Average Cost of Home Warranty Coverage in 2025

A home warranty can be a wise investment that saves homeowners money on home maintenance and repair, but consumers need to find the right plan to maximize their savings. Part of determining the best plan is having a thorough understanding of all the costs associated with a given policy.

In this post, we’ll break down the costs that go into a home warranty policy to understand the average cost of coverage today.

How Much Does a Home Warranty Cost?

For most home warranty plans, the upfront costs include a premium and a service fee. These are your direct, out-of-pocket expenses. The exact amount will vary depending on several factors, including:

• Type of plan
• Extent of coverage
• Age and condition of your home and appliances
• Size and type of your home
• Number of add-ons or extra services

In 2025, the average annual premium for a home warranty ranges between $300 and $600. Many providers offer flexible monthly payment options, typically landing between $25 and $50 per month.

In addition to the premium, you’ll also pay a service fee each time you file a claim. These fees usually range from $50 to $150, depending on the provider and your chosen plan.

Example:

Let’s say you select a home warranty with:

• An annual premium of $450
• A service fee of $100
• You submit four claims in a year

Your total direct cost for the year would be:

$450 (premium) + $400 (4 claims × $100) = $850

If one of those claims was for a refrigerator replacement worth $2,000, you could be saving significantly compared to paying out-of-pocket.

Indirect Expenses

Many warranty plans, like insurance plans, have a deductible associated with them. This could be several hundreds of dollars or more. There are also coverage limits to consider. Some plans will have a cap on the amount they pay out.

Let’s revisit out example from above. The homeowner spent $850 out of pocket on the yearly premium and service fees. They received a new refrigerator valued at $2,000. Let’s say the plan’s deductible was $500 and the coverage limit was $1,500. That would mean the homeowner paid $1,350 for the year—the premium, service fees, and deductible combined. The policy would cover the remaining cost of the refrigerator. That would meet the coverage limit, however, so the plan would no longer pay out for repairs for the remainder of the year.

In our example, the homeowner ultimately received a $2,000 refrigerator for $1,350, but that’s assuming he or she didn’t require any other home repairs or services.

How to Find the Most Cost-Effective Plan

The bottom line is there is a lot of variability in costs associated with home warranties. It’s important for homeowners to do their research, examine different policies, and weigh all direct and indirect expenses. Your research will reward you. The amount you spend on the right home warranty policy will be less than the average appliance repair cost.

Liberty Home Guard has worked hard to be the most consumer-centric home warranty provider in America. Get in touch with our team to talk through your needs and find a cost-effective plan that makes sense for you. You can request a free quote through our website. You can also call us at (833)-544-8273.