How Much Does a Home Warranty Cost?

The average home warranty plan costs $58.40 per month in 2024, but the price you’ll actually pay depends on several factors, including your location and the coverage you choose.

Average home warranty fees

A home warranty plan usually comes with a monthly premium and a service fee.

A premium is a monthly fee that depends on several factors such as where you live and the coverage you choose. The average monthly premium for a home warranty plan is $58.40, which comes out to $700.80 a year.

This amount is usually the same each month, and you’ll pay it even if you don’t need an item repaired during that month. You’ll pay monthly premiums throughout the term of your home warranty service agreement.

During our research we requested quotes from several companies using different ZIP codes in three states, each of which represented a different cost of living. Here are a few key numbers we found in our research:

• The cheapest quote was $19.99 per month.

• The most expensive quote was $119.90 per month.

• The average cost of the cheapest plans was $45.54 per month ($546.48 annually).

• The average cost of the most expensive plans was $71.25 per month ($855 annually).

Most home warranty companies require customers to pay a service fee, sometimes called a trade fee, every time a technician responds to a claim. Service fees may be somewhere in the $65-$150 range (or higher or lower).

• Customers usually have to pay service fees even if they can’t choose their own technicians, the technician can’t repair the item during that visit or the claim is denied because of the technician’s diagnosis.

• Some companies have set service fees that every customer pays regardless of their chosen plan, while others allow you to select the service fee amount when you purchase a home warranty plan. Generally, the higher the service fee, the lower the monthly premium.

• A reputable home warranty provider will tell you what your service fee will be before you purchase a plan, and most of them state the fee in your service agreement.

How the cost of a home warranty is calculated

Several factors go into the final price of your home warranty premium, including your location, the plan you choose, your service fee and more.

Some plans charge different prices in different areas. This can vary by state, city and even ZIP code. For example, in Texas, basic home warranty plans run an average of $3.18 cheaper per month than the national average for the same plans. However, the price for the same type of plan in Dallas is typically more expensive than the state and national averages.

Prices in a major city can vary from area to area as well. Among the quotes we requested from American Home Shield, for example, monthly premiums were $30 more per month for a ZIP code in north Dallas compared to quotes for the same plans for a ZIP code in south Dallas.

The plan you choose will also affect your monthly premium. The better the coverage, the more expensive the plan. This is true for most home warranty providers.

Some providers offer cheaper plans all around, while others are known for more expensive premiums. The provider you decide to go with will determine the rate you pay. For example, among the quotes that we gathered for Dallas, American Home Shield offered the cheapest basic plan, and Choice Home Warranty offered the cheapest premium plan.

Adding coverage outside of a plan’s items will increase your premium as well. Optional coverage is often available for things such as pools and spas, water softeners, additional refrigerators, septic systems, well pumps and roof leak repairs. How much each additional item increases your premium depends on the provider.

If you have the option to choose your service fee, your selection will affect your monthly premium.

Most home warranty plans typically cover primary structures that are 5,000 square feet or fewer. If a plan allows you to cover a house that is larger than its standard size, you might pay more for the additional coverage.

Most home warranty plans have coverage limits. The coverage limit is the maximum total amount that the provider will pay to repair or replace a covered item. If a repair or replacement costs more than the coverage limit, you’ll have to pay the difference.

For example, if your service agreement says that the coverage limit for HVAC repairs is $2,000 and the cost to repair your air conditioning unit is $2,350, you’ll have to pay $350 of the bill.

Not all home warranty plans have coverage limits on every item, but that doesn’t mean that the provider will pay for every repair. So if you’re thinking of getting a home warranty plan, estimate how much you can afford to pay out of pocket if your plan doesn’t cover the full cost of a repair.

How to save money on home warranties

Although home warranty providers set their own prices, there are three things you can do to save money on your plan.

1. Only get the coverage you need. Some home warranty providers have plans that are comprehensive and cover a mix of appliances and home systems like air conditioners. Others have appliance-only and system-only plans. Whichever type of plan you go with, pay attention to what’s covered to avoid paying for more coverage than you’ll use.

2. Ask for discounts. Some home warranty providers offer discounts for certain groups, such as older adults or veterans. When talking with a representative, ask what discounts are available and compare them to other companies’ discounts.

3. Get multiple quotes. Research companies and ask for quotes from several of them to compare your options. Don’t be afraid to be honest with a provider’s representative if you call for a quote — tell them you’re shopping around and want the best price. They might be able to get you a bit more of a discount than you planned.