Search thousands of topics on CostHelper.com

BROWSE ALL TOPICS >> appliances babies & children  cars  consumer electronics health & personal care home & garden personal finance  pets  schools small business weddings
CostHelper > Personal Finance  > Real Estate > Home Warranty

Home Warranty Cost


How Much Does a Home Warranty Cost?

 
 average costMedium: Policies Generally Run $250-$600 
post E-mail post Post  

Also called a home service contract or a home service warranty, a home warranty is not an insurance policy, but rather a contract to service, repair or replace specifically listed household systems (such as plumbing or heating) and appliances -- the kinds of mechanical breakdowns not covered by homeowner's insurance. In some areas it may be customary for the seller and buyer to split the cost of a home warranty, but most often a warranty is paid for by the seller or real estate agent, to make the property more attractive to potential buyers and to avoid calls about problems after the home is sold.

Typical costs:

  • A one-year home service warranty can run anywhere from $250-$600, depending on what's covered and the deductible charged for each service call (which can vary from $30-$100). Less-expensive home warranties strictly limit the systems and appliances covered; and it costs more for a warranty covering items such as air conditioning, a pool, a spa, the roof or a well pump.
Related articles: Homeowner's Insurance, Selling a Home, Unclogging a Toilet, Replacing a Toilet, Replacing a Water Heater

What should be included:
  • It's important to remember that a home service warranty does not cover damage to your home; it only provides repair service to specifically covered systems and appliances, and nothing else. If any home system (such as a water pipe) or covered appliance breaks or stops working while your home warranty is in effect, you call the home warranty company, which sends out a repair provider it has under contract. You pay the deductible (and any other fees specifically excluded under your warranty), and the warranty company pays all other repair costs. However, a warranty may cover the cost of repairing a leaky pipe, but not any water damage caused by the leak. The National Home Service Contract Association answers frequently asked questions about home warranties and cautions against unlicensed or unscrupulous companies.
  • After you call the warranty company, it can take an average of 3-5 days before a repair person shows up at your home. Plus, repair claims under a home warranty might be entirely denied because of improper maintenance, code violations, unusual wear and tear, or improper installation. Because home warranties are contracts and not insurance, they are not regulated closely in most states. Homeowners' reviews are mixed. A Maryland house seller[1] is glad he bought a home warranty while his house was on the market; when the furnace died he only had to pay $50 (instead of $3,000) to have it replaced. and a Georgia homeowner had his claim completely denied. If you got the warranty when buying your home and a claim is denied, some experts recommend asking your real estate agent to assist in resolving the dispute.
  • An Ohio real estate agent who describes himself as a "buyer's advocate" discusses the pros and cons[2] of home warranties, and says that although he has recommended them to sellers in the past, he is seriously rethinking the value of home warranties.
Additional costs:
  • Many home warranties start when the house is sold. There could be an extra charge of $50-$100 or more for a warranty covering both the seller (while the home is on the market) and the eventual buyer.
  • Read the fine print: many home warranties do not include the cost of removing and hauling away old equipment (such as a furnace), or the cost of building permits if needed. Spas and pools are typically not included unless specifically requested.
Shopping for a home warranty:
  • The National Home Service Contract Association, which represents several large companies, provides a list of its member companies. Your real estate agent may recommend a particular home warranty company, but be aware that some agents receive a small commission (usually $50-$75) for every home warranty sold.
  • Ask to see a sample copy of an agreement before buying a home warranty and read the fine print to be sure you understand exactly what is and isn't covered. Check whether the company has any complaints on file with the Better Business Bureau[3] , which also provides a list of cautionary steps[4] to take before buying a home service warranty.
post E-mail post Post  
CostHelper News


3 Ways to Have the Government Pay You Back for Your Energy Efficient Upgrades
Any renovations or upgrades made to your home this year that included energy-efficient appliances could be eligible for some federal energy tax credits. But it's not just appliances. || Posted December 9 2013


7 Lesser-Known Discounts for the 50+ Crowd
As they age, members of the Baby Boomer generation don't like to admit that they're senior citizens, but they love getting discounts. It's kind of a quandary, because some of the best deals available are reduced prices for older folks. || Posted October 21 2013

‣ All CostHelper Blog Posts


What People Are Paying - Recent Comments


 

Comment On Your Experience With a Home Warranty
 
Subject:  *
Amount Spent:  * per year
Provider:   
Comments: 
Purchased:  Year: 
City:  * State:  *
 
Information about you:
Email:  * Email addresses are not displayed.
Name:  This is the name we'll display with your post.
me on this computer
*=required field.
 



External Resources:
  1.  www.baltimoresun.com/business/real-estate/bal-re.warranty25jan25,0,3333532.story
  2.  mybuyerbrokerblog.com/2007/09/13/home-warranty-pros-cons/
  3.  www.bbb.org/us/consumers/check-out-a-business-or-charity/
  4.  www.bbb.org/Alerts/article.asp?ID=232
More Personal Finance Topics
Check Out All Costs for Personal Finance How Much Do Tax Returns Cost? How Much Does Closing a Home Cost? How Much Does a Traffic Ticket Attorney Cost?

Search Thousands of Topics on CostHelper.com



Today's Featured Cost Articles

About CostHelper
CostHelper is based in Silicon Valley and provides consumers with unbiased price information about thousands of goods and services. Our writers are experienced journalists who adhere to our strict editorial ethics policy.

CostHelper Community
Brazillian Knot
Paid: 275.00
I tried brazillian knot for the first time and it hurt soooo bad!!!! Never Again!!! I had to cut them out right away. I kept them in for 2 days and then that was it, I could not take it... [more]
-annejevas2
Hair Extensions Cost
Sleep Study
Paid: 6400.00
Wow what a rip off will never go to that hospital again. I will go shopping for my next procedure... [more]
-
Sleep Apnea Treatment Cost
Cost of a deck
Paid: 5000.00
I was wondering if I paid to much for my 10X25 rectangle deck with treated wood? It has 3 stairs about 3 feet in width and 25 feet of railings... [more]
-LB
Deck Cost
Rabbit costs
Paid: 10.00
The dwarf cross, Sunday(male, neutered) was a CL freebie. Womans cat brought 2 approx 3-4 wk old babies, dont know where mother was. He was soooo tiny, dehydrated, & a bit cold... [more]
-shawnna Stone
Rabbit Cost
MRI FH Outpatient/CT FH Outpatient
Paid: 319.80
MRI Amount billed by hospital $9025.82!!!!!January 2014CT FH- outpatient - billed $5146... [more]
-Janie D
MRI Cost
Is my pricing high?
Paid: 1400.00
Just saw the dentist today. Informed I am in need of two extractions and two bone graphs. My insurance does not cover bone grafts... [more]
-
Dental Bone Graft Cost