Many people are unaware of what a home warranty plan is. But if you’re like me and have done your home warranty plan research, you can school anyone on the differences between home insurance and home warranty plan or home repair plans. (And if you’re still doing your research, check out these 4 reasons that may really sell you on the benefits of investing in a home warranty.)
But with all Google searches and research aside, one question still remains: How much will a home warranty plan (and the accompanying peace of mind) cost you?
Here’s what you need to know:
The average costs
Home warranty plans can typically cost between $200 and $600. Those that just cover appliances may even be under $100. Most home warranty companies will give you the option to either pay the entire sum for the year at one time or spread the payment out through monthly installments.
The associated factors
There are several factors that contribute to the final cost of a home warranty plan. These include:
The provider: As with any purchase, prices will vary depending on the company you choose.
The purchase time: Realtor.com notes that homeowners can often get a better deal on their home warranty plan if they buy the coverage at the same time as their home. Along with optimal prices, home warranty plans offered during the real estate transaction are generally more comprehensive, covering multiple home systems and appliances.
The coverage: No matter which provider you choose, the final cost will depend on what's covered in the plan. For instance, plans that cover just one home system generally cost less than those that cover multiple systems and appliances. While you can select multiple plans individually, many companies offer combo plans and bundles for savings on more complete coverage.
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The add-ons: Some plans come with optional add-ons, which may increase the final cost of the home warranty plan.
The fees: Consumer Reports notes that homeowners may be responsible for expenses in addition to the cost of the plan. For instance, while much of the repair and replacement costs will be covered, the homeowner may have to pay service-call fees, generally ranging from $60 to $125 depending on the project. Other out-of-pocket expenses could include disposal fees or sales tax on new equipment. Be sure to inquire about potential fees before committing to a home warranty plan.
The potential discounts: Some companies may run limited promotions or offer discount policy prices in certain cases. The Balance notes that these discounted policies are generally paid a year in advance and when they expire, the homeowner can renew the plan at the normal price.
Being prepared for home repairs is always a good strategy. See how plans from HomeServe can help with the costs of covered repairs.