Stepping into a bone-chilling shower might mean your water heater is on its last leg. Instead of sweating the cost of a new water heater, you file a claim, pay the agreed-upon service call fee and await the repair technician. A few replacement parts later, the running water rises to comfortably hot temperatures and you can enjoy your morning routine again — all thanks to your home warranty coverage.
Addressing common appliance repairs with the best home warranty companies can reduce out-of-pocket expenses and bring you peace of mind.
The USA TODAY Homefront team analyzed survey data, price reports and industry reports to help you understand what home warranties typically cover, what they usually cost and the expected life spans of common appliances covered under a home warranty.
What do home warranties cover?
Home warranties typically offer coverage for appliances and built-in systems within the home. You can also opt to include add-ons for additional coverage.
The interactive graphic below illustrates what’s typically included in a comprehensive home warranty policy and what is often considered an add-on. You should check that any plan you’re considering has the specific coverage you need, since coverage does vary by provider and plan.
As you review home warranty plan options and coverage, make sure you understand the claims process. Some companies provide an online claims portal, some require a direct email and others require a phone call in order to file. A reputable home warranty company should have a sample contract. Take the time to review it.
What does a home warranty not cover?
Many home warranty providers refuse coverage for appliances and built-in home systems that were in disrepair before the policy’s effective date. Home warranty policies often come with a waiting period, typically 30 days, before you can submit a claim.
Consult your provider’s sample contract for more specifics on what’s not covered by an individual home warranty policy. For anything that isn’t clear, reach out to ask your potential home warranty provider directly.
What is the difference between home warranties and homeowners insurance?
Home warranties and homeowners insurance cover distinct elements of a home. Home warranties cover normal wear and tear of appliances and systems, while home insurance covers damage from incidents such as theft, fire and storms. Lenders can require you to hold homeowners insurance to protect their assets.
Home warranty policies can be purchased to provide coverage for appliances and built-in systems within your house.
How much does a home warranty cost?
The cost of a home warranty includes the monthly or annual premium — with optional add-ons — plus a prearranged amount you’ll pay for every claim, known as a service call fee.
The average monthly home warranty premium is $94, while annual premiums average $1,033, according to our November 2023 survey of 1,000 homeowners. Our survey showed that the majority (53%) of policyholders elected to pay annually. The following factors can affect your home warranty premium:
- Coverage level
- Geographic location
- Home square footage
- Service call fee
Service call fees can dictate the cost of your premium. Average service call fees for our top providers range from $75 to $125. Electing a higher service call fee usually means paying a lower premium.
Appliance coverage limits typically range from $500 to $7,000, while some providers offer unlimited systems coverage, based on the nine home warranties we reviewed.
A home warranty plan can essentially pay for itself — buying a new refrigerator can cost around $500–$800 for a basic model and exceed $5,000 for a high-end version.
How long do appliances last?
The average home appliance life span varies. However, if you have older appliances, looking into a home warranty is a good idea. The International Association of Certified Home Inspectors (InterNACHI) provides estimates of most household appliances’ longevity, as seen in the graphic below.
Typical Appliance Duration
After nine years, your dishwasher may give up on scrubbing your dinnerware.
Microwaves tend to last up to nine years. Note that most home warranties only cover built-in microwave ovens.
A traditional water heater with a tank can last up to 12 years on average.
The average clothes dryer’s life span is 13 years, which might equate to 3,900 drying cycles.
Most refrigerators max out at 13 years.
Window air conditioner units tend to last up to seven years, while central AC can last up to 15 years. However, central AC systems in coastal regions such as Florida tend to only last up to 12 years due to climate factors.
With 300 loads of laundry done in American households every year, the average washing machine lasts up to 15 years.
Gas ranges last up to 17 years, edging out electric ranges by two years.
What should you know about the home warranty industry?
Home warranty coverage can provide financial relief when it’s time to repair or replace your home appliances and systems — especially as the cost of living has skyrocketed over the last few years.
In 2022, the Consumer Price Index (CPI) for All Urban Consumers reached its highest rate since 1981, with annual expenditures rising by an average of 9.1% from 2021 to 2022, according to the U.S. Bureau of Labor Statistics. During that same period, housing costs rose 7.4%.
You could choose from 66 home warranty providers in 2023. That year, the home warranty providers industry represented a $3.9 billion market size based on revenue, according to data from IBISWorld. In fact, the home warranty industry market share has grown an average of 3.4% annually since 2018, also according to IBISWorld.
What’s next?
To find the best rates, weigh the cost of coverage against the potential savings a home warranty could provide. You’ll also want to consider how comfortable you are paying out of pocket to repair or replace home appliances, and systems such as HVAC and plumbing.
Editorial note: The name “Homefront” refers to the alliance between USA TODAY and Home Solutions that publishes review, comparison, and informational articles designed to help USA TODAY readers make smarter purchasing and investment decisions about their home. Under the alliance, Homefront provides and publishes research and articles about home service and home improvement topics.
Homefront has an affiliate disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Homefront editorial staff alone (see About Homefront). Homefront adheres to strict editorial integrity standards. The information is believed to be accurate as of the publish date, but always check the provider’s website for the most current information.
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On average, home warranties cost $94 per month and $1,033 per year. We obtained these averages via our November 2023 survey of 1,000 homeowners. We also pulled quotes from many of the home warranty companies we’ve reviewed to calculate national averages, although this yielded lower numbers — $59 per month and $703 per year. Note…
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