- A home warranty protects appliances, systems like heat and plumbing, in your home.
- It's different from homeowners insurance, which covers damage to your house or personal belongings.
- A home warranty is optional, while homeowners insurance is often required by mortgage lenders.
If you're a homeowner or are about to close on a new house, you might be well aware that you need homeowners insurance. This is especially true if you have a mortgage — often, lenders will even require you to show proof of homeowners insurance. After all, you want to protect your home since it's likely one of the largest purchases — if not the largest — in your life.
But what about a home warranty? Do you need this as well, and how is it different from homeowners insurance? Let's take a look.
What is a Home Warranty?
A home warranty or home repair insurance is protection you can buy for your appliances and home systems. Just as you might purchase a warranty for your cell phone or your microwave, you can purchase a warranty for your home.
How Home Warranties Differs from Home Insurance
A home warranty isn't insurance — it's an optional service contract. Home warranties cover maintenance issues for equipment and appliances, not structural issues.
Homeowners insurance is not required by state law. However, if you have a mortgage, your lender will require homeowners insurance to protect the investment. There are three components to homeowners insurance: dwelling coverage, personal property coverage, and personal liability coverage.
Homeowners insurance covers your property from damage, which is often referred to as insurance perils. A peril is an event that may damage your home or belongings. Common insurance perils include fire, lightning, theft, ice, snow, sleet, smoke, vandalism, and freezing.
If your home is damaged by a tree, fire, or hail, you can have it repaired or rebuilt under dwelling coverage. Your dwelling consists of your home and "other structures" on the property, like a garage or shed. Personal property coverage includes your furnishings and electronics.
Liability coverage protects you if someone is injured on your property and sues you for damages.
If your dog bites someone or someone is injured on your trampoline or swimming pool, liability coverage protects you. If your house is uninhabitable due to a covered accident, additional living expenses will cover the costs of relocation.
Homeowners who live in disaster-prone areas — flooding, earthquakes, tornadoes, hurricanes — will need to purchase additional coverage like riders and home insurance riders.
What’s Covered Under a Home Repair Insurance Plan?
A home warranty covers the cost of replacing or repairing certain home systems — think the air conditioning, electrical systems, HVAC, and water heaters — should they break down. A homeowner warranty insurance plan might also cover home appliances, including those in the kitchen, like microwaves and ovens.
Home warranty companies also often offer add-ons that you can use to supplement your coverage beyond what their various packages offer.
Who Needs a Home Warranty Policy?
Not every homeowner needs a home warranty policy. However, if you choose to purchase a home warranty, you can rest easy knowing you’ll be covered if your appliances or other home systems need repairing, and you could also end up saving money on those repairs.
Before purchasing a home warranty policy, it’s a good idea to make sure the coverage makes sense for your budget. You can compare the cost of a home warranty plan against the average cost of repairs for things in your home that you’d expect to use a home warranty plan for. For example, if the cost to repair your dishwasher is more than the annual cost of a home warranty policy, then it’s usually worth considering.
Even if you can afford to pay for repairs out of pocket, it may be nice to have a plan in place. For instance, if your dishwasher breaks, you’d have to find a repair person to call or consider fixing it yourself. With a home warranty, you’d call the company that provides coverage, and they’d send a vetted professional to your home.
What Do Home Warranties Cover?
Appliance Repairs (Refrigerators, Ovens, Washers, Dryers, etc.)
Home insurance warranty plans typically cover repairs, servicing, replacement, and some maintenance on home appliances. Depending on the type of coverage you purchase, this may include your:
- Refrigerator
- Oven
- Stove
- Dishwasher
- Washing machine
- Dryer
HVAC, Plumbing, & Electrical System Coverage
In addition to home appliances, home warranties often provide protection for major home systems. Common examples include:
- HVAC (heating, air conditioning, and ductwork)
- Electrical
- Plumbing (toilets, water heaters, garbage disposals, etc.)
What’s Not Covered by a Home Warranty Plan?
A home warranty doesn't cover the walls and structure of your home. It also typically won’t cover existing conditions or damages caused by lack of maintenance or improper installation.
When shopping around for a home warranty plan, be sure to read the exclusions listed in the contract. This will tell you exactly what that particular policy does not cover. Warranties will vary by plan or policy and also by provider.
For instance, some home warranty plans will cover HVAC systems, but exclude specific parts from the contract. Determining the cost to repair or replace parts that are excluded from a plan can help you decide if the home warranty is worth it for you.
How Much Does Home Warranties Cost?
On average, a home warranty costs anywhere from $350 to $700 per year.
Average Home Warranty Insurance Costs by Plan Type
Here’s the average annual cost of a home warranty plan, according to Angi.
| Home warranty company | Average annual cost |
| America’s First Choice Home Club Home Warranty | $675 |
| American Home Shield Home Warranty | $1,240 |
| Choice Home Warranty | $740 |
| Cinch Home Services Home Warranty | $980 |
| First American Home Warranty | $700 |
| Liberty Home Guard Home Warranty | $670 |
| Select Home Warranty | $560 |
| 2-10 Home Buyers Warranty | $640 |
Factors That Affect Home Repair Insurance Pricing
The cost of a home warranty depends on a number of things. These factors usually include:
- Where you live
- The size of your home
- The company that is providing the warranty
- The specific policy and level of coverage you choose
Comparing Monthly Premiums vs. Service Fees
You'll pay either a monthly or annual fee. Home warranties on new homes usually have coverage limits. For instance, appliances could be covered for the first year, along with paint and drywall, and the HVAC and plumbing systems could be covered for two years.
Besides the cost of the policy itself, there are a few fees to keep in mind. For instance, there's typically a service fee you're responsible for paying when contractors come to your home to fix an appliance or home system. This is typically $75 to $125.
Best Home Warranty Insurance Companies in 2025
Top Providers for Comprehensive Home Warranty Coverage
A home warranty is different from homeowners insurance, so you'll need to purchase a home warranty from a company that specializes in it. You don't typically get a home warranty from a homeowners insurance company.
Some of the best home warranty companies include:
- American Home Shield
- America's 1st Choice Home Club
- Cinch Home Services
Each has slightly different rules and limits, so you'll want to do your research and comb through the fine print.
Best Homeowners Repair Insurance for Budget-Friendly Protection
The best price for homeowners repair insurance will depend on your location and the level of coverage you need. Here are a few home warranty companies that offer competitive, affordable rates:
- Select Home Warranty
- 2-10 Home Buyers Warranty
- America’s First Choice Home Club
- Liberty Home Guard Home Warranty
Additionally, you’ll want to keep in mind that many warranty providers charge not only a monthly fee but a service fee as well. The monthly fee is a regular payment you make to keep your plan active, and the service fee is usually paid whenever something goes wrong, and you need to put the warranty to use.
Comparing Plans: What to Look for in a Home Warranty Provider
A home warranty could be a great way to provide some peace of mind and save you money should an appliance or home system break down. However, you'll want to know all the rules, exclusions, and limitations before you make a decision.
Be sure to do your due diligence: ask plenty of questions beforehand, compare warranties from different companies, and read the fine print.
How to Choose the Best Home Repair Insurance Plan
How to Compare Home Warranty vs. Homeowners Insurance
Homeowners insurance doesn't cover damage due to lack of proper maintenance or wear and tear. Likewise, many home warranties may have exclusions if there is improper maintenance.
Here’s a list of what’s typically covered in a home warranty vs homeowners insurance:
| Coverage | Homeowners Insurance | Home Warranty |
| Dwelling/Structure | Yes | No |
| Personal liability | Yes | No |
| Personal belongings | Yes | No |
| Loss of Use (additional living expenses) | Yes | No |
| High-end electronics/special jewelry | Limited, requires add-on* | No |
| Equipment breakdown | Yes**** | Yes |
| Electrical outage | Yes* | No |
| Service lines | Yes* | No |
| Cyber liability | Yes* | No |
| Water damage | Yes | No |
| Flood | No** | No |
| Wind or hail | Yes, but not high winds*** | No |
| Earthquake | No* | No |
| Appliance (AC/HVAC/water heater, etc) - repair | No | Yes |
| Appliance (AC/HVAC/water heater, etc) - replacement | Maybe**** | Yes |
*Available as add-on coverage if not part of policy
**Flood insurance is available through the NFIP and approved insurers
***If you live in hurricane or tornado areas, additional windstorm rider may be required
****Only if damaged due to an insurance peril
Understanding Deductibles & Claims Processes
A home warranty deductible is often referred to as a service fee. This is the amount you’ll pay to the provider in the event that something breaks and needs to be repaired or replaced.
Usually, a home warranty deductible is a flat fee that the provider asks you to pay before any work is done. Service fees generally cost anywhere from $75 to $125, depending on the provider and plan.
The claims process for home warranties is straightforward. When something goes wrong, first check that it’s covered by your policy. Then, contact your home warranty provider and let them know about the damage. Your provider will help you file a claim and get a professional out to your home to review what’s going on.
Once they determine that the damage is indeed covered by your plan, they will begin the repair or replacement process. Remember that each plan has its limits, which should be clearly described in your policy contract. If the repairs or cost to replace exceeds your policy limits, then you will be expected to cover the extra costs.
How to Get a Home Warranty Insurance Quote
Where to Compare Home Repair Insurance Plans Online
You can easily compare home owner warranty insurance quotes online by going directly to a provider’s website and requesting a quote. Another option is to use an online tool, like Insurify, where you can compare quotes from multiple providers on one platform.
Aside from cost, you’ll want to consider service fees, coverage, exclusions, policy limits, and optional add-ons from each provider.
What Information You Need to Get an Accurate Quote
Getting a home warranty quote is simple and fast. When you request a quote online, most providers will ask you for your address, contact information, and some basic information regarding the condition of your home.
How to Bundle Home Warranty Coverage with Home Insurance
Most home insurance providers don’t offer home warranty plans, which limits your bundling options. However, some home insurance companies partner with home warranty companies to let you bundle coverage.
For example, Progressive Home Insurance has a partnership with Cinch. Cinch Home Services offers home warranty plans to protect your home systems, appliances, and more.
Pros & Cons of Home Warranties
| Pros | Cons |
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Alternative Ways to Save on Home Repairs
A home warranty plan isn’t right for everyone. Some homeowners may prefer a do-it-yourself approach, and others may consider these alternatives:
- Relying on the manufacturer’s warranty for new appliances.
- Purchasing an extended warranty from the place that sold you the appliance or home system.
- Setting money aside for home repairs, such as a dedicated home emergency fund.
- Use purchase protection coverage provided by your credit card when you use it to buy the appliance or home system.
Compare Home Warranty Companies
FAQs
What are home warranties?
Home warranties are optional protection plans that typically cover repairs and replacements for major appliances and home systems due to normal wear and tear.
How much does home repair insurance cost?
The average cost of home repair insurance is around $350 to $700 per year. Prices will vary based on coverage level and provider.
What's the difference between home warranty insurance and homeowners insurance?
A home warranty covers home system and appliance breakdowns due to regular use, whereas homeowners insurance covers damage from perils, such as fire and storms.
What's the difference between home warranty and home insurance?
A home warranty covers home system and appliance breakdowns due to regular use, whereas homeowners insurance covers damage from perils, such as fire and storms.
Do home warranties cover roof repairs?
Roof repairs are not usually included in standard home warranty plans, but additional coverage can be purchased.
Where can I compare home warranty insurance quotes?
You can compare home owners warranty insurance plans through provider websites or online marketplaces. Some insurance brokers that offer bundled coverage options may also be able to help you compare home warranty quotes.
