How Much Does a Home Warranty Cost in 2024?

When it comes to providing coverage for a residential property, there are three types of warranties available. The first one is a home warranty or a home service contract that covers the repair, maintenance, or replacement of major home systems and appliances that break down due to normal wear and tear. This coverage is typically given by sellers as an incentive during a home sale, aiming to shield buyers from unexpected malfunction or failure of major systems or appliances in the home, particularly older ones. It can also protect sellers while the home is still on the market. The second coverage is home insurance, which covers unexpected damages like natural disasters and fires and often extends to personal possessions within the home. And the third one is a manufacturer's warranty that covers defects or malfunctioning of particular home systems or appliances, ensuring their quality and reliability directly from the manufacturer.

In this detailed cost guide, we will focus on the various aspects of a home warranty, including its types, providers, covered items, and other factors contributing to its cost, so you can trace the connection between them and actual market rates. If you're wondering how much a home warranty is, you will find the most accurate answers here. Keep reading to make an informed decision about your home protection options and choose a home warranty plan that best fits your needs and budget, ensuring peace of mind regarding unexpected repair or replacement costs in your home.

The National Average Home Warranty Cost

A home warranty is the best bet for homeowners looking to minimize significant repair costs, mainly if they know their home systems and appliances have been through numerous seasons. The real value is best seen in numbers. For example, the typical contractor rate for an emergency service can range between $85 and $265, depending on the specific system needing repair and the complexity of the issue. On the contrary, the annual home warranty cost falls between $280 and $1,465. It covers everything from inspection to repair and replacement of plumbing, electrical, and HVAC systems, as well as major appliances such as refrigerators, washers, and dryers. So, in the long run, a home warranty can yield substantial savings while providing comprehensive protection for your home if you encounter any breakdowns or system failures.

Critical Factors Affecting the Home Warranty Cost

Now, equipped with knowledge about the average costs associated with a home warranty on a national level, we can delve more profoundly into the subject. We'll dissect and discuss each aspect in detail, offering a comprehensive understanding of how these costs are distributed, the factors influencing them, and how they may vary depending on certain variables.

The home warranty price is primarily influenced by the location of a covered property, its size, type, age, and the coverage extant. These components, together with a coverage provider's reputation and its particular pricing terms, create the total home warranty estimate. Below, we discuss these factors in more detail to give you a general picture of how estimates are formatted.

Property Size

The size of the home doesn't significantly influence the price of a home warranty in terms of square footage. Nevertheless, coverages for extra large (over 5,000 square feet) and extra small (less than 1,300 square feet) homes are usually calculated another way. If this applies to you, we recommend you look into local home warranty providers right off the bet, as standard rates may not necessarily apply to your home's specific dimensions.

Property Type

Your property type also plays a role in estimating the annual home warranty price. Generally, mansions or custom homes may cost more to cover because they often have more systems and appliances that can break down. Conversely, townhouses, condos, or newer builds are usually cheaper to cover.

Property Age

The age of a property is a significant factor in determining the average home warranty cost. Older or historical buildings are typically more prone to system breakdowns and issues due to prolonged usage and wear and tear. Consequently, these homes may require more frequent repairs and replacements, elevating the risk for the warranty provider. That is why the cost of a home warranty for older homes can be considerably higher than that for newer ones.

Property Location

The annual cost of a home warranty policy is influenced by various factors, including the level of coverage, the fee amount for services, and even the location of the property. High-cost-of-living areas like New York, New Jersey, California, and Hawaii tend to have pricier home repairs, resulting in more expensive warranties. The geographic location of a property and the local climate pattern may also require specific plans and add-on protections. Therefore, it's crucial to take these considerations into account while calculating the cost of a home warranty policy.

Warranty Provider

Home warranty companies offer a wide range of packages tailored to meet various needs and budgets. These plans differ significantly in coverages, services, terms, and costs, providing options for homebuyers, sellers, or existing homeowners. The variance in price points often corresponds to the level of protection provided, from basic coverage of essential home systems to more comprehensive plans that include appliances along with other amenities.

Coverage Extent

The cost of a home warranty is directly proportional to the extent of coverage desired. If a homeowner wants a warranty that covers a larger number of systems and appliances, the overall cost will be higher. This is because the potential for required repairs or replacements increases with the inclusion of more equipment. That is why it's crucial for homeowners to balance their need for comprehensive coverage with the higher costs associated with these expansive warranty plans.

Three Major Home Warranty Cost Components

A home warranty comes with three major components - the premium, the service fee, and the cost of additional coverage beyond the basic contract plan. You should consider all three when budgeting because they all significantly impact the overall home warranty quote. For instance, a higher premium means better coverage, lower service fees, and less need for additional coverage. And vice versa, a lower premium could imply higher service fees and may require the homeowner to go for other coverages for adequate protection. Meanwhile, the cost of additional coverages depends on the homeowner's specific needs that are not covered in the basic contract plan.

Following, we delve into each of the three core components of a home warranty, allowing you to grasp the relationship between them and optimize your budgeting accurately. Consequently, this will protect you from incurring any unnecessary or unexpected expenses.

Premium

The premium is the central element of the total home warranty cost you pay your provider for covering your home systems and appliances. This upfront payment serves as a financial buffer, protecting you from exorbitant repair or replacement costs. It's typically paid on an annual or monthly basis and may vary based on the home size, style, and age, as well as the location, the selected provider, and the type and scope of the coverage. 

Premiums are often set on leveled packages, with the most basic ones covering only essential home systems, which tend to be the least expensive, while more comprehensive ones that include appliances come at a higher price. Additional factors affecting the premium may include the optional coverage items, such as a swimming pool, spa, or second refrigerator. Each home warranty provider has its pricing structure, and competition within the industry can also influence what a company charges for its plan. Therefore, it's recommended to shop around and compare home warranty prices before making a final decision.

Service Fee

The second object of expenditure you will face getting a home warranty plan is a service fee. Every time you file a claim within your coverage, you pay a service charge covering contractor services, inspection, repair, or replacement. As a rule, the fee amount is set for every covered item and falls within the $65 - $130 range. Some companies may charge higher fees, sometimes as much as $150 or more. 

The price difference results from a couple of factors. First of all, it depends on the coverage level, with comprehensive or premium coverage plans coming at a lower service fee compared to basic ones. Second, individual company policy plays a significant role in determining the amount of service fee. Some companies have a flat rate service call fee for all repairs, while others estimate the fee based on the scope of the job or the nature of the failure. Other cost-affecting factors include the location of the property and the type of appliance or system needing repair or replacement.

Add-Ons

Typically, there is a standard set of home systems and appliances covered by a home warranty. This set may vary from provider to provider but often does not include septic systems, sump pumps, pools, and other complex items that require additional skills and effort to be repaired or replaced. These systems and appliances, though, can be added to your policy for an additional fee, with the average payment for each add-on varying from $20 to $45 per month. Factors like the item's age and condition and the particular make and model of the system or appliance may considerably affect the final estimate. Always check with your provider to get clear pricing for any potential add-ons.

Home Warranty Plans Cost

Home warranty providers offer diverse plans with varying service levels, allowing customers to select offers that precisely fit their requirements without wasting money on unnecessary coverage. Typically, these plans are broken down into distinct combinations that differ from one company to another. However, the basic structure of these plans is often divided into two broad categories: home systems and appliances. This allows the homeowner to cover systems like plumbing and electrical wiring separately, as well as appliances such as refrigerators or dishwashers.

System Plans

System plans typically cover the various critical systems within a home, such as electrical systems, heating and cooling systems, plumbing systems, and more. These may include air conditioning, furnaces, water heaters, ductwork, plumbing pipes, and electrical wiring. This plan is essential for homeowners who want to protect themselves from the high repair costs associated with these major system failures. Fees can vary depending on the company and the plan's specific details, but on average, homeowners can expect to pay between $300 to $600 per year for a home warranty system plan. Remember that prices may also vary based on the size and location of your home.

Appliance Plans

Appliance plans extend beyond a primary home warranty, which solely covers home systems. They are tailor-made to cover the repair or replacement of major household appliances like fridges, ovens, dishwashers, microwaves, dryers, and others. Instead of covering home systems like electrical and plumbing, these plans focus on malfunctions due to wear and tear of these commonly used appliances over time. The advantage of an appliance plan is that it can save homeowners a significant amount of money when a major appliance breaks down. The cost varies based on the number and type of appliances you want to include, but on average, an appliance plan may range from $150 to $400 per year.

Combination Plans

Combination plans are special packages designed to provide comprehensive coverage for both your systems and appliances. Although more expensive than the other offerings, these home warranty plans offer a more cost-effective solution than purchasing two separate policies - one for appliances and one for systems.

In some instances, combination plans are not predetermined but act more like an additional bonus, providing customers the flexibility to choose which systems and appliances they want to include in their coverage. While selecting additional options will undoubtedly increase the total cost of the home warranty plan, it could offer substantial value to homeowners looking for more encompassing coverage.

Home Warranty Prices by Coverage Provider

Understanding the prices and coverage of different home warranty providers can be exhaustive. This paragraph delves into the costs, policies, and scopes of renowned home warranty providers. These companies include American Home Shield, Liberty Home Guard, and First American Home Warranty. The comparative analysis below will significantly simplify making the optimal choice for your home warranty needs.

American Home Shield

American Home Shield (AHS) is one of the most lauded home warranty companies in the US market that offers comprehensive and flexible home protection, including coverage from rust, corrosion, and sediment. This makes AHS a particularly compelling choice for older and historical buildings. The company allows homeowners to customize their coverage and monthly premiums with three unique plans and offers two different service call fee options of $100 and $125. The average monthly rate for an AHS plan is $59.99. It's worth noting that a higher service call fee correlates with a lower monthly payment. AHS has branches in all US states, excluding Alaska and Hawaii, and offers a substantial coverage limit of up to $50,000 per term.

AHS Home Protection Plan Costs

American Home Shield has three major home warranty coverage options, each with its own set of advantages, limits, and pricing options.

ShieldSilver

The ShieldSilver plan covers home repairs and replacement of 14 major systems, such as water heaters, air conditioning, plumbing, electrical, and heating units. It does not cover garbage disposal and HVAC tune-up, as well as repair and replacement of the septic system, smoke detector, exhaust fan, and other units that are only covered in the ShieldGold or ShieldPlatinum plans. 

The cost of the ShieldSilver coverage varies based on the location and the specific terms of a contract. However, on average, you should expect to spend around $30 - $40 per month. Additionally, the service call fee is usually between $100 and $125.

ShieldGold

The ShieldGold plan covers all the items covered under the ShieldSilver one, but it also extends to home appliances like refrigerators, ovens, washers, and dryers - nine units in total. Also, advanced components of plumbing and heating are included in the coverage.

Like the Silver plan, the cost of the ShieldGold plan varies depending on the location and the specific contract terms. Nevertheless, this coverage is slightly more expensive due to the extensive coverage provided. Generally, you should expect to spend from $50 to $60 per month. Service call fees are charged separately, ranging from $100 to $125.

ShieldPlatinum

ShieldPlatinum by American Home Shield is the most comprehensive home warranty plan that the company offers. It offers everything covered under the ShieldSilver and ShieldGold plans, plus additional items. The ShieldPlatinum coverage expands to a broad range of essential home systems and appliances and includes discounts for HVAC tuning, roof leaks, permits, and code violations. Additionally, it provides some extras like unlimited A/C refrigerant and a free annual HVAC tune-up. The coverage limit within this plan goes up to $3,000 per covered item. 

The ShieldPlatinum is the most premium plan, so its monthly cost varies from $80 to $90, depending on the agreed service call fee that lies in the standard range of $100 - $125.

Liberty Home Guard

Liberty Home Guard (LHG) is a known provider of robust home protection plans. With a strong presence in all 50 states, LHG offers competitively priced coverages, ensuring peace of mind for homeowners. Through 42 distinct add-ons, homeowners personalize their coverage, spanning from swimming pools and sump pumps to high-end professional appliances and less common features such as central vacuum systems and roof leak repairs. All these items fall under LHG’s $2,000 coverage limit, with the exception of electrical and plumbing systems. With its service call fee falling between $65 and $125, determined by the size, type, and location of the home, as well as chosen plans, LHG makes the pricing transparent. Additionally, Liberty Home Guard stands out for its 60-day workmanship guarantee on all completed repairs.

LHG Home Protection Plan Costs

Liberty Home Guard presents three comprehensive coverage plans tailored to a variety of homeowner needs. These include the Appliance Guard plan, the Systems Guard plan, and the Total Home Guard plan.

Appliance Guard

The Appliance Guard plan provides repair and replacement coverage for common household appliances. This includes but is not limited to, refrigerators, dishwashers, ovens, washing machines, and dryers. The standard monthly payment for the Appliance Guard is $50. However, it may vary based on the homeowner's individual needs, the number and age of the appliances covered, and their make and model.

Systems Guard

The Systems Guard plan aims to cover the repair and replacement of home systems essential to the daily routine and comfort of homeowners. These are HVAC, plumbing, electrical, and water heating units. As for the cost, the Systems Guard plan is priced at $55 per month, providing economical protection for your essential home systems.

Total Home Guard

Total Home Guard is a comprehensive, all-inclusive plan designed to protect both major systems and common household appliances. It gives homeowners complete peace of mind by covering everything from HVAC systems and plumbing to refrigerators and washers. It is a combination of the Appliance Guard and System Guard plans, making it a perfect choice for total home protection. The Total Home Guard plan typically costs $60.00 monthly, providing a cost-effective solution for comprehensive home coverage.

First American Home Warranty

First American Home Warranty is a seasoned player in the industry with over 35 years of experience. It provides extensive home warranty coverage in 33 states. Notably, it offers the distinctive First American Advantage Upgrade in its mid-tier and comprehensive plans. This unique upgrade caters to overlooked costs like crane removal for appliances. Each plan is accompanied by three service call fee options, starting at a competitive $75, allowing customization to individual needs. However, its most basic plan excludes air conditioning coverage.

First American Home Protection Plan Costs

First American offers a tiered selection of coverage options tailored to various needs: the Starter Plan for basic coverage, the Essential Plan for extended protection, and the Premium Plan for the most inclusive home warranty protection.

Starter Plan

The Starter Plan offers basic coverage for a variety of essential home appliances and systems, providing a cost-effective solution for homeowners seeking reliable protection against unexpected breakdowns. It covers everything from fridges, dishwashers, ovens, and hoods to plumbing and electrical systems. The monthly cost for the Starter Plan typically starts at around $47 for a $125 service call fee and goes up to $62 for a $75 service call fee.

Essential Plan

The Essential Plan focuses on covering essential home appliances and systems, ensuring that any unexpected repairs or replacements do not impact homeowners financially. It covers all systems and appliances offered in the Starter Plan, plus water heaters, washers, dryers, garage door openers, and HVAC systems. Its monthly cost ranges from $57 to $72, depending on the specific coverage details, agreed service call fee, and location.

Premium Plan

The Premium Plan offers thorough protection for homeowners, including all major systems and appliances, as well as luxury appliances and rare utilities. The coverage notably expands to garbage disposal units, central vacuum systems, mini-split units, and window air-conditioning units, offering a broad safety net for diverse home needs. What sets this plan apart is the doubling of the coverage limit. The appliance limit cap is increased to a substantial $7,000 per covered appliance. Starting at only $72 per month, the Premium Plan provides a complete, wide-ranging home warranty solution that offers excellent value for your money.