Homeowners insurance covers your house structure and belongings against damage from weather, fire, liability claims, and theft. Home warranties also guard your investment, but they work differently. It is a service contract that covers the repairing or replacement cost of some appliances and systems. In exchange for an annual or monthly fee, you bear a fixed service call fee whenever there is any contingent issue with your HVAC system, refrigerator, washing machine, or the like.

What do home warranties cost?
Home warranties can cost several hundreds of dollars a year, paid in installments or up-front if the warranty company provides a payment plan. The cost for the home warranty plans depends on the property type – duplex, townhouse, condo, detached, single-family – and whether you shop for their extended or basic home warranty plans.

Typically, the fee does not change with the property’s square footage (unless it is over 5000 sq feet) or age (unless the house is brand new, which only increases the coverage cost). Sadly, the basic policy does not cover separate structures like guest houses. However, you can cover them at an added fee. But garages are included as a standard warranty feature.

Beyond the annual premium, home warranties cost includes a service or trade call fee, costing between $60 and $100 whenever you have the service provider come over to the house and study the problem. However, if the issue requires more than one contractor, you may have to pay the service fee for each.

Further, merely having a home warranty does not mean you will never have to spend a dollar on your home repairs. Home warranty plans do not cover many problems. A noted home warranty limitation is that it does not cover the components that are poorly maintained. In addition, if the company denies the claim, you will have to bear the service fee and the repair cost.

Home warranty advantages

Peace of mind if buying a house with older or used appliances
There is the added convenience because you do not have to hunt for dozens of repair technicians.
No tools or DIY skills needed
Economical as it costs less than $100 monthly

Home warranties limitations

Set coverage limits per year or repair
You might never use it
You have less control as companies providing home warranties decide whether to replace or fix the system.
You may be denied claims if you do not maintain an appliance well
Every time an incident happens, you bear a service call fee costing between $50 and $75.

Best companies to check out for plans for home warranties

Liberty Home Guard
It is one of the best customer-rated home warranties companies because of its high rating on review websites and A-rating with Better Business Bureau. It does an excellent job of handling customer inquiries by promptly answering the phone and responding to every question thoroughly.

American Home Shield
They have three coverage plans, a solid industry reputation, and flexible service fees. AHS has a $3000 limit for every covered appliance and system in its SheildGold and ShieldSilver home warranty plans and a $6000 limit in the ShieldPlatinum plan. Their plans offer extensive coverage, even in the basic premium. ShieldSilver plan covers the HVAC system, and their multiple service call fee lets you tailor the monthly premium to suit your budget.

Select Home Warranty
It can be one of the best home warranties companies if you need an affordable plan. All their plans cost less than $50 per month and also cover roof-leak coverage (rare in plans by typical home warranties companies) up to $400 yearly in the standard plan, sans any additional fee.