What is the Average Home Warranty Cost in the US?

Home warranties explained

As the home warranty industry has grown exponentially, more people are beginning to take notice and wonder if a home warranty plan is right for them and how much is a home warranty. IbisWorld says home warranty providers have grown by 5.6% annually from 2017 to 2022. This is a massive jump that shows people are finding value in home warranty plans.

Before we continue, let’s briefly discuss the difference between a home warranty plan and home insurance. The two are sometimes mistaken as the same thing, and we’re here to help. A home warranty plan helps pay the cost of repairs and replacement of covered home appliances and systems when they stop working due to normal wear and tear. On the other hand, home insurance kicks in if there’s fire, theft, windstorms, or a catastrophic event. While a home warranty plan isn’t mandatory, having homeowners insurance is often necessary to get a mortgage approved. Now that we’ve cleared that up, let’s dive into the price of a home warranty plan to see if it’s something you want to invest in.

So, how much is a home warranty these days?

How does home warranty cost vary by company and state

There’s power in shopping around and trying to find the best deal. The home warranty business is no exception to this rule. When it comes to finding the right home warranty plan for you and your family, it may be wise to review several of the leading companies in the industry before making a decision.

When you do, you’ll find that different companies have their pricing strategies, offer different products and deductible levels, and many have different price points based on the coverage you need. You should also realize that home warranty offers and protections differ by state. So, it's perfectly normal if you live in Ohio and can’t get the same deal your cousin got in Florida.

Here's a great breakdown by Today's Homeowner that provides rough averages per state based on annual premiums for single-family homes:

Here at Cinch¹, we make it easy for you to determine if our plans and pricing options are right for you. 

What drives the total cost of a home warranty plan?

Other than some of the leading companies in the field having different pricing structures, some other factors can impact the total cost of a home warranty plan. These are typically factors such as:

Home size and type

Since home warranty coverage is dictated mainly by what is being covered, the larger your home, the more things you may need to be included in your coverage. Also, the types of systems you have can make your policy more or less expensive.

Coverage selection

Almost every home warranty company will offer prospective customers options. After all, home warranty is far from a one-size-fits-all industry. For example, a plan that only covers appliances such as refrigerators and microwaves will likely cost less than one that covers all of the appliances and systems in a home. You can expect to pay more for a plan that gives you more.

For example, Cinch Home Services has three home warranty¹ 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 first option, and the major appliances covered include (subject to plan terms and conditions):

• 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 (subject to plan terms and conditions):

• 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 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 per year when you have to pay a deductible on a covered homeowners insurance claim.

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.

Plan add-ons

If you have a pool or want specific systems covered, most home warranty providers have plans for this, but they also come at an additional cost. As the customer, you can request whatever you want. Just be prepared to pay extra.

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.

Service fees

When something goes wrong with a covered appliance or system, many plans also charge a service fee for work on your home. A service fee is triggered when a qualified technician must go to your residence to repair an appliance or system. Having this option is important because it prevents you from scrambling to find someone to repair your appliances in a hurry or embarking on a challenging DIY project.

Location

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 in the state you call home.

Additional work and costs required for repair

Did you know that thinks like permits, haul-away services and code upgrades are typically not covered under home warranty coverage? These can add unexpected cost, but thankfully, Cinch offers a Premier Upgrade Option that helps cover these types of costs up to $1,000 per claim for two claims per year.

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.

When you depend on your budget, having to dip into your savings to repair a major system in your home could mean skipping vacation, delaying the purchase of a car, furniture, or whatever you have your eyes on, or just struggling with bills more than you hoped you would be. So, if you’re still wondering if a home warranty is worth it, keep reading.

Let’s look at the average cost of replacement and repair on some other popular home appliances and systems. If one of these items suddenly stopped working in your home, would you be able to come out of pocket to repair or replace it comfortably?

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

Why having a home warranty is worth it

Although the cost of a home warranty plan can seem like an added expense, appliance repair costs can set you and your budget back way more. Sometimes, it’s better to be proactive and get home warranty protection to avoid hefty unexpected expenses when your appliances and repairs stop working.

The opportunity cost of not having a home warranty

When you depend on your budget, having to dip into your savings to repair a major system in your home could mean skipping vacation, delaying the purchase of a car, furniture, or whatever you have your eyes on, or just struggling with bills more than you hoped you would be. So, if you’re still wondering if a home warranty is worth it, keep reading.

Let’s look at the average cost of replacement and repair on some other popular home appliances and systems. If one of these items suddenly stopped working in your home, would you be able to come out of pocket to repair or replace it comfortably?

*National average based on actual project costs reported by unaffiliated third-party home project websites.

How much does a home warranty cost the seller in real estate?

Home warranties can provide a significant value when it comes time to sell your home. Including a seller’s warranty into closing costs can net you considerable profit in the right circumstances. This is a scenario where the seller agrees to purchase a home warranty plan for the buyer once the sale is final. Typically, this costs between $300 - $600, according to thisoldhouse.com.

When home warranty costs are justified for the buyer and can increase property value

Selling an older home with older appliances: This should make perfect sense. If your prospective buyer is debating between a new construction or an established home, providing a home warranty plan as an add-on with an older home can make all the difference by providing the peace of mind they need.

When you own and rent real estate: A home warranty plan cost is particularly justified on rental properties. Things go wrong even with the best tenants, so having a protection plan can save you thousands of dollars in repairs on your investments.

When you live in a harsh climate: From tropical beach towns to mountain homes, harsh climates are also way tougher on your appliances and systems. Investing in the cost of a home warranty plan can help protect your budget from incurring these costs.

¹The product being offered is a service contract and is separate and distinct from any product or service warranty which may be provided by the home builder or manufacturer.

Curious about home warranty costs? Learn what can impact home warranty prices and what to look for in a service contract.