What does a home warranty cover?
A home warranty is a service contract that helps cover the cost of repairing or replacing certain major home systems and appliances if they break down due to normal wear and tear. Coverage often includes items such as:
- HVAC systems
- Electrical systems
- Plumbing
- Water heaters
- Kitchen appliances
- Laundry machines
Unlike homeowners insurance—which typically protects against damage from events like fires, storms, or theft—a home warranty focuses on mechanical failures and aging components.
How long do home warranties last?
Home warranties normally last for one year—though some last up to three years1—and are typically renewable annually, with homeowners paying a monthly or annual premium plus a service fee each time a technician provides service. Coverage details, exclusions, and costs can vary widely depending on the provider and the specific plan selected.
How much do home warranties cost?
Typically, a home warranty can cost anywhere between $564 and $9842 a year, which means around $47–$82 per month. Add that to a service call fee of $75–$125 each time a technician visits for repairs.
Home warranties are sometimes purchased during a real estate transaction. Sellers may offer one as part of the deal to reassure buyers that covered systems and appliances will be protected during the first year of ownership. Buyers, particularly first-time homeowners, may see value in knowing certain unexpected repair costs could be a bit more predictable early on.
When do home warranties make sense?
For current homeowners, a home warranty might make sense in situations where major systems or appliances are aging and no longer under manufacturer warranties. Instead of paying the full cost of a repair or replacement out of pocket, homeowners pay a predefined service fee, though it’s important to note that coverage limits, exclusions, and approval requirements can apply.
What doesn’t a home warranty cover?
At the same time, home warranties are not maintenance plans2 and do not cover issues caused by improper installation, lack of maintenance, or pre-existing conditions. Homeowners should review their contract terms carefully and understand what is and isn’t covered when deciding whether a plan aligns with their needs and expectations.
Ultimately, a home warranty is one of several tools homeowners could consider as part of a broader approach to protecting their investment. Whether it makes sense depends on factors such as the home’s age, the condition of its systems, and personal comfort with managing repair costs.
