Calculators / Measuring and costs
Is a home warranty worth it for you?
It depends on the plan, how old your systems are, and whether a big repair bill would hurt. Put those in and get a straight answer.
Updated · How we check our numbers
Probably not worth it
$850 a year, likely more than it pays you
Your systems are mostly within their expected life and you could cover a surprise bill. The average customer gets back less than they pay; you'd do better saving the premium.
- Your cost
- $850/yrplan + 2 service fees
- Average payout
- $268per plan, Frontdoor 2025
- Past expected life
- 0of 4 you entered
- 5 years saved instead
- $4,250
Estimate for planning only, not professional advice. Check the manufacturer’s instructions, your local code and a licensed professional before you buy, build or install. Use at your own risk. Terms.
Compare plansPrices, caps and fine print from the big providers
plan price = $600 a year
service fees = 2 claims × $125 = $250
your cost = $850 a year
average payout: Frontdoor (American Home Shield) spent 45% of revenue on services in 2025, about $268 of every $600 plan
systems past expected life: 0; within 2 years: 1
Your systems
NAHB life expectancy- Heating and AC8 years old; expected life central AC 15 years, gas furnace 187 yrs left
- Water heater6 years old; expected life tank 10 to 11 years, tankless 20+4 yrs left
- Refrigerator5 years old; expected life 13 years8 yrs left
- Dishwasher7 years old; expected life 9 yearsClose
American Home Shield's parent spent about 45 cents of each revenue dollar on repairs and replacements in 2025. That's the business: the average customer pays more than they get back. A warranty pays off for the households with more breakdowns than average.
Caps per item and per year; whether pre-existing problems are covered (some cover unknown ones for home buyers, others never); whether you'll need maintenance records (New Jersey settled with one provider over denials for missing records); the waiting period (often 30 days); refrigerant, permits, code upgrades and haul-away; and the cancellation fee.
Most states license home warranty companies through the insurance department (California, Florida, Arizona) or a licensing agency (Texas TDLR, Virginia VDACS). Check complaints with yours and your attorney general before you buy.
Putting $850 a year into savings instead builds $4,250 in five years, with no caps or exclusions.
How we work it out
What you pay. The plan price plus a service fee every time a technician comes out.
your cost a year = plan price + service fee × claims
What comes back, on average. Frontdoor, the company behind American Home Shield, is the only big provider that publishes its numbers. In 2025 it took in $2.09 billion and spent $936 million, 45%, on the cost of services. Its customers file almost two claims a year. So the average customer pays noticeably more than the work they get; that margin is the business. A warranty pays off for the households that have more breakdowns than average.
Who that is. The likeliest breakdowns are in old equipment. We compare your ages with the NAHB/Bank of America study of home component life: central AC 15 years, heat pump 16, gas furnace 18, tank water heater 10 to 11, refrigerator 13, dishwasher 9, washer 10, dryer 13, range 13 to 15. DOE finds longer average lives in its rulemakings, so treat these as signs, not deadlines.
Our verdict is a rule of thumb, shown in full: free when a seller or builder pays; worth a look with three or more systems past their expected life, or two and no savings for a $5,000 surprise; otherwise, save the premium. Either way, check that the plan's cap would cover a replacement of what's likely to fail.
Where the numbers come from
- Frontdoor Inc. 2025 annual report (Form 10-K)
- NAHB / Bank of America: Study of Life Expectancy of Home Components (2007)
- Texas TDLR: residential service companies (home warranties)
- California Department of Insurance: home protection contracts
- New Jersey Attorney General: Choice Home Warranty settlement (2015)
- Arizona Attorney General: top issues with home warranties
- American Home Shield sample plan agreement (July 2024)
Home warranties
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