How much does a home warranty cost?
With so many home warranty companies out there offering all types of optional coverage, add-ons and exclusions in their service contracts, it can be tough to figure out what exactly you are paying for and whether the coverage is worth the investment.
For instance, you may initially think that you don’t need additional coverage for your home’s air conditioner or heating system because you already have a manufacturer’s warranty on those items. What many homeowners do not realize is that normal wear and tear on these major systems may not appear until far past the expiration date of the original manufacturer’s warranty. And on top of that, most manufacturer warranties only cover the cost of the part and not the labor itself to repair or replace it. This is where having a home warranty that covers built-in systems like your HVAC system and major appliances like your dishwasher can really save you money on repair or replacement costs.
Whether you are among those new home buyers looking around for the most advantageous home warranty contract or are the proud owner of an older home who would just like a little additional coverage, this article will offer insights into how home warranty providers price their plans and what is generally considered a covered item under most standard policies.
Home warranties explained
In essence, a home warranty is a one-year agreement between a homeowner and a home warranty company that offers assistance when it comes to the repair or replacement of failed major appliances and home systems. Should these major appliances and built-in systems break down due to normal wear and tear within that one-year contract, the home warranty can help pay for the cost of a covered repair.
However, it is important to differentiate between your home warranty and your home insurance policy. These come from distinctly different service providers that offer separate types of coverage. While home warranties are optional coverage for key components of your home, homeowners insurance is required coverage by mortgage lenders that protects your home in the event of unavoidable and unplanned damage, such as property damage by fire, break-ins, flooding or other natural disasters. With both policies purchased, you can have extra peace of mind when thinking about future potential problems.
We should also note that home warranties are not the same thing as manufacturers’ warranties. Manufacturers’ warranties simply cover one appliance or system should it prove to be defective. Over the course of an appliance’s or system’s natural life span, parts will wear out and break down. This is where a home warranty comes in and typically covers the service call and parts needed to fix the problem.
Factors that can affect home warranty pricing
Multiple factors can influence the pricing of home warranties. Understanding what is and isn’t covered and how much it all costs is essential for homeowners to ensure they get the deal that best suits their needs. The following represent a few of the major factors affecting home warranty pricing.
Different warranty plans available
One of the biggest things that influence home warranty pricing is the type of plan you choose. For example, Cinch Home Services has three home warranty plans to choose from. We have designed each option to fit different budgets and offer varying services to many types of homeowners and situations. The plan options include our Appliances Plan, Built-in Systems Plan and Complete Home Plan.
Cinch’s Appliances Plan is typically the lower-cost option, and the major appliances covered include:
- Clothes Dryers
- Clothes Washers
- Cooktops
- Dishwashers
- Food Centers (Built-in)
- Freestanding Ice Makers
- Microwaves (Built-in)
- Ranges
- Range Exhaust Hoods
- Refrigerators
- Trash Compactors (Built-in)
- Wall Ovens
The next tier is our Built-in Systems Plan, and the components covered include:
- Air Conditioning Including Ductwork
- Attic Fans
- Ceiling Fans
- Central Vacuums
- Doorbells
- Electrical System
- Garage Door Openers
- Garbage Disposals
- Heating System Including Ductwork
- Instant Hot/Cold Water Dispenser
- Plumbing System
- Smoke Detectors
- Sump Pump
- Toilets
- Water Heater
- Whirlpool/Jetted Tub (Built-in)
Our comprehensive or Complete Home Plan covers both major appliances and home systems and, due to its robust coverage, is usually the best value option. In addition, this plan includes a Homeowners Insurance Deductible Reimbursement, which reimburses you up to $500 when you have to pay a deductible on a covered homeowners insurance claim.
Add-ons and optional coverage
Most home warranty companies also offer additional coverage options and add-ons. These are items that you can gain coverage for by paying an additional fee.
Available add-ons and optional coverage vary by provider. Commonly found add-ons and optional coverage include:
Most home warranty companies also offer additional coverage options and add-ons. These are items that you can gain coverage for by paying an additional fee. Available add-ons and optional coverage vary by provider. Commonly found add-ons and optional coverage include:
- Swimming pools and/or spas
- Septic pumps
- Well pumps
Be sure to read the fine print of your service contract to ensure you fully understand what is and is not covered.
Monthly payments and deductibles
How you decide to pay for your home warranty contract can also influence the amount you pay on a monthly or annual basis. Some companies, like Cinch, offer flexible deductible options. If you choose to pay more per month for your plan, for instance, you might have a lower deductible, which is what you would pay at the time of service.
We also offer the option to make an annual payment or a monthly payment. You will simply want to choose which option makes the most sense for your household.
Additional work and costs required for repair
What you pay beyond your deductible also depends on what breaks as there are some non-covered charges for certain repairs or replacements. For instance, permits, haul-away services and code upgrades can all be additional costs that you’ll need to pay for the service technician to complete the work. Cinch offers a Premier Upgrade Option that helps cover these types of costs up to $1,000 per claim for two claims per year.
Where you live
Another consideration to recognize in your search for the right home warranty plan is your geographic location. Coverage and prices can vary by state, so be sure to see whether or not you can get coverage.
Renewal
Remember that home warranty plans typically offer coverage for a year. Although most plans come with auto-renewal, you can decide whether you want to upgrade your home warranty plan or choose to purchase add-ons or optional coverage at the time of renewal. This is particularly important if you have made any additions over the last year, like adding a pool.
How to choose the best home warranty for you
Your personal situation will ultimately determine the best home warranty coverage option for you. Factors to consider include the size of your home, how many people live in your home, whether you have the time and ability to fix things yourself, the peace of mind you might enjoy with different options and more.
However, what a home warranty covers is not the only thing you will want to consider when it comes to cost. You should also look for additional benefits provided by your home warranty company, like:
- A workmanship guarantee
- Coverage for unknown pre-existing conditions
- Discounts on the purchase of a new appliance if you need to replace one
- Rust and corrosion coverage
Get an instant home warranty quote
The biggest thing to remember is that the cost of home warranty coverage largely depends on the coverage plan you choose. The specific value of a home warranty will vary from homeowner to homeowner. If you find DIY home repair difficult, for instance, a home warranty can prove valuable by your very first service call if a major appliance or home system needs to be fixed or replaced.
Cinch is here to make the home warranty process as simple as possible. Find out exactly how affordable a home warranty can be by getting an instant quote today.