When you are a homeowner, there are a lot of things to worry about. One of the biggest concerns is keeping your home in good condition so that it does not lose its value. This is why many homeowners choose to purchase a home warranty plan. A home warranty plan covers the cost of repairs for most items in your home, including appliances, plumbing, and electrical systems. In this article, we will discuss how much a home warranty costs and how it compares to homeowners insurance.
What Is A Home Warranty?
Probably the best way of describing a home warranty is by comparing it to a homeowner’s insurance. To put it simply, a home warranty is a service contract that helps cover the cost of repairs or replacements for most items in your home. This type of coverage is different from homeowners insurance, which protects your home from events such as fires, theft, severe weather, and other types of damage.
While both homeowner’s insurance and a home warranty can help save you money on repairs, there are some key differences. For one, a home warranty only covers items that break down due to normal wear and tear; it does not cover damages caused by events such as fires or severe weather. Secondly, with a home warranty plan, you will have to pay a service call fee every time you need to use it. With homeowner’s insurance, you do not have to pay anything out of pocket for repairs.
How Much Does A Home Warranty Cost?
The typical home warranty plan costs between $25 and $65 per month ($300 and $780 per year). Depending on the company and level of coverage, total yearly expenses range from $265 to $1,425. Aside from the cost of the plan, each time you submit a claim that necessitates sending a contracted expert to your house, the warranty company charges a service call fee.
Typically, the more expensive your service call fee is, the less expensive your monthly or annual premium will be. The majority of providers give a repair guarantee that protects you from having to pay a service call charge more than once in a given time period if a repair doesn’t work and a contractor has to return. Look for language in the contract stipulating how long this time frame will last; it’s usually 30 to 90 days.
What Is a Service Call Fee?
A service call fee is a charge you have to pay every time you need to use your home warranty plan. The service call fee is usually between $75 and $125, and it covers the cost of sending a technician to your home to assess the problem.
If you decide to proceed with the repair, the service call fee will be applied to the total cost. In most cases, you will still save money by using your home warranty plan because the repair costs are often discounted. Professional home warranty providers will only apply this service call fee once, regardless of how many times a technician will have to
For example, let’s say that your air conditioning system breaks down in the middle of summer, and it would cost $500 to repair it. If you have a home warranty plan, you would only have to pay a $100 service call fee, and the remaining $400 would be covered by the home warranty. In this instance, you would save the difference by using your home warranty plan.
Now that we have a better understanding of what a home warranty is and how it works, let’s look at the average repair and replacement costs of some of the most common household appliances and systems.
How Much Can You Save on Home Repair?
To calculate how much money you may save by purchasing a home warranty, consider the cost of repairing or replacing your appliances and systems and then compare it to the annual price of a house warranty plan (plus the service fee for each claim).
The average repair cost for a major appliance is between $105 and $241. Below, we’ve compared major systems and appliances on a variety of factors, including average repair/replacement costs and their life expectancy.
Central Air Conditioning System:
- Repair Cost – $170 to $600
- Replacement Cost – $3,900 to $7,500
- Average Lifespan – Up to 15 years
Oven or Range:
- Repair Cost – $100 to $430
- Replacement Cost – $410 to $7,500
- Average Lifespan – Up to 20 years
- Repair Cost – $220 to $955
- Replacement Cost – $820 to $1,595
- Average Lifespan – 8 to 10 years
Freezer or Refrigerator:
- Repair Cost – $200 to $330
- Replacement Cost – $430 to $10,600
- Average Lifespan – 10 to 15 years
- Repair Cost – $150
- Replacement Cost – $200 to $2,000
- Average Lifespan – 10 years
- Repair Cost – $160 to $300
- Replacement Cost – $330 to $1,900
- Average Lifespan – 9 to 10 years
- Repair Cost – $250
- Replacement Cost – $150 to $950
- Average Lifespan – 10 years
- Repair Cost – $100 to $350
- Replacement Cost – $445 to $2,300
- Average Lifespan – 11 to 14 years
- Repair Cost – $180
- Replacement Cost – $445 to $2,100
- Average Lifespan – 8 to 12 years
It is, however, important to point out that these costs and lifespans differ based on the make and model of the appliance or system and how well it is maintained.
While home warranty plans do have their limits, they can be a valuable asset for any homeowner. If you are worried about the costs of repairing or replacing your appliances and systems, a home warranty plan may be the right choice for you.
Home warranty plans are a great way to protect your home and save money on repairs. If you’re interested in purchasing a home warranty plan, be sure to do your research and compare different providers. Make sure you understand the coverage and limits of each plan before making a decision.
Summer is here, and if you need an air conditioner, a ceiling fan, a refrigerator, or another appliance covered by a home warranty, now may be the time to look for one. We provide customizable repair and service plans for all sorts of home appliances at First Premier Home Warranty. To learn more about purchasing a house warranty and reducing your power bills, contact us directly or request a free quote.