A home warranty is a recurring annual plan covering multiple home systems and appliances, with its own per-visit service call fee on top of the annual premium.
How it works
The annual plan fee, plus the service call fee times expected claims, gives the total cost with a warranty. Comparing that against the average repair cost times expected claims (without a warranty) shows the net savings or cost of carrying the plan.
What this does not include
Home warranty contracts commonly exclude pre-existing conditions and have coverage caps per item — this calculator computes the cost comparison assuming claims are fully covered, not accounting for denied or partially covered claims that reduce a warranty’s real-world value.
How to use this calculator
- Enter the annual plan fee, service call fee, expected claims, and average repair cost without a warranty.
Frequently asked questions
Is a home warranty the same as homeowners insurance?
No — homeowners insurance covers sudden, accidental damage (like fire or storm damage); a home warranty covers mechanical breakdown of systems and appliances from normal wear and use.
Why might a home warranty deny a claim?
Common reasons include pre-existing conditions, lack of maintenance, or coverage caps being exceeded — reading the specific contract’s exclusions matters more than the advertised coverage list.
Is a home warranty worth it for a newer home?
Often less valuable for a newer home still under manufacturer warranties on major systems — the calculation favors a warranty more for an older home with aging systems and appliances.
