Home Warranty Cost: Average Rates & What Drives Them

A home warranty is a service contract, not insurance. For a monthly or annual fee, the company agrees to repair or replace covered systems and appliances that fail from normal wear. When something breaks, you call the company, it sends a contractor from its network, and you pay a service fee for the visit.

The cost has three parts: the plan price, any add-on coverage, and the fee for each service call. The sections below show typical figures for each, plus how to read a contract before you compare prices.

Plan prices depend on the provider, the coverage level, and where you live. Plans typically come in systems-only, appliance-only, and combined versions, and a plan that covers more costs more. One review site collected quotes from several providers for the same type of house in one city, shown below. They are quotes for one location, so your price may differ.

Each provider quotes a range because the price depends on the plan tier. Entry plans cost less and cover fewer items, while top tiers cover more and cost more.

Most companies charge a fee every time a technician is sent, and you usually owe it even if the first visit does not fix the problem. Some plans offer a lower fee in exchange for a higher monthly price, and some reduce or remove it. Two sources describe the typical fee.

Over a year, the fees can add up when several items fail, so factor the number of expected claims into the total cost.

Pools, spas, septic systems, well pumps, and roof leaks are commonly excluded from base plans and offered as extras. One review site lists typical monthly prices for several add-ons.

Add-ons raise the monthly total, so list the items in your home that you want covered and ask each company to price them.

Read the full contract before relying on the sales page. Common limits include per-item payout caps, exclusions for pre-existing conditions or improper maintenance, and rules about which contractors may do the work. Some companies use the right to repair or replace with comparable equipment rather than paying cash. Ask for a sample contract before you buy, and check whether the warranty has a waiting period.

Averages from different sources are not directly comparable. NerdWallet reports a national average based on its own analysis of plan prices. This Old House reports an average and a range for typical plans. ConsumerAffairs gives a broader range that also reflects its quotes for different locations. Prices also change with promotions, the term you choose, and whether you pay monthly or annually. A discount on an annual payment, for example, can change the effective monthly price.

No. Homeowners insurance covers sudden damage from events such as fire or storms, while a home warranty covers repair or replacement of covered items that wear out. Warranty coverage does not replace insurance, and most homeowners policies do not cover normal appliance breakdown. A licensed insurance agent can explain how the two differ for your home.