A home warranty costs $350-$600 per year and covers repair or replacement of major home systems and appliances when they break. It can provide peace of mind for first-time buyers on a tight budget, but coverage limits and service fees apply. Read the fine print carefully.
What Home Warranties Cover and Cost
Home warranties cover major systems (HVAC, plumbing, electrical) and major appliances (refrigerator, oven, dishwasher, washer/dryer). Each service call costs a service fee of $60-$125. The annual premium is typically $350-$600. Coverage limits apply per item (e.g., $1,500 max for HVAC repair). Pre-existing conditions and improper maintenance are not covered.
Are They Worth It?
A home warranty is most valuable in the first year of ownership when you are still learning the property's systems. If the HVAC system is old or the appliances are near end-of-life, a warranty can save you thousands. If everything is new or recently replaced, the warranty may not pay off. Many sellers offer a year of home warranty as a concession to buyers. Read reviews of the warranty company before buying.