines and clothes dryers

• Garage door openers

• Water heaters

• Ceiling and exhaust fans

• Septic systems

For more information about home warranty coverage, check out our guide on what a home warranty covers.

Home warranty cost

Home warranty contracts have monthly or annual premiums, and are automatically renewed annually. A home warranty policy can cost anywhere from $27 to $90 monthly and upwards of $400 annually, depending on the service provider you choose.

In addition to a monthly premium, home warranty providers charge a service call fee (or deductible) that’s paid when you request a visit or diagnosis from a technician. This fee can affect the overall cost of your plan. Generally, the higher your deductible, the lower your monthly premium.

Below is a breakdown of the monthly and annual cost for the best home warranty companies, according to our research.

Home warranty cost per month

Home warranty cost per year

Factors that affect home warranty prices

Several factors can influence the overall cost of a home warranty plan, including:

1. Type of plan: The level of coverage you choose is a main determinant of home warranty prices. Home warranty companies typically offer multiple plan options, from plans that cover the most basic items (such as kitchen appliances, electrical systems, plumbing) to more comprehensive coverage.

Lower tier plans, such as appliance-only and system-only plans, generally come at a lower price than plans that include coverage for a combination of major systems and appliances. Naturally, the more items covered by the plan, the higher the monthly premium will be.

2. Service Call Fee: Home warranty plans include a service call fee, which is the amount you’ll pay when a service technician or contractor is dispatched to assess and repair a covered item. This deductible can vary among providers, and typically range anywhere from $60 to $150.

Home warranty premiums increase or decrease depending on the service fee you choose. As a general rule, plans with a higher service fee have a lower monthly fee than those with a lower service fee.

3. Location: Many companies take into account regional variations in labor rates, cost of living and even specific weather conditions to determine pricing. This can affect the overall price of a home warranty policy.

4. Type of home: The specifics of your home, such as its size and type of property — whether it’s a single-family home, a duplex apartment or a two-family unit — also influence the cost of a home warranty. For instance, some companies may charge more for properties over 5,000 square feet.

5. Add-on coverage: Most companies let you choose additional coverage. This may include coverage for pools, secondary refrigerators, electronic devices and roof leaks. Add-ons can considerably increase your monthly payments.

How to get a home warranty quote

Getting a home warranty quote is relatively easy, most companies let you shop for plans and get a free quote online through their website. You may also reach out to the company directly over the phone by calling customer service or their sales department.

To get a quote you typically have to provide personal information, such as your name, email, phone number and street address. Some companies may also ask you to disclose the type of property and its approximate size in square feet.

Transparent companies will also let you access a sample contract with the terms and conditions if you request a quote online. Others have it readily available on their website. In either case, make sure to read it carefully and ask the provider any questions you may have.

Ways to save money on a home warranty

Here are four ways you can potentially save money on a home warranty:

Get multiple quotes

Obtain quotes from multiple home warranty providers and compare their coverage options, pricing and terms. Although most companies offer coverage for similar items, their pricing and coverage limits can vary widely. Comparing providers allows you to choose the company that offers the best value for the coverage you need.

Choose a higher service fee

Choosing a higher deductible can help you save between $5 to $10 on a month-to-month basis. However, keep in mind that while this option can save you money on monthly payments, it involves a higher out-of-pocket expense when you request a service.

Look for plan discounts

Home warranty companies typically offer discounts when you choose to pay the annual membership upfront instead of monthly. Depending on the company, you could save a few hundred dollars yearly by paying your plan upfront. Many companies offer special deals and different discounts throughout the year.

Only cover what you need

Don’t choose the most comprehensive plan just because it offers more coverage. First, analyze what home appliances and systems you want to protect and then choose accordingly. This way you can avoid overpaying for a plan that covers more than what you really need.

Consider appliance-only and system-only plans if you just want coverage for specific items. These plans are generally more affordable than combination plans, and can often be customized to include additional coverage.

Summary of Money’s How much does a home warranty cost?

• Unlike a home insurance policy, a home warranty covers repairs or replacements of major appliances and systems, such as plumbing systems, electrical systems, air conditioners, clothes washers and kitchen appliances.

• The average cost of a home warranty is around $50 to $70 a month, and upwards of $400 annually, depending on the home warranty provider.

• In addition to a monthly or annual premium, home warranty companies charge a service call fee of between $65 and $150.

• There are five factors that can affect the overall cost of a home warranty: the type of plan, the service call fee, type of home, property location and any additional coverage you might add.

• Always get multiple quotes so you can compare pricing, coverage and policy limitations. This can also help you save money on a home warranty.