What Is Home Repair Insurance? (2026)

Home repair insurance, also known as a home warranty, isn’t the same as homeowners insurance. While home insurance typically covers sudden, accidental damage from disasters, a home warranty can help cover the cost of repairs after home systems or appliances break down.

The typical monthly cost for a warranty is between $25 and $100, which could save you thousands in repair costs per year. Here’s what you should know about home repair insurance, how it works, pricing, and how to buy a policy.

What is home repair insurance (home warranty)?

A home warranty is not an insurance policy — it’s a service contract that covers repairs to or the replacement of major home systems and appliances after breakdowns from normal wear and tear.^[1]

You might consider a home warranty to help fill coverage gaps left by your homeowners insurance policy, which usually doesn’t cover everyday breakdowns.^[2] For example, a home warranty could help offset the cost of repairing a failed water heater or replacing a malfunctioning refrigerator — keeping your out-of-pocket costs predictable.

You can buy home repair insurance at any time, but some real estate agents or sellers may include it when you close on a home.

How a home warranty works

A home warranty works a little differently than traditional insurance, but the process is usually straightforward:

1. Choose a plan. Start by comparing home warranty plans from different companies. You can select coverage for specific systems, appliances, or both, along with your preferred service fee amount.

2. Pay your premium. Once enrolled, you’ll pay a monthly or annual premium to keep your coverage active.

3. Submit a service request. If a covered item breaks down, contact your home warranty company online or by phone to request service.

4. Pay the service fee. You’ll pay the service fee (sometimes called a deductible), typically when you submit the service request.

5. Get repairs or replacements. The company will send a technician to diagnose the problem, then pay for approved repairs or replacement up to your plan’s limits.

What home repair insurance covers

Home repair insurance typically covers major appliances and systems breakdowns from normal wear and tear.

Depending on the home warranty company, you can often choose between different plan types, such as a systems-only plan, an appliances-only plan, or a comprehensive plan that combines both. Coverage can vary significantly depending on the company and plan level, so it’s important to compare quotes and review what’s actually covered.

Category	Examples of Covered Items
Home systems	HVAC, heating system, cooling system, air conditioning, plumbing system, electrical system, water heater, exhaust fans, garage door opener
Kitchen appliances	Refrigerator, cooktop, oven, dishwasher, garbage disposal, built-in microwave
Laundry appliances	Washer, dryer
Add-ons	Pool/spa equipment, well pump, septic system, roof leak coverage

What home warranties won’t cover

While a home warranty can protect your home, contracts often have important exclusions and coverage limits. Read the fine print carefully before purchasing a plan so you understand exactly what the warranty covers. These are some common exclusions:

• Pre-existing conditions: Most companies don’t cover issues that existed before coverage began.

• Damage from natural disasters: Events like floods, earthquakes, or storms typically fall under homeowners insurance — not a home warranty.

• Cosmetic damage: Plans generally cover mechanical failures, not scratches or dents.

• Poorly maintained items: You must service your home appliances and systems regularly; warranties may not cover neglected items.

How to buy home repair insurance

Buying home repair insurance isn’t complicated, but you should compare options carefully to find the best home warranty for your needs. Here are the steps you can take to purchase a plan:

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  1. Research companies

  Compare home warranty companies like American Home Shield and Select Home Warranty to see what plan options they offer.

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  2. Request a home warranty quote

  Most companies provide a free quote online or through a phone number listed on their website.

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  3. Compare plan details

  Review covered systems, appliances, add-ons, and coverage limits.

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  4. Check service fees

  Make sure you understand how much you’ll pay per service request.

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  5. Enroll in a plan

  Choose a monthly or annual payment and start coverage. Many plans include a 30-day waiting period before you can submit a service request.

How much does home repair insurance cost?

A home warranty costs between $25 and $100 per month, or roughly $300 to $1,200 per year, depending on the company and coverage level. In addition to your premium, you’ll also pay a service fee each time you request service. Service fees usually range from $50 to $125.

A home warranty has two main costs: your monthly premium, which keeps coverage active, and the service fee, which you pay when a technician diagnoses or repairs a covered issue. Many companies let you pay monthly or yearly, but paying in full may help you save money.

Factors that affect home repair insurance costs

Several factors can affect the cost of your home warranty plan. Companies often set prices based on:

• Coverage level: Appliance and system-only plans are typically cheaper, but you may get more value by bundling both coverages.

• Home size: Larger homes may have more systems and appliances, so their plans often cost more.

• Service fee amount: Choosing a higher service fee could lower your monthly payments.

• Add-ons: Customizing your warranty with more coverage can increase the price.

Home repair insurance vs. homeowners insurance

A home warranty and homeowners insurance policy protect your home in different ways. Home insurance covers sudden, accidental damage from events like fire or storms, while home repair insurance helps pay for breakdowns caused by normal wear and tear.

Many homeowners use both for more complete financial protection. The table below outlines the differences between a home warranty and home insurance:

Comparison Factor	Home Repair Insurance	Homeowners Insurance
What it covers	Repairs or replacements for home systems and major appliances after mechanical failure	Structural damage, personal property, and liability from covered perils
What it excludes	Pre-existing issues, cosmetic damage, and natural disasters	Wear and tear, maintenance issues, and mechanical breakdowns
What it costs	$25–$100 per month, plus a service fee	Varies; $215 U.S. monthly average for $300K in dwelling coverage
How you pay	Monthly or annual premium	Monthly or annual premium
Claims process	Submit a service request through the warranty company	File an insurance claim after a covered loss
Deductibles	No	Yes
Service charge	Yes	No
Policy limits	Coverage caps per item or per year	Limits on dwelling, personal property, and liability
Required?	No	Mortgage lenders often require home insurance

Most homeowners already carry a home insurance policy, but a home warranty is an extra layer of protection to consider. Although it won’t cover neglect or pre-existing conditions you already knew about, it can protect your home systems and appliances from mechanical failures.

Is home repair insurance worth it?

Whether home repair insurance is worth it depends on your individual circumstances, including your home and risk tolerance. Here are a few scenarios where a home warranty could make sense:

• You have an older home with systems nearing the end of their typical lifespan.

• You don’t have a large emergency fund for potential repairs or replacements.

• You want to pay a predictable monthly or yearly premium.

A home warranty may not make sense for everyone, though. You may not need home repair insurance if:

• You have a newer home with systems and appliances still under the manufacturer’s warranty.

• You’ve recently replaced major appliances or systems.

• You have a large emergency fund for unexpected expenses.

When deciding whether a home warranty is worth it, calculate the annual premium, as well as any service fees. Compare that to how much you could pay out of pocket for repairs each year.

Home repair insurance FAQs