Homeowner resources, Updated July 2026
Do You Need a Home Warranty? What Every Homeowner Should Know
A home warranty can save you thousands when a major system breaks down, or it can be money wasted on coverage you never use. Here is how to decide.
Disclosure: This page contains affiliate links. If you purchase a home warranty through our links, we may earn a commission at no extra cost to you. This does not influence our analysis or recommendations. Last updated July 16, 2026.
What is a home warranty?
A home warranty is a service contract that covers the repair or replacement of major home systems and appliances when they break down from normal wear and tear. It is not insurance. Homeowners insurance covers damage from events like fire, storms, and theft. A home warranty covers the mechanical failure of things like your HVAC, plumbing, water heater, and kitchen appliances.
What it typically covers
- HVAC systems (heating, air conditioning, ductwork)
- Plumbing (pipes, fixtures, water heater)
- Electrical (wiring, panels, outlets)
- Kitchen appliances (refrigerator, dishwasher, oven, range)
- Washer and dryer
- Garage door opener
What it usually does not cover
- Pre-existing conditions or known defects
- Cosmetic damage
- Items not properly maintained
- Outdoor structures (pools, spas, septic without add-on)
- Code violations or permits
- Roof, foundation, or structural issues
Who benefits most from a home warranty?
Older homes
If your appliances or systems are 8 or more years old, the probability of a major failure increases significantly. A single HVAC replacement can cost $5,000 to $12,000.
First time homeowners
New homeowners often underestimate repair costs. A warranty provides predictable budgeting and a single phone number to call when something breaks.
Budget conscious households
If a $3,000 emergency repair would strain your finances, a warranty spreads that risk across a smaller annual payment and a fixed service fee.
When a warranty may not be worth it
If your home is new (under 5 years old with manufacturer warranties active), you have a well-funded emergency account ($10,000+), or you prefer choosing your own contractors, a home warranty may not add enough value to justify the annual cost.
What does a home warranty cost?
| Plan type | Annual cost | Service call fee | What is covered |
|---|---|---|---|
| Basic / Systems | $300 to $450/yr | $75 to $100 | HVAC, plumbing, electrical, water heater |
| Appliance | $300 to $450/yr | $75 to $100 | Refrigerator, dishwasher, washer, dryer, oven |
| Combo (systems + appliances) | $450 to $600/yr | $75 to $125 | All of the above |
| Premium / Total | $600 to $900/yr | $75 to $125 | Everything plus roof, pool, spa, septic add-ons |
For context: replacing an HVAC system costs $5,000 to $12,000. A water heater runs $1,000 to $3,000. A refrigerator compressor repair is $500 to $1,200. One covered claim can pay for multiple years of warranty premiums.
Get a free home warranty quote
Choice Home Warranty is one of the largest providers in the US, covering all 50 states with plans starting under $50 per month.
- Covers 25+ home systems and appliances
- $50 off your plan, plus first month free for new customers
- Claims available 24/7, 365 days a year
- Choose your own technician or use their network
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How to choose a home warranty provider
Check what is actually covered
Read the contract, not the marketing page. Look at exclusions, coverage caps per item, and whether they cover repairs only or full replacement. Some providers cap payouts at $1,500 per appliance, which may not cover a full replacement.
Understand the service call fee
You pay this fee every time a technician visits, whether the issue is covered or not. Lower annual premiums often come with higher service fees. Calculate the total annual cost based on how many claims you expect to file.
Read the claims process
How do you file a claim? Can you do it online or only by phone? How fast do they dispatch a technician? What happens if the first repair does not fix the problem? These process details matter more than marketing promises.
Look at the cancellation policy
Most providers offer a 30-day money-back guarantee. After that, cancellation may come with an administrative fee. Know the terms before you sign up.
Home warranty vs homeowners insurance
| Home Warranty | Homeowners Insurance | |
|---|---|---|
| Covers | System and appliance breakdowns from wear and tear | Damage from fire, storms, theft, liability |
| Required? | No, optional | Required by most mortgage lenders |
| Annual cost | $300 to $900 | $1,200 to $3,000+ (varies by location) |
| Deductible | $75 to $125 per service call | $500 to $2,500 per claim |
| Example claim | AC compressor dies in August | Tree falls on roof during a storm |
They protect against different risks. Many homeowners carry both.
Frequently asked questions
What does a home warranty cover?
A home warranty typically covers the repair or replacement of major home systems (HVAC, plumbing, electrical) and appliances (refrigerator, dishwasher, washer, dryer, oven). Coverage varies by plan and provider. Most plans do not cover pre-existing conditions, cosmetic issues, or items not properly maintained.
How much does a home warranty cost?
Home warranty plans typically cost $300 to $600 per year, plus a service call fee of $75 to $125 each time you request a repair. Premium plans covering more systems and appliances can run $600 to $900 per year.
Is a home warranty worth it?
A home warranty can be worth it if your home has older appliances or systems nearing end of life, you want predictable repair costs, or you are not handy with home repairs. It is less valuable if your home is new with manufacturer warranties still active, or if you have a large emergency fund and prefer to hire contractors directly.
What is the difference between a home warranty and homeowners insurance?
Homeowners insurance covers damage from unexpected events like fire, storms, theft, and liability. A home warranty covers the breakdown of home systems and appliances from normal wear and tear. They protect against different things and many homeowners carry both.
Protect your home from unexpected repair costs
Get a free, no-obligation quote and see what a home warranty would cost for your home.
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