What Is Home Repair Insurance? (2024)

Home repair insurance, like the plans from American Home Shield and Liberty Home Guard, provides financial protection for home system and appliance breakdowns.

Amy Beardsley
Written byAmy Beardsley
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Amy BeardsleyInsurance Writer
  • 3+ years writing about auto, home, and life insurance

  • 7+ years in personal finance and technology

Amy specializes in insurance and technology writing and has a talent for transforming complex topics into easy-to-understand stories.

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Courtney Mikulski
Courtney MikulskiSenior Editor, Auto
  • 3+ years producing insurance and personal finance content

  • Main architect of the Insurify Quality Score

Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.

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Updated December 19, 2023

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Homeownership has its fair share of surprises, especially when appliances or systems break down. But home repair insurance is available as a safeguard that can ease the financial sting. It’s not as well known as a regular homeowners insurance policy, but it’s popular for the security it offers.

Home repair insurance helps with costs when critical systems like heating or plumbing fail. It also covers fixing or replacing essential appliances, such as refrigerators, water heaters, and clothes washers and dryers.[1] The right plan can soften the blow of large repair expenses, but it doesn’t cover everything.

Here’s what you need to know.

Quick Facts
  • Home repair insurance typically runs $300 to $600 per year.

  • Home warranties don’t cover existing damage, maintenance, or natural disasters.

  • Home repair insurance is a different product than homeowners insurance.

What is home repair insurance?

Home repair insurance, also called a home warranty or home protection plan, is like a safety net for your home’s systems and appliances. It helps pay for repairs or replacements when things like your oven, electrical system, or air conditioner stop working. If something goes wrong, the home warranty company sends a professional to fix it, and you usually pay a service fee.

For Example

Home repair insurance may cover instances when your water heater is pumping out lukewarm or cold water, or your refrigerator isn’t keeping food cold. Instead of paying the entire cost to fix or replace it, your home repair insurance can help with the expenses in exchange for a monthly or annual fee.

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What home repair insurance covers

When big-ticket items in your home break down, home repair insurance kicks in to cover the cost. Because each plan is different, your coverage varies based on the company you choose. Reading the fine print of your service contract is important to know what your plan includes and what might have additional costs.

Here’s a snapshot of common items a home warranty may cover:

  • Heating system

  • Air conditioning

  • Ductwork

  • Electrical system

  • Plumbing system

  • Clothes washer and dryer

  • Refrigerator

  • Oven and range

  • Dishwasher

  • Garbage disposal

Home repair companies can offer additional coverage, too. Consider adding protection for a sump pump, septic system, central vacuum, pool, or spa for more peace of mind.

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What home repair insurance doesn’t cover

While home repair insurance is excellent for unexpected big repairs, even the best home warranty companies don’t cover everything. If your fridge has a scratch, for example, a home warranty or home repair insurance plan won’t help you out. It also doesn’t cover items that were already broken before the warranty started.

Another significant point to remember is that home warranty plans don’t replace the need for home insurance. If your home has damage from a fire or flood, your home insurance — not home warranty — covers repairs. 

While plans vary, here’s a quick list of what home repair insurance doesn’t typically include:

  • Pre-existing issues

  • Cosmetic flaws that don’t affect how the item works

  • Routine maintenance and upkeep

  • Structural components, like walls, floors, and roofs

  • Natural disasters

While home repair insurance can be helpful, it’s important to know its limits and keep these exceptions in mind.

Do you need home repair insurance?

Home repair insurance is worth thinking about, but whether you need it depends on your specific situation. If you have brand-new appliances, coverage is less critical because manufacturer warranties cover your home appliances and systems. But home repair insurance for older appliances can save you from steep repair bills for unexpected breakdowns.

Your financial cushion is also a factor. If you have an emergency fund, you might be able to pay for repairs on your own. But a home warranty plan can be a valuable purchase if the cost of a sudden HVAC repair or refrigerator failure would hit your wallet hard.

How much does home repair insurance cost?

Home warranties can cost around $500 per year.[2] Basic coverage, which typically includes major appliances or a few home systems, is cheaper, while more protection comes at a higher cost.

You’ll also need to consider the service fees you’ll pay when a technician or contractor visits your home. Those can range from $50 to $150.

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Best home repair insurance companies

Picking a home repair insurance company is a crucial step in protecting your home. Different plans protect different parts of your home, like your electrical system, furnace, or kitchen appliances. The key is to match the coverage to your specific needs. Think about what parts of your home you rely on, and make sure your plan includes those items.[3]

Reviews from other homeowners can also offer insight. They can tell you a lot about how responsive a company is and the quality of their repair work. To help you decide, here are plans from some of the best home repair companies and what makes them stand out.

American Home Shield

American Home Shield has three protection levels that vary in coverage to include major home systems and roof leaks. Additional coverage for electronics, pool equipment, and more is available to customize your protection.

Plus, your plan takes care of repairs from normal wear and tear, installation mistakes, and older items, even if you don’t have maintenance records.

Liberty Home Guard

Liberty Home Guard has flexible coverage to fit various budgets. You can choose the appliance-only plan for cost efficiency, the systems-only plan for more coverage, or combine the two for total home protection.

For more security, choose from an extensive list of optional add-on home repair coverages. You can choose your contractor, but the company must authorize the selection first.

Choice Home Warranty

You can choose between two coverage levels with Choice Home Warranty. The basic plan covers essential home systems but doesn’t include air conditioning, refrigerator, washer, or dryer. Optional coverages like protection for your pool, spa, roof leak, and stand-alone freezer are limited but can expand your protection.

America’s 1st Choice Home Club

America’s 1st Choice Home Club offers the most variety with four distinct plans. They vary from basic to plans covering up to 18 systems and appliances for ultimate protection. You can choose your own technician, which is a good option if you have a preferred service professional. The company also locks in your rate for five years, protecting your budget.

Home repair insurance FAQs

Navigating home repairs can be tricky. Here are answers to some of the most frequently asked questions about home insurance.

  • Does home insurance cover foundation repair?

    It’s possible. Home insurance may help fix your foundation, but coverage depends on the cause of the damage. If a tornado whips through and wrecks your foundation, your homeowners insurance can step in to cover repairs. Your policy may also cover damage from a plumbing backup or fire. But if your house is getting older and the foundation is settling, insurance usually won’t cover it.

  • Can you file a home insurance claim after a repair?

    It’s best to call your insurance service company before you repair anything after a covered incident. If you fix something before letting the insurance company know, your policy may not cover the cost.

    Keep in mind that home insurance is meant to cover significant loss from covered events, not minor repairs. If you want coverage for home repairs, consider a home warranty or home repair insurance plan.

  • Does home insurance cover roof repair?

    Home insurance can help with roof repairs, but it all depends on how the damage happened. Homeowners policies can pay for roof repairs from covered events like a fire, storm, or hail if it’s in the policy. But if your home’s roof is worn out from age or poor upkeep, your insurance company won’t cover repairs.

  • How can you save money on home insurance?

    Saving money on home insurance is possible with three strategies. Start by shopping around to compare prices from different companies. Then, consider increasing your deductible, which is the amount you pay before insurance kicks in when you file a claim. Finally, make your home safer by installing smoke detectors and security systems to lower your insurance bill.

Sources

  1. Federal Trade Commission. "Warranties for New Homes."
  2. Washington, D.C. Office of the Attorney General. "Consumer Alert — Home Warranties."
  3. Federal Trade Commission. "Extended Warranties and Service Contracts."
Amy Beardsley
Amy BeardsleyInsurance Writer

Amy is a personal finance and technology writer. With a background in the legal field and a bachelor's degree from Ferris State University, she has a talent for transforming complex topics into content that’s easy to understand. Connect with Amy on LinkedIn.

Courtney Mikulski
Edited byCourtney MikulskiSenior Editor, Auto
Courtney Mikulski
Courtney MikulskiSenior Editor, Auto
  • 3+ years producing insurance and personal finance content

  • Main architect of the Insurify Quality Score

Courtney’s deep personal finance knowledge extends beyond insurance to credit cards, consumer lending, and banking. She thrives on creating actionable content.

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