A home warranty is not the same thing as homeowners insurance, nor does it replace it. Homeowners insurance protects against major perils such as fires, hail, property crimes, and certain types of water damage that can affect the entire structure or your personal belongings. A home warranty, on the other hand, is a separate contract that covers repairs and replacements for systems and appliances in your home—typically for one year. (If you’re purchasing new construction, your builder often provides a one-year builder’s warranty before the home warranty coverage begins.)
What Does a Home Warranty Cover?
Policies differ depending on the provider, but most home warranties cover your home’s internal systems and appliances—such as electrical, plumbing, HVAC, and kitchen appliances. They typically do not cover exterior components like roofs, fencing, decking, landscaping, detached garages, or water intrusion due to roof issues. Costs and coverage vary widely, so always compare policies before purchasing.
On average, home warranties range from $325–$700 and last for one year from purchase. Keep in mind that items must be in working order before coverage begins. If your home includes specialty appliances (like dual ovens, a second dishwasher, or a wine fridge), you may need to purchase premium or optional coverage to include those items.
Who Pays for the Home Warranty?
It depends. Sometimes we negotiate for the seller to pay for the home warranty as part of your contract. In that case, the warranty details will be provided to you at closing. If the seller is not providing one, you can purchase a policy yourself prior to closing and have it begin on your closing date.
How Much Does a Home Warranty Cost?
The cost depends on your home’s age, size, and coverage level—usually between $500 and $1,000. Most warranty companies charge a service call fee of about $75 per visit. Beyond that fee, repairs are typically covered at no additional cost.
What If an Appliance Can’t Be Repaired?
The home warranty company will attempt to repair the item first. If repair isn’t possible, they’ll replace it with a model featuring similar capabilities. For example, if your refrigerator includes an ice maker and water dispenser, your replacement will include those same features—but likely not the same brand. Many companies, such as American Home Shield, replace appliances with GE models. If you prefer a higher-end brand, most warranty providers will issue a cash equivalent of the replacement model’s value so you can upgrade on your own.
Where Can I Buy a Home Warranty?
If the seller isn’t providing a home warranty, you can purchase one directly from a provider. We recommend Choice Home Warranty for both buyers and sellers. Be sure to set the start date for the day of closing to ensure continuous coverage.
💡 Tip: When used properly, a home warranty can save you thousands on home repairs and reduce the stress of unexpected maintenance during your first year of ownership.