If you’ve been researching home warranties lately, you have probably noticed that prices are all over the place. A lot of companies won’t even give you a price on their website. Why? Because they want you to fill in a form and have one of their call center representatives make the sale over the phone. Expect some pushy sales people from a lot of companies. Some of them might even misrepresent the coverages the offer. But not all companies are like this.
From my experience, “you get what you pay for” definitely applies to a home warranty. The low cost providers are often the ones who will refuse to cover your breakdowns or make your life difficult. Remember to do your research, read reviews, and make an informed decision about the home warranty company and plan that you choose.
So back to price… you can expect a warranty to cost anywhere between $250 to $1000 a year depending on several factors:
- Your location. Some regions of the country have a higher cost of living, which often means that appliance repair companies and other service people are also more expensive. More expensive repairs = more expensive home warranties
- The plan that you choose. If you are only covering your appliances, the odds of you having a breakdown that costs more than $1000 to repair are pretty slim. Replacing your entire fridge may only cost the warranty provider $500-$1000 because they get special discounts for buying in such large volumes. But if you’re covering your air conditioning, an average repair bill can be hundreds of dollars and replacing some or all of your system will easily shoot into the thousands. Your plan will be priced accordingly
- The trade service fee that you pay. This is like a deductible. If you have a low deductible, your plan price will be higher. Higher deductibles usually carry a lower plan price. Pick your service fee based on what you can afford to pay in an emergency like your water heater breaking down
Remember that most warranty companies offer a monthly pay option, so you don’t have to buy the yearly plan all at once. This can really help ease the hit to your wallet.