Home warranty • Real costs
Cheapest Home Warranty Plans Compared: The Real Yearly Cost
The cheapest home warranty is the one with the lowest total cost: the yearly price plus the service fees you pay on each claim, minus what the plan actually pays. With four claims a year, a $30-a-month plan with a $150 fee costs $960, while a $45-a-month plan with a $75 fee costs $840.
Here is how to work out the real cost. Blake Insurance Group is an independent agency, and a licensed agent can compare the options we offer in your area.
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How to work out the real cost
Yearly cost = 12 × the monthly price + the service fee × the number of claims you expect. Then compare what each plan would pay on your most likely repair, given its caps.
Examples
| Plan example | Monthly | Service fee | Yearly cost (4 claims) |
|---|---|---|---|
| Low price, high fee | $30 | $150 | $960 |
| Higher price, low fee | $45 | $75 | $840 |
| Industry average | $73 | $108 | $1,308 |
Illustrative math. Industry averages: NerdWallet: best home warranty companies.
Costs that don’t show on the quote
- Fees charged on denied claims (Choice charges its $100 fee even then).
- Low caps that leave part of a replacement to you.
- Depreciated payouts on old equipment.
- Monthly handling fees, such as First American’s $2 per payment.
Sources: NerdWallet: Choice Home Warranty review; Consumer Reports via WSLS (July 2026); NerdWallet: First American Home Warranty review.
What to check before you buy a home warranty
- The sample contract, including exclusions and per-item caps
- The service fee per claim and whether it applies to denied claims
- The waiting period and any limits in the first months
- Maintenance records the company may ask for
- How cancellation and refunds work
What a home warranty is
A home warranty is a service contract that pays to repair or replace covered home systems and appliances, such as HVAC, plumbing, electrical systems, and kitchen appliances, when they fail from normal wear. The FTC calls home warranties “really service contracts” that run for a set period and cost extra, and the California Department of Insurance says a home warranty “is not an insurance policy” and doesn’t replace homeowners insurance.
Fees, caps, and waiting periods
Most home warranties share a few terms. Direct-to-consumer plans commonly start after a 30-day waiting period, while plans bought at a real estate closing often have none. You pay a service or trade call fee for each repair visit, and contracts set per-item caps, often $2,000 to $5,000, and sometimes an aggregate cap. Exclusions for pre-existing conditions and lack of maintenance are common, so the FTC and Texas regulators suggest asking about fees, caps, exclusions, who chooses the repair company, and cancellation terms before you buy.
How home warranty claims work
You usually call the company, which sends a contracted technician; you pay the service fee at the visit. Texas regulators suggest asking who chooses the repair company and how quickly repairs must be made, and Iowa warns that work not authorized by the service company will be denied, so don’t hire your own technician without approval. If a claim is denied, ask for the reason in writing; New Jersey’s 2015 settlement with Choice Home Warranty required written denial reasons on request.
You still need homeowners insurance
A home warranty doesn’t cover fire, storm, theft, or liability claims. Homeowners insurance covers sudden damage from covered perils, and the CFPB notes that mortgage lenders generally require it. Flood needs a separate policy.
Liability and umbrella coverage
Personal liability coverage pays if you’re legally responsible for someone’s injury or property damage, including legal defense. Homeowners policies often come with $100,000 or $300,000 of liability, and many people choose more. An umbrella policy adds liability coverage above your home and auto policies; Triple-I says insurers generally want about $250,000 of auto liability and $300,000 of homeowners liability underneath.
What an independent agency does
An independent insurance agency is licensed to sell policies from several insurance companies. Instead of quoting one company's products, an independent agent can compare options from the insurers the agency represents, explain the differences in coverage, and help you re-shop at renewal. The insurance company, not the agent, makes underwriting and claim decisions.
Blake Insurance Group is an independent agency. We work with clients by phone, email, and online in states where we are licensed, and we will tell you which insurers we can quote for your situation.
How to verify an insurer or agency
Before buying through any website or app, confirm who is selling you the policy and who will issue it:
- Find the licensed agency or insurer named in the site's footer, terms, or license page.
- Look up the agency or producer on your state insurance department's license search, or through the National Insurance Producer Registry (NIPR).
- Look up the insurer on your state insurance department's company search to confirm it is authorized in your state.
- Save the insurer's name and policy number once issued, since that is who handles claims.
A legitimate service will make this information easy to find. Be cautious if you cannot identify the licensed entity.
Sources for the sections above: FTC (Military Consumer): What’s the deal with home warranties? (2023); California Department of Insurance: Home protection contracts; TDLR: Residential service companies (home warranties) (2021); Iowa SmartHER Money: Service contracts (2025); New Jersey AG: Choice Home Warranty settlement (2015); Triple-I: What is an umbrella liability policy?; NAIC: Consumer Insurance Search.
Cheapest home warranty FAQs
How do I compare home warranty costs?
Add 12 months of premium and the service fees for the claims you expect.
Is a lower monthly price always cheaper?
No. A higher service fee can make it cost more over a year.
What is the average home warranty cost?
About $73 a month plus a $108 fee per claim, per NerdWallet.
Related guides
Important information
Independent agency. Blake Insurance Group LLC is an independent insurance agency. Licensed insurance producer NPN 16117464. Licensed states: AZ, AL, TX, CA, NY, OH, FL, NC, VA, GA, OK, NM, IA, KS, MI, NE, SC, SD, WV, IL, NJ, PA, TN, and WA. Which insurance companies we can quote depends on our current appointments, the product, and your state. Mentioning a company on this page does not mean we represent it.
Coverage terms. Descriptions are general. The policy contract controls what is covered.
Legal requirements. State requirements summarized here are general information as of November 2026 and can change. This page is not legal advice; confirm current rules with your state's insurance regulator or motor vehicle agency.
Availability. Coverage, prices, discounts, and eligibility vary by insurer, state, and applicant, and are subject to underwriting. The issued policy controls.
Your next step
Request a quote, and a licensed agent will compare options available to us using the coverage you choose.