Purchasing a home warranty depends on the homeowner’s circumstances and risk tolerance. When considering purchasing a home warranty, homeowners should evaluate the cost of the warranty, the age and condition of the home, utility systems and appliances, and their financial ability to handle potential repairs before ultimately deciding if the policy is necessary.  

See the differences between a home warranty and a homeowners policy below:  

Home warranty insurance: 

• Covers damage due to normal wear & tear 
• Covers home lines, systems and appliances such as HVAC, electrical, plumbing, gas, water, sewer, major appliances, thermostats, etc.  
• Is helpful if you have old appliances and systems in your home 

Homeowners insurance: 

• Covers damage caused by unforeseen circumstances such as calamities, accidental damage, etc.  
• Covers structural property, personal belongings, provides liability protection 
• Covers contents of the house, personal property, such as jewelry, electronics, furniture or clothing 
• Covers events like theft, fire, falling objects and liability claims  

Homeowners pay a monthly or yearly premium to maintain their home warranty coverage. When a covered item in the home needs to be serviced, repaired, or replaced, the homeowner submits a claim to the program administrator. The administrator takes the call and determines the next steps. A licensed and insured service provider is then dispatched to the home to investigate and, when needed, provide repair or replacement to resolve the claim. In this process, the homeowner is protected from paying for the unforeseen costs related to the breakdown. Depending on the coverage, some programs may require the homeowner to pay a small deductible. 

A home warranty generally covers major systems and appliances throughout the house. The coverage varies by company and plan, but a typical home warranty can cover any of the following: 

• Heating, ventilation and air conditioning system (HVAC) 
• Gas line 
• Electrical system (interior or exterior) 
• Plumbing and drainage system 
• Water service line 
• Sewer/septic system 
• Water heater 
• Appliances, such as fridge/freezer, stove/oven/range, built-in dishwasher, built-in microwave, garbage disposal, built-in trash compactor 
• Washer and dryer 
• Garage door opener 
• Coverage for pools, spas, well pumps 
• Smart thermostats 
• Surge coverage 

The cost of a home warranty will vary by company and coverage plan. When considering a home warranty, homeowners should list the home’s major appliances and systems, their ages, and which are most at risk of breaking down or needing replacement. Then, the homeowner can decide which home warranty would best meet their needs. 
 

On average, a home warranty costs around $25-$150 per month. However, there could be additional charges for optional add-ons, deductibles (anywhere from $50-$200), and service fees (typically $60-$100 each time a technician comes to your home). If a major repair or replacement item is needed, such as an HVAC system that can cost anywhere from $5,000 to over $12,000 to replace, sometimes a home warranty can practically pay for itself.  

Home warranties and homeowners insurance can provide comprehensive protection for your home and property. These services will help you save on expensive repairs and replacements, protect your valuable assets, and, most importantly, give you peace of mind. 

Take the time to research home warranty companies before you purchase a policy. There are many home warranty companies, but finding the right one for your needs is essential. Real estate brokers or home inspectors often recommend their home warranty partners during a home purchase.  

Home warranty programs can be purchased at any time, no matter the age of the home, appliances or utility systems. Most often, these policies are purchased at the time of a home purchase, especially if there are older appliances in the home that are no longer covered by manufacturer warranties.  

It is important to read the policy to understand what is not covered under a home & utility warranty program. Home warranties do not cover “improperly maintained” items – and the warranty company has the discretion to define what that means – and items with pre-existing conditions also are not typically covered. Extensive damage could mean out-of-pocket expenses for the homeowner, or the warranty may only cover repairing items rather than entirely replacing them.