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What Does a Home Warranty Cost? A Few Factors to Consider

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Photo by Scott Webb on Unsplash

Making sure your home’s appliances and major systems are working is a large part of homeownership. If something breaks down, you’ll typically have to foot the cost yourself unless you choose a home warranty. When considering your available options, one of the most pressing questions you might have is, “How much will this home warranty cost me?”

Average Home Warranty Cost

In terms of a home warranty’s cost, the national average for 2019 is a little over $800 per year. However, that cost can range quite a bit depending on several factors. In some cases, basic coverage may be as low as $50, while high-end coverage may reach into the thousands.

The premiums you pay cover the repairs and replacement of your home’s appliances and important systems, such as heating and cooling, electric, etc. When something breaks down, you give your home warranty company a call, and they’ll send someone from their network of contractors to diagnose the problem. From there, the company will determine whether the problem is covered. If it is, they’ll pay the cost, potentially saving you thousands in home repairs.

Your Location

Your average home warranty cost depends in part upon your location. Some places tend to have higher costs of living than others, potentially influencing the pricing. An average home warranty in Los Angeles, California, for instance, costs far more than one in Phoenix, Arizona.

Different areas may also have different services available, with some types of coverage only being offered in certain states. For instance, AHS’s re-key coverage is currently only available in Arizona, California, Florida, Nevada, and Texas. Other types of service, while offered everywhere, may cost more in some places than in others, potentially influencing the cost further.

What You Want Covered

The appliances and systems you want covered will play a large role in how much your home warranty costs. Naturally, a plan that covers more items will cost more than one that covers fewer, and a total coverage plan will be pricier than one that only covers either appliances or systems.

Not only is the number of systems a factor, but the make and model are factors as well. Different brands cater to different price ranges, and they may also have varying levels of quality. This means some appliances could be more prone to breaking down than others, meaning they would require more coverage.

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Some items may also be excluded as well, which is worth looking at when determining the right plan for you. For instance, if a certain part of your particular air conditioner condenser is prone to breakage, and if that part is excluded from a specific contract, you might benefit more from a more comprehensive plan.

Service Fees

Outside the premiums, another home warranty cost comes in the form of service fees. When one of your covered items needs service, you’ll typically need to pay a Trade Service Call Fee in order to get service. The fee will typically range between $50 and $75, and that’s paid each time you call your home warranty company for service on an appliance or system.

This means if you have a unit that’s not prone to breakdowns, you’ll often have lower coverage costs. In the event that it needs replacement, however, that small fee would be far easier to manage than footing the entire bill yourself.

The Company You Choose

A final factor in your home warranty cost is the company you choose. Some cost less than others, but may not necessarily offer the same levels of coverage. The quality of their contractor networks may be subpar, and the service you receive may not be satisfactory. This will ultimately mean your premiums are wasted, constituting a large expense with no yield.

On the other hand, some companies may cost a little more, but offer more coverage and better service. It’s important to do research on home warranty companies in your area to determine which one will give you the coverage you need at a price you can afford.

In many cases, the cost of a home warranty turns out to be less than the emergency repairs you’d need on your appliances and systems. As such, it’s worthwhile to research your options and invest in the right plan for your situation.

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