A home warranty is a type of home protection plan that covers the cost of repairing your most important home systems and appliances should they fail due to normal wear and tear. So if your air conditioner stops working in the middle of summer, or your oven stops working a few days before a big family gathering, you can rely on your home warranty provider to get it fixed right away.
This home warranty guide explains what a home warranty is, what it covers, and how to find the right warranty for your home.
What is a home warranty?
A home warranty is an optional service contract that pays for the repair or replacement of major home systems and appliances if they fail due to normal wear and tear. The average home warranty covers HVAC, electrical, and plumbing systems, as well as kitchen appliances. Some products are even more comprehensive and include washing machines, water heaters, septic systems, and limited roof leak coverage.
“A home warranty can save you thousands of dollars a year in repairs, and that’s my experience as a real estate agent and homeowner. I recommend a home warranty to all my clients who are buying a new home, (but) it depends on the coverage, the insurance, and the frequency of use,” says Jennifer Ohvat, a real estate agent with Compass in Los Angeles.
If your system or appliance stops working, all you have to do is file a claim with your home warranty provider, pay the service call fee, and have a technician diagnose and repair the problem.
How does a home warranty work?
From start to finish, when you purchase a home warranty, you can expect:
- Please select a plan: Once you find the right home warranty provider, select the coverage for the systems and appliances you want to protect. You can often choose between a system plan, an appliance-only plan, or a combo plan.
- Pay your insurance premium: Monthly or annual payments are required to activate coverage. There may be a short waiting period (usually 30 days) before you are eligible to claim.
- When something breaks: If a product covered by the warranty breaks down due to wear and tear, please immediately file a claim with the warranty company. This is as easy as filling out a form online or calling one of our customer service representatives.
- Service dispatch: Your provider will assign a network technician to diagnose and resolve your issue. In some cases, you may be able to select your own service specialist.
- Pay the service fee: There is a service call fee for each visit, typically around $100.
- Repair or replacement: If approved, your home warranty company will cover repairs or replacements up to your plan’s limits.
Hint: Keeping maintenance records will allow you to provide proof of maintenance if your warranty provider requires proof of maintenance before approving your claim.
What is covered by a home warranty?
Home warranty companies offer plans that cover your main home systems, your most important appliances, or a combination of the two.
- home systemincluding HVAC systems, plumbing systems, and electrical systems.
- major home appliancesrefrigerator, dishwasher, clothes washer and dryer, oven, etc.
- additional itemspool/spa equipment, roof leaks, well pumps, septic systems, etc.
Products not covered by home warranty
A home warranty covers the cost of repairs due to normal wear and tear. The most common home warranty exclusions are:
- existing symptoms
- Structural components (walls, windows, doors, roofs, foundations)
- Products covered by manufacturer’s warranty
- Damage due to improper use
- Damage due to improper or inadequate maintenance
- Damage due to improper installation
- surface defects
- pest damage
- Damages from natural disasters (and other issues covered by homeowners insurance)
Difference between home warranty and home insurance
Although home warranties and home insurance may seem similar, they are not the same. Home insurance is often required by financial institutions when purchasing a home, and home warranties are optional additional coverage.
Home insurance protects your home and belongings from unexpected events such as fire, theft, and natural disasters. A home warranty, on the other hand, is a service contract that covers the cost of repairing or replacing major systems and appliances, such as HVAC, plumbing, and kitchen appliances, if they break down through normal use.
How much does a home warranty cost in 2026?
If you anticipate that your home will need repairs, a home warranty policy is low risk and worth the cost. “They’re relatively inexpensive, so there’s very little risk if you’re locked into a deal that’s only $500 or $1,000,” says Brad Dewin of We Buy MD Homes.
According to data collected by USA TODAY’s team, most home warranty plans cost between $35 and $100 per month, or between $420 and $1,200 per year. This makes home warranties affordable for most homeowners, making one service call worth the monthly payments.
Home warranty benefits
Peace of mind is often cited as one of the most common benefits of having a home warranty, but there are several other things that make it worthwhile.
- Predictable budget for home repairs: Instead of paying hundreds or thousands of dollars for unexpected appliance failure, you pay a fixed monthly fee for your home warranty.
- Connect with trusted service experts: If your system breaks down, finding the right repair service can be difficult. Home warranty providers often have a network of service professionals who can come to your home.
- Cover any gaps in homeowners insurance. A home warranty doesn’t replace home insurance, but it does cover the cost of repairing systems and appliances if they get old or break. This is different from home insurance, which covers environmental damage, theft, and vandalism.
- May add value to real estate transactions: Including a home warranty in your home sale, especially if your home is older, can help attract buyers and make it easier to sell your home.
- Coverage for older systems and appliances: Old systems and appliances can fail at any time, and often at the most inconvenient times. A home warranty provides peace of mind that you are covered in the event of an unavoidable breakdown.
What to consider before purchasing a home warranty
A home warranty is not a pass for unlimited free repairs to your home. These home service plans are useful if your breakdown qualifies, but there are a few things to keep in mind before purchasing.
- Coverage limits may not cover the entire cost of repair or replacement. Plans have both aggregate (total) coverage limits and individual system/appliance coverage limits. If the repair cost exceeds one or both of these amounts, you will be required to pay the difference. However, many repairs fall within specified warranty coverage.
- It may not be covered by compensation. Home warranties don’t cover everything, and some common problems may not be covered, such as breakdowns due to improper maintenance.
- Your claim may be denied. Your home warranty provider will deny your claim if the exclusion states the reason your appliance or system failed.
- You will be charged a call fee for each visit. You are responsible for paying the service call fee for each repair, as well as paying your deductible.
- Repairs are not always quick. Response times vary by home warranty provider, but don’t be surprised if it takes up to 72 hours for a service professional to be dispatched to your home. It may take additional time for parts to arrive to complete the repair.
Hint: Always read the contract and check the fine print. This will make it easier to understand the exclusions so you know what is covered.
Alternatives to home warranties
Home warranties aren’t the only option to cover unexpected home appliance or home system failures. If you don’t want to pay for a home warranty every month (or don’t need it yet), the following alternatives may be better options.
- Build up an emergency savings fund
- Register appliances and systems for manufacturer warranties
- Look for extended product warranties that continue after the manufacturer’s warranty has expired
- Obtain a Home Equity Line of Credit (HELOC) to cover home improvements.
Where can I buy a home warranty
Companies like American Home Shield, Cinch HomeWarranty, and Liberty Home Guard are reputable home warranty providers that offer comprehensive coverage at an affordable price. Enter your zip code in the map below to see which home warranty companies are available in your area.
FAQ
What does a home warranty mean?
Home warranties are designed to pay for the repair or replacement of broken home systems and appliances. If the damage is covered by warranty, you only pay the service call fee, and your home warranty company covers the rest (up to certain coverage limits).
What are the disadvantages of a home warranty?
Because a home warranty only covers damage due to normal wear and tear, your system or appliance may not be covered if the damage falls under an exclusion.
What does a home warranty cover when purchasing a home?
Home warranties cover your home’s major systems and appliances, including your HVAC system, electrical system, and kitchen appliances. If one of these fails due to normal wear and tear, your home warranty will cover the cost of repair.
