VaultRubric
Home warranties: what they cover, what they cost, and whether one is worth it
Facts as of 2026-10-15. Not insurance advice.
Short answer: A home warranty is a service contract (not insurance) that pays to repair or replace covered appliances and systems that wear out. Plans typically cost $400–$1,000 a year plus a $75–$125 fee per repair visit. It's usually worth it only if your appliances are old, you'd struggle to pay a surprise repair, and the plan's limits are high enough for your biggest risk (often heating and air). Otherwise, putting the same money in a repair fund usually costs less. Use the picker below to run your own numbers.
Your roadmap
- Check what you already have: homeowners insurance, builder warranty, manufacturer warranties, credit card extended warranties.
- List your older systems and appliances (age, and what a replacement would cost).
- Run the picker below with real quotes.
- Read the full sample contract, especially limits, exclusions and the service fee. If it isn't listed, assume it isn't covered (FTC).
- Check complaints and reviews (BBB, your state attorney general, search "company name complaint").
- Compare at least 2 quotes on caps, fee and price, not on ads.
- Keep maintenance records: missing maintenance is a common reason for denials.
Home warranty vs. homeowners insurance
| Home warranty | Homeowners insurance | |
|---|---|---|
| What it is | Service contract you choose to buy | Insurance policy, usually required by your mortgage lender |
| Covers | Repair/replacement of listed appliances and systems that fail from normal wear and tear | Sudden damage to your home and belongings from fire, storms, theft and other covered events |
| Doesn't cover | Damage from storms, fire, accidents; structural items; items not listed | Wear and tear and appliances that simply break down from age |
| You pay | Yearly or monthly price + service fee per visit | Premium + deductible per claim |
Sources: Tennessee Dept. of Commerce & Insurance: avoid home warranty scams (Apr. 23, 2019); FTC: So what's the deal with home warranties? (Feb. 24, 2023).
Typical costs (labeled by source)
- $400–$1,000 a year, about $750 on average, and a $95–$125 service fee per request: First American's own FAQ (First American).
- "$500 per year or more" for a basic plan, and service fees "typically $75 or more": D.C. Attorney General.
- Published service fees: American Home Shield $100 or $125; Choice Home Warranty $85 (AHS, Choice).
- What repairs can cost without a plan, as published by First American: air conditioner $8,300–$12,500; heating system $3,500–$7,500; water heater $600–$5,600 (First American).
Prices depend on your home's size, type and location, so most companies quote by address.
Is a home warranty worth it for me?
Fill in your numbers. We start with typical figures from First American's published FAQ ($750 a year, $100 service fee).
Common exclusions and claim denials
- Coverage caps: e.g., "you may only get $1,600 to replace a $12,000 boiler" (D.C. AG). Check per-item and total limits.
- Pre-existing conditions and a waiting period before coverage starts (Choice: 30 days after enrollment, per its FAQ).
- Lack of maintenance or improper installation; code upgrades, permits and modifications (often excluded or limited).
- Items not listed, plus add-on items (pool, well, septic, roof leaks) that cost extra.
- Cash instead of repair: some contracts can pay the company's cost, which may be less than retail (Choice discloses this).
- You usually can't pick the contractor, and many contracts require arbitration instead of court (D.C. AG).
Sources: D.C. Attorney General: Consumer alert, home warranties; FTC: Extended warranties and service contracts; Choice Home Warranty: sample agreement.
Who regulates home warranties?
- Federal (FTC): the FTC calls home warranties "really service contracts" and suggests checking total cost, limits, the claims process and the company's reputation. Report problems at ReportFraud.ftc.gov (FTC).
- Tennessee: state law says service contracts, defined to cover repair or replacement of property for wear and tear, are not the business of insurance and are exempt from regulation as insurance (Tenn. Code Ann. § 56-2-126). We found no Tennessee license or registration for home warranty companies; the vehicle-warranty registration law (§ 56-55) covers vehicle products. Tennessee's Department of Commerce & Insurance still gives consumer tips and takes complaints through its Consumer Affairs Division (§ 56-2-126, TDCI).
- California licenses "home protection companies" through its Department of Insurance (CDI). Texas regulates residential service companies through TDLR, which took over from the Texas Real Estate Commission in 2021 (TDLR). Rules differ by state; check your state's insurance or licensing department.
Major companies compared (published facts)
Listed alphabetically. Facts come from each company's own pages on 2026-10-15; "not found" means the page we checked didn't say. Prices are quoted by address, so compare real quotes.
| Company | Per-item limit | Total limit | Service fee | Price | Source |
|---|---|---|---|---|---|
| American Home Shield (ShieldGold / ShieldPlatinum) | $5,000 per HVAC system; $2,000 (Gold) or $4,000 (Platinum) per appliance | $50,000 per term | $100 or $125 (you choose) | By address quote | ShieldGold, ShieldPlatinum, plans guide |
| Choice Home Warranty (Basic / Total) Visit Choice Home WarrantyPartner link | $3,000 per covered item per 12 months (lower for some items) | not found | $85 per claim (may be lower with discounts) | By ZIP quote | sample agreement, FAQ |
| Cinch Home Services | $1,000 per repair (repair plan); $2,000 per appliance (repair + replace) | $10,000 per term | not found | Sample price by state | plans page |
| First American Home Warranty | not found on the page we checked | not found | Typically $95–$125 (its FAQ) | Says average about $750/yr; most $400–$1,000 | FAQ |
| Select Home Warranty | not found on the page we checked | not found | not found | Add-ons listed, e.g. well pump $3.33/mo | plans page |
What the published facts show: among the plans whose limits are published, American Home Shield lists the highest per-system HVAC limit ($5,000) and a $50,000 term limit; Choice lists the lowest service fee ($85) with a $3,000 per-item limit; Cinch's repair plan limit is $1,000 per repair. If heating and air are your biggest risk, the limit matters more than the fee. We don't name a single "best" company: the right choice depends on your quotes, your state and your biggest risk. Choice Home Warranty is a VaultRubric partner; that never changes this comparison or the picker. See our disclosure.
Sources
- FTC: So what's the deal with home warranties? (Feb. 24, 2023) (checked 2026-10-15)
- FTC: Extended warranties and service contracts (checked 2026-10-15)
- D.C. Attorney General: Consumer alert, home warranties (checked 2026-10-15)
- Tennessee Dept. of Commerce & Insurance: avoid home warranty scams (Apr. 23, 2019) (checked 2026-10-15)
- Tenn. Code Ann. § 56-2-126 (service contracts not insurance) (checked 2026-10-15)
- California Dept. of Insurance: home protection companies (Ins. Code §§ 12740–12764) (checked 2026-10-15)
- Texas TDLR: residential service companies (home warranties) (checked 2026-10-15)
- First American Home Warranty: home page FAQ (checked 2026-10-15)
- American Home Shield: ShieldGold (checked 2026-10-15)
- American Home Shield: ShieldPlatinum (checked 2026-10-15)
- American Home Shield: plans guide (PDF) (checked 2026-10-15)
- Choice Home Warranty: sample agreement (checked 2026-10-15)
- Choice Home Warranty: FAQ (service call fee) (checked 2026-10-15)
- Cinch Home Services: plans (checked 2026-10-15)
- Select Home Warranty: plans (checked 2026-10-15)