Have you ever faced an unexpected and expensive home repair like a broken water heater or faulty AC unit? As a homeowner, these inevitable issues can deal a financial blow if you’re not prepared. That’s where home warranties come in — these service contracts help cover repairs and replacements for your home’s systems and appliances.

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If you’re buying a home, considering getting a home warranty during the transaction is wise. And if you already own a home, purchasing coverage can save you money down the road. Here’s what to know about how home warranties work, the fine print to read closely, and whether the investment is worthwhile for your new or existing home.

What is a Home Warranty Exactly?

A home warranty is a one-year service contract between a homeowner and home warranty company. You pay an annual fee in exchange for the warranty company agreeing to cover the costs to repair or replace parts of covered home systems and appliances that break down due to normal wear and tear.

Amazon Home Warranty

Home warranties differ from homeowners insurance in that they cover system and appliance breakdowns regardless of cause. Meanwhile, homeowners insurance covers damage resulting specifically from covered events like fires, storms, theft, and more.

Common items protected by home warranty plans include:

  • Heating systems: Furnace, boiler
  • Cooling systems: Air conditioning unit, heat pump
  • Electrical systems: Wiring, panels, switches
  • Plumbing: Pipes, faucets, water heater
  • Kitchen appliances: Oven, refrigerator, dishwasher
  • Washer/dryer

When one of these items stops functioning properly, you pay a service fee — typically around $60 to $125 — and the home warranty company covers the rest of the cost of the repair or replacement as long as coverage limits aren’t exceeded.

Understanding Home Warranty Exclusions

While home warranties cover a wide range of home systems and appliances, they do not cover every possible breakdown situation or replacement. Expect to see exclusions for:

  • Pre-existing conditions: Damages existing before the policy term aren’t covered.
  • Normal maintenance: Homeowners are responsible for maintenance like cleaning and replacing air filters.
  • Improper installation: Faulty DIY installations often aren’t covered.
  • Code violations: Upgrades required to meet building codes may carry additional costs.
  • Cosmetic defects: Items will be repaired enough to be functional but may not look perfect. For example, a scratched refrigerator won’t be repainted.

In addition, coverage often excludes certain home components like pools, elevators, etc. Always check the contract specifics about what your plan includes and excludes before signing.

Home Warranty Benefits for Homebuyers

Purchasing a home is easily one of life’s most expensive investments. Beyond the down payment, closing costs, moving expenses, and decor upgrades, unexpected home system issues and appliance replacements can quickly snowball into a painful financial burden:

  • Replacing an AC unit costs $4,800 on average
  • Swapping out a furnace runs $5,600 typically
  • New water heaters average $1,200 with installation

Owning a home also comes with the new responsibility of maintenance and upkeep to keep systems functioning efficiently.

Bundle all of that with the uncertainty of problems that may be lurking unbeknownst to you in a resale home, and homeownership can be downright scary as a first-timer!

This is why getting a one-year home warranty during the transaction is so valuable:

You’re protected financially — instead of shelling out thousands in savings for a last-minute AC replacement or dealing with moving expenses on top of an expensive furnace replacement, the warranty contractor handles it for small service fees. For a typical single-family home (2,000-3,000 square feet), the average cost to replace a gas furnace ranges from $3,000 to $6,000, including labor.

You get some transition help — many plans provide benefits like reimbursements for stays at hotels, restaurants, and laundromats if an issue makes your home uninhabitable during a covered repair.

You have time to plan your next steps — the homeowners policy gives you a year to save and budget for replacement costs at the end of the policy.

You avoid conflicts over repairs — the home warranty company handles sending technicians and negotiating solutions instead of you going back and forth with sellers over necessary fixes.

While home warranties aren’t fail-safe, they help cushion the initial costs and headaches that come with homeownership.

Certainly! Here’s a section on the average home warranty cost that you can include in your article:


Understanding the Average Home Warranty Cost

When considering a home warranty, it’s important to understand the typical costs involved. On average, home warranty plans can range from $300 to $600 per year. This cost varies based on the extent of coverage and the property’s size. Additionally, when a service call is made, homeowners are typically responsible for a service fee ranging from $75 to $125. This fee is significantly less than the full cost of repairing or replacing a covered item without a warranty. Including a home warranty in your homeownership plan can be a wise financial decision, offering both peace of mind and protection against unexpected repair costs.


You can place this section after the “Benefits for Home Buyers” section in your article. This placement allows readers to understand the advantages of home warranties and then seamlessly transition into learning about their cost, which is a critical factor in the decision-making process.

What First-Time Buyers Should Know About Home Warranty Plans

If you’ve decided a home warranty would be worthwhile protection for purchasing an older home or appliance replacement savings for any house, keep the following home warranty tips for buyers in mind:

Home Warranty Plans
  • Add warranties into negotiations early on — Asking sellers to include a home warranty in purchase discussions sets the expectation. This can give them time to understand costs on their end too.
  • Compare plans carefully — Rates, coverage options, limitations, and reputations of big providers like AHS or smaller competitors can vary dramatically. Make sure you know what you’re getting.
  • Consider home age and risks — Some level of protection is likely smart if buying a 5+ year old home or one with aging water heaters, AC units, etc. New construction may be less risky.
  • Ask your real estate professional for guidance — Experienced real estate agents often have industry knowledge on reputable home warranty companies and policies to recommend.
  • Time purchases properly — Warranties need to be ordered in coordination with closing dates so coverage starts seamlessly.
  • Read fine print on what’s covered and service fees — Don’t assume all providers and policies are equal. The lowest prices could carry disappointing coverage gaps or excess fees.
  • Understand renewals — First year policies often carry discounts. Renewal rates can increase costs substantially after the first term.

Getting familiar with home warranty basics allows you to make the most informed choice on providers and coverage as a new homebuyer.

Comparison of Home Warranty Companies: Pros and Cons

Home Warranty

When selecting a home warranty provider, it’s crucial to weigh the pros and cons of each company. Here’s a detailed comparison of Amazon Home Warranty (AHW) and its top alternatives based on various features.

Here is a comparison table of Amazon Home Warranty (AHW) and its top alternatives:

FeatureAmazon Home Warranty (AHW)American Home ShieldFirst American Home WarrantyLiberty Home GuardSelect Home WarrantyAFC Home Club
PlansEssential Appliances Plan, Combo Plan, Major Systems Plan[2]ShieldPlatinum, ShieldGold, ShieldSilverBasic, Premier, First ClassAppliance Guard, Systems Guard, ComboBronze Care, Gold Care, Platinum CarePlatinum, Gold, Silver
Coverage LimitsUp to $1,500 per item[2]Unlimited coverage for covered repairs and replacementsUp to $3,000 per itemUnlimited coverage for covered repairs and replacementsUp to $500 per itemUp to $1,500 per item
Service Call Fee$75 to $100[2]$75 to $125$75 to $100$65 to $100$60 to $75$75 to $100
Contractor Network10,000+ approved contractors[2]16,000+ contractors40,000+ contractors30,000+ contractors10,000+ contractors10,000+ contractors
BBB RatingA+ [2]A+A+A-A-A+
Trustpilot Rating2.5 out of 5 stars[2]4 out of 5 stars4.5 out of 5 stars4 out of 5 stars4 out of 5 stars4 out of 5 stars
Claims DenialsSome complaints[2]Low claims denial rateLow claims denial rateLow claims denial rateLow claims denial rateLow claims denial rate
Customer SatisfactionMixed[2]HighHighHighHighHigh

Please note that the information in the table is based on the search results and may not be exhaustive. It is essential to compare plans, pricing, and reviews for AHW and its alternatives to help identify the best home warranty match for your needs and budget.

Amazon Home Warranty (AHW)

  • Plans: Offers Essential Appliances Plan, Combo Plan, and Major Systems Plan.
  • Coverage Limits: Up to $1,500 per item.
  • Service Call Fee: $75 to $100.
  • Contractor Network: Over 10,000 approved contractors.
  • BBB Rating: A+.
  • Trustpilot Rating: 2.5 out of 5 stars.
  • Claims Denials: Some complaints noted.
  • Customer Satisfaction: Mixed reviews.

Pros: A variety of plans and a large network of contractors.
Cons: Lower Trustpilot rating and some issues with claims denials.

American Home Shield

  • Plans: ShieldPlatinum, ShieldGold, ShieldSilver.
  • Coverage Limits: Unlimited coverage for covered repairs and replacements.
  • Service Call Fee: $75 to $125.
  • Contractor Network: Over 16,000 contractors.
  • BBB Rating: A+.
  • Trustpilot Rating: 4 out of 5 stars.
  • Claims Denials: Low claims denial rate.
  • Customer Satisfaction: High.

Pros: High customer satisfaction and unlimited coverage limits.
Cons: Higher service call fees compared to some competitors.

First American Home Warranty

  • Plans: Basic, Premier, First Class.
  • Coverage Limits: Up to $3,000 per item.
  • Service Call Fee: $75 to $100.
  • Contractor Network: Over 40,000 contractors.
  • BBB Rating: A+.
  • Trustpilot Rating: 4.5 out of 5 stars.
  • Claims Denials: Low claims denial rate.
  • Customer Satisfaction: High.

Pros: Extensive contractor network and high coverage limits.
Cons: Plan options might be less diverse than competitors.

Liberty Home Guard

  • Plans: Appliance Guard, Systems Guard, Combo.
  • Coverage Limits: Unlimited coverage for covered repairs and replacements.
  • Service Call Fee: $65 to $100.
  • Contractor Network: Over 30,000 contractors.
  • BBB Rating: A-.
  • Trustpilot Rating: 4 out of 5 stars.
  • Claims Denials: Low claims denial rate.
  • Customer Satisfaction: High.

Pros: Competitive service call fees and a solid contractor network.
Cons: Slightly lower BBB rating compared to others.

Select Home Warranty

  • Plans: Bronze Care, Gold Care, Platinum Care.
  • Coverage Limits: Up to $500 per item.
  • Service Call Fee: $60 to $75.
  • Contractor Network: Over 10,000 contractors.
  • BBB Rating: A-.
  • Trustpilot Rating: 4 out of 5 stars.
  • Claims Denials: Low claims denial rate.
  • Customer Satisfaction: High.

Pros: Lower service call fees and good customer satisfaction.
Cons: Lower coverage limits per item.

AFC Home Club

  • Plans: Platinum, Gold, Silver.
  • Coverage Limits: Up to $1,500 per item.
  • Service Call Fee: $75 to $100.
  • Contractor Network: Over 10,000 contractors.
  • BBB Rating: A+.
  • Trustpilot Rating: 4 out of 5 stars.
  • Claims Denials: Low claims denial rate.
  • Customer Satisfaction: High.

Pros: Good range of plans and high customer satisfaction.
Cons: Coverage limits similar to AHW.

Conclusion

Each home warranty company offers unique benefits and potential drawbacks. Amazon Home Warranty provides a range of plans and a substantial contractor network, but its customer satisfaction ratings are mixed compared to competitors. Other companies like American Home Shield and First American Home Warranty stand out for their extensive coverage and high customer satisfaction. When choosing a home warranty provider, it’s essential to consider your specific needs, including coverage options, budget, and desired level of service.

Home Warranty

Smart Homeowners Rely on Home Warranties Too

As a new homeowner, you may be tempted to think home warranties are only useful for buyers inheriting old houses and uncertain repairs. Why pay for coverage when appliances are shiny and new?

The hard truth most new homeowners face is that unexpected, expensive breakdowns don’t care how old your house is. New systems fail constantly too.

Only 37% of first-time homeowners feel very financially prepared for emergencies. Don’t get caught emptying savings to cover a broken water heater or AC unit – home warranties can be a smart budget buffer year after year.

Benefits for Every Homeowner Include:

Financial Protection

  • Average homeowners insurance deductible – $1,000
  • Average home warranty service call fee – $100

Bridge Unexpected Repair Costs

  • Furnace failure repairs without coverage – $220-$1500+
  • With warranty – $60-$125 service fee

Lock In Current AC Unit Prices

  • New AC unit 2023 cost – $4,800
  • AC repair cost increase every year as units age

Reduce Emergency Credit Card Use

  • 49% of homeowners carry credit card debt already
  • Warranties prevent bigger emergency charges

More Time to Save Up

  • Plans allow you 1 year between covered repairs
  • Saves for eventual replacements without rush

Easy Budgeting

  • Flat rates every year
  • No surprise hits to savings

While it may feel like you’re less at risk for home repair crises in the first few years of ownership, unexpected breakdowns show no mercy based on age or neighborhood.

The smartest homeowners utilize warranties for that extra sense of financial security and savings year after year. Don’t chance it without one! Reach out to a recommended home warranty provider to explore rates and coverage options for your new or existing home today.