How Much Does a Home Warranty Cost Per Year?

When it comes to home warranties, there are a lot of things to consider. How much does it cost per year?

What kind of coverage do you need?

What company should you go with? These questions are crucial that need answers. 

In this article, we will explore the cost of home warranties per year and what factors play into that number.


How Much Does a Home Warranty Cost Per Year?

The average cost of a home warranty is $500-$700 per year. However, the cost can be different depending on the type and coverage you need. 

For example, if you have a high-end home with many appliances, you will likely need to pay more for your warranty than someone with a smaller home and fewer appliances. 

On the other hand, if you only need coverage for basic systems and appliances, you can expect to pay much less. 

Read: How Do We Review Home Warranty Companies?

Also Read: Is Home Warranty Worth It?

What Factors Affect the Cost of a Home Warranty?

What Factors Affect the Cost of a Home Warranty

Several factors affect the cost of your home warranty. Some of these include:

  • The Size of Your Home: The square foot of your house will affect how much your warranty costs. The larger your home, the more you can expect to pay. 
  • The Age of Your Home: Older homes typically need more repairs than newer ones. As such, home warranties for older homes tend to be more expensive. On the other hand, modern homes with up-to-date appliances may cost less to warranty. 
  • The Number of Appliances: The more appliances you have in your home, the more it will cost to cover them. This is because there is a greater chance of something going wrong and needing to be repaired or replaced. 
  • The Deductible: Deductible is the amount you have to pay out-of-pocket before your home warranty coverage kicks in. A higher deductible means a lower premium but also more risk for you. 
  • The Location of Your Home: The location of your home can affect your home warranty costs. For example, homes in disaster-prone areas (such as those prone to hurricanes or earthquakes) will typically cost more to insure than homes in more stable areas. 

What’s the Best Way to Shop for a Home Warranty?

When it comes to opting for a home warranty, there are a few things you need to keep in mind. 

  • Type of Coverage: First, you must decide what coverage you need. Do you want a basic plan that covers your major appliances, or do you need a more comprehensive plan that covers your home’s systems as well? 
  • Budget: Once you know what coverage you need, you can start shopping around and comparing prices. Make it a point to get quotes from multiple companies to find the best deal. 
  • Reviews: Don’t forget to read reviews before choosing a home warranty company. This will help you eliminate the bad apples and find a reputable company to give you the coverage you need. 

Also Read: Select Home Warranty Review

Also Read: American Residential Warranty Review

Pros & Cons Of Home Warranty


  • Saves money
  • Offers peace of mind
  • Customizable coverage
  • Repairs are done by trusted professionals


  • Adds to your monthly bills
  • Claims may get denied
  • Repairs should fall under the coverage cap

Average Cost Of Common Repairs

System/ApplianceAverage Cost
Dishwasher Repairs$150
HVAC Issues$150 – $450
Roof Repairs$650
Electrical Issues$300
Septic Issues$1,500
Leaky Faucet$90 – $350
Toilet Leaks$60 – $225
Water Heater Repairs$571

What Does a Home Warranty Cover?

What Does a Home Warranty Cover

This is what you can typically expect a home warranty to cover:


Home warranties cover common household appliances such as dishwashers, refrigerators, dryers and washers, ovens, microwaves, stoves, trash compactors, etc.

A homeowner can raise a claim if any of these appliances break due to regular wear and tear. Upon paying a small service fee, the homeowner can get the appliance fixed or repaired up to the coverage cap.


Home warranties also cover major systems such as electrical systems, HVAC, plumbing, etc. Some companies also offer add-ons such as septic systems, central vacuum, roofing, fire alarm, etc.

One thing worth noting is that some companies may require you to show maintenance or age proof for the above-mentioned appliances and systems. So keep them handy.

What Does Home Warranty Companies Don’t Cover?

Home warranties are not all-encompassing and have some exclusions that you should take note of.

Most typically, a home warranty company will not cover the following:

  • Pre-existing conditions
  • Pest damage
  • Damage caused due to natural disasters
  • Damage from leaks
  • Structural damage
  • Installation damage, etc.

Best Warranty Companies & Their Cost

Home Warranty CompanyMonthly PlansService FeesPayout cap
The Home Service Club$50 -$60/mo$75 and $125$6000 – $9000
Cinch$27.99/mo – $39.99/mo$75 and $125$2000
First American Home$28/mo – $42.50/mo$85$1500
Select Home warranty$60.42/month – $65.83/month$75 and $120$2,000
American Residential Warranty$39.99/month $124.99/month$55$5000

Bottom Line

In conclusion, the average cost of a home warranty is $500-$700 per year. This is a wide range, so it’s important to shop around and compare prices before choosing a company.

Make sure that the size of your home, the age of your home, the number of appliances, and your location can all affect the cost of your warranty. 

Also Read: What Is The Waiting Period For A Home Warranty?


Is it necessary to have a home warranty?

No, it is not necessary to have a home warranty unlike a home insurance that lenders require from the borrowers to carry.

Is a home warranty worth it?

Yes, home warranties are worth it and save you from the unexpected cost of repair and replacement.

This comes in especially handy if you are buying a pre-owned house or have older appliances in your existing home. 

When is the right time to purchase a home warranty?

You can purchase a home warranty anytime you like.

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