Unexpected repairs to appliances and home systems can put serious dents on your budget. That’s why many homeowners are considering housing guarantees to protect their finances. But how much coverage is it? On average, a home warranty plan costs $62.33 a month and helps cover repairs or replacements of major appliances due to normal wear and tear.
Whether you’re buying a home in Fort Collins, Colorado, South Carolina, or Bend, or Bend, this Redfin guide explains whether a home warranty is usually costly, factors that affect pricing, and why it can be a critical investment for your peace of mind.
What is a home warranty?
Home Warranty is a service agreement that helps to cover the main systems and appliances of your home. If something stops working due to normal wear or tear, the warranty will help you pay for repairs or replacements.
Housing Guarantee vs Home Insurance
Home warranty is often confused with homeowner insurance. But they serve a variety of purposes. Homeowner insurance usually covers sudden damages from accidents or natural disasters, but home warranty focuses on issues that arise over time, like the dishwasher and HVAC systems.
>>Read: Home Warranty vs Home Inspection: Do you really need both?
How much does a home warranty cost?
On average, home warranty typically costs between $400 and $1,000 a year, totaling covering annual premiums. The exact price will vary based on your location, home size and age, and coverage plan you choose. Also, be aware that you will pay a service fee for each time you request a repair or service visit.
Home Guarantee Cost Collapse
A home warranty typically involves several additional costs besides annual or monthly premium rates. Here’s what you need to know:
Annual or monthly premiums: Most home warranty plans cost between $300 and $700 a year, or $25 to $60 a month. Prices vary depending on location, home size and coverage level. Service Fee: When you request a repair or replacement, a technician will pay a service fee of between $75 and $125 to come to your home and evaluate the issue. Add-on Coverage Cost: Expanding your plan from basic protection will pay add-on coverage costs ranging from $40-$200 a year. Compensation Limitations and Limits: Home Warranties often pay for repairs and replacements up to a certain point in time. For example, your plan may cover up to $2,000 per appliance. If the repair cost exceeds the limit, you will pay the difference from your pocket.
Factors that affect home warranty costs
The cost of a home warranty depends on several important factors, including the company you choose, the compensation plan, the size and age of your home, and where you live. Understanding these variables will help you find the best plan for your needs and budget.
Service charges, compensation levels, add-ons
Depending on the compensation level you choose, it will have a major impact on the cost of your home’s warranty. For example, lowering service charges can increase annual premiums, but typically reduce monthly or annual costs. Including add-ons in coverage, such as pool and spa equipment or second fridge coverage, also increases the overall cost of your warranty.
Area and house age
The size and age of your home will play a major role in determining the cost of your home’s warranty. Coverage is more expensive as large homes typically have more appliances and systems. Additionally, older homes can be more expensive when it comes to home warranty costs, as systems and appliances are likely to require repairs. For an estimated estimate, you should provide your home details to your warranty provider.
Home Guarantee Company: Cost Comparison
Location: Cost comparison
AVG location. Annual cost AVG. Monthly Cost Notes Phoenix Arizona $360-$780-$30-65 High Demand for Cooling System Coverage Charlotte, NC $588-$972 $49-$82 Pricing Chicago Impact Guarantee Provider Denver, CO $447-$893 $38-$76 Seasonal Weather Impact HVAC Repair Frequency
How to get a home warranty quote
Start by researching reputable home warranty providers in your area. Find reviews, check BBB ratings, and see which companies provide the coverage you need.
Most providers have an online estimating tool that allows you to estimate costs by entering your contact information, property addresses, and basic home details (such as size, age, and key systems). If an online quote is not available, you can usually request it over the phone.
We recommend collecting estimates from several companies. So you can compare coverage options, exclusions, service charges and overall prices to find the best one for your needs.
Here’s how to get a quote:
Research Provider: As a research home guarantor in the region, you can work with the provider that best suits your needs. Visit the company’s website for citations. Visit our site to narrow down the best options and get a quote. If you want to talk on the phone, you can call your provider directly. Share your home details: Be prepared to share your address, area, age of your home, and information about the main systems and appliances you have. Provide contact information: You need to provide your name, phone number and email address to allow businesses to view your information and customize your quote. Review and compare coverage options: Once you receive your quote, carefully review your plan by looking at what’s included (price, terms, and restrictions or exclusions). Ask a question before committing: Make clear what you’re unsure about, such as how your claim will be handled, how quickly repairs will be scheduled, and whether there will be dollar limits on coverage.
>>Read: What does the home warranty cover?
How to save money with home guarantee
While each company has its own rates, there are several practical ways to save money with a home guarantee.
Choose the appropriate level of coverage. Some plans cover almost everything in your home, while others are limited to the system or appliance only. See details to avoid overpayment. Look for special offers. Many providers have promotions and discounts, particularly for new customers, military personnel or seniors. When considering your plans, be sure to ask about current transactions and price damages. Compare some quotes. Get quotes from multiple companies and see which ones provide the best value. Please let your representative know that you are comparing options. Some people offer better rates to beat your business.
Home Guarantee Cost FAQ
1. Does the home warranty cover existing terms?
As these issues exist before your coverage begins and are considered the responsibility of the homeowner, it is unlikely that a home warranty plan will cover existing conditions or issues. Read your contract carefully and consider that you are doing inspections to document the status of your system and appliances when you sign up.
2. Can I buy a house anytime, or is it only when I buy a house?
You can always buy a home warranty, but buying it when you close your home has benefits such as special pricing and additional incentives.
3. How long does it take to start coverage after purchasing a plan?
Most home warranty typically has a waiting period before coverage begins 30 days after purchasing the plan. This waiting period helps prevent claims of issues that were already present when you signed up.
4. Do you need a home warranty?
While you don’t need a home warranty when buying a home, it can provide valuable peace of mind to the buyer. Whether or not you ultimately buy it depends on your budget, your home’s age and condition, and the comfort of dealing with unexpected repair costs yourself.
>>Read: Do you need a home warranty?
5. Is the home warranty actually worth it?
Home warranty is valuable if you want to plan ahead and protect yourself from unexpected repair costs when your system or appliance breaks down. In many cases, a home guarantee will save you money over time and act as a financial safety net for the key elements of your home.
