energy
Home warranty: what the contract excludes
A home warranty is a service contract, not insurance and not a new heat pump. Premiums, per-visit fees, caps, and the exclusions that actually decide whether the quote is worth it.
The mail says your coverage is expiring. The realtor tossed a brochure in the closing packet. A heat-pump bid is on the table and someone said a home warranty will “take care of repairs.” Before you pay an annual premium, read the contract the way you would read an HVAC bid: what they will actually send a technician for, what they will not, and what you still pay when the unit dies.
The FTC treats these products as service contracts, not warranties. A warranty usually comes with the machine. A service contract is something you buy separately, for a fee, that may repair or replace listed items when they fail from normal wear. If a line is not listed as covered, assume it is not.
This is not homeowners insurance. Insurance is for fire, hail, and theft. A service contract is for a furnace that stops on a Tuesday because it is old. Mixing those two products is how people file a claim on the wrong company.
We may earn a commission if you request a quote through a Choice Home Warranty link on this guide. That does not change the price you pay, and it is not a vote that you should buy one. Read the sample contract first.
What does this actually cost?
HomeGuide’s 2026 home-warranty guide puts a standard plan at $420 to $720 a year ($35 to $60 a month), higher tiers $50 to $90 a month, and a typical service visit fee of $75 to $125. On that same table, Choice Home Warranty sits in the $35 to $60 a month band with a $65 to $100 service fee.
Angi’s 2026 home-warranty cost page is wider: average around $1,049 a year, most plans $222 to $1,877. Their “are they worth it” writeup puts annual premiums around $560 to $1,240, with Choice listed near $740, plus $85 to $125 per claim in that article’s fee band.
Angi: are home warranties worth it
D.C.’s Attorney General consumer alert is blunter: a basic plan can run $500 a year or more, a service fee is often $75 or more per visit, and a claim cap can look like $1,600 toward a $12,000 boiler. They also warn that “comprehensive” is a sales word, not a coverage word.
D.C. Attorney General: home warranties
Write the year in dollars before you compare brands. $50 a month is $600. Two approved service calls at $85 each is another $170. You are at $770 before anyone orders a part. Angi puts a typical HVAC repair at $350 on average, in a $130 to $2,000 band, with heat-pump work $200 to $2,000 and a full AC replacement $3,800 to $7,500.
A service contract that pays one average repair and denies the compressor is a savings account you cannot spend. A contract that actually replaces the outdoor unit, up to its cap, can beat a bad August. The cap is the number that decides which of those you bought.
EnergySage’s 2026 heat-pump install average is still $14,529 ducted and $15,393 across types, before local incentives. No $600 service contract is that job. If the real fear is a new machine, you are on heat pump vs furnace and the quote checklist, not on a warranty brochure.
What should you hunt in the sample contract?
Get the sample agreement for your state, not the marketing grid. Choice publishes plan grids (heating and air on Total, add-ons for well, septic, limited roof leak) and the legal line that this is a service contract, separate from a builder or manufacturer warranty.
Choice Home Warranty: what’s covered
Choice sample contract language used with real-estate packets has put a $5,000 per-12-month cap on access, diagnosis, and repair or replacement for each of air conditioning, heating, and ductwork, and $1,500 for geothermal or water-source heat pumps. Some of those samples exclude mini-splits, window units, condensate pumps, filters, humidifiers, crane costs, underground geothermal piping, and labor on parts still under a manufacturer’s warranty. Other state samples use a $3,000 per covered item cap. Your packet will not match a California realtor PDF. The point is that a cap exists, and HVAC is where it binds.
Choice sample coverage excerpt (CA realtor packet, PDF)
Mark these lines with a pen:
- Waiting period. Many non-real-estate enrollments start coverage 30 days after they accept the application and the fee. A unit that is already making a noise is a pre-existing condition, not a claim.
- Who picks the technician. You usually do not. If their network is thin in your county, you wait, or you hire someone and eat the bill.
- Per-visit fee. Paid whether they fix it or tell you it is excluded.
- Per-item cap. Compare it to Angi’s replacement band, not to the premium.
- Rust, corrosion, sludge, improper installation, mismatched indoor and outdoor units, lack of maintenance. Those words deny more claims than “wear and tear” ever pays.
- What they replace with. “Current SEER” or “failed components only” is how you get a legal condenser that does not match the coil, or a repair instead of a system.
- Cancellation and auto-renew. 30-day money-back is common. After that, pro-rata minus an admin fee and any service they already ran.
If you cannot get those seven in writing, you do not have a quote. You have an ad.
When does a repair fund beat the contract?
Put last year’s premium in a labeled savings account instead, and run the same year on paper.
Setup A. The house is ten years old, the heat pump still has factory coverage, and you can write a $1,000 check without blinking. Skip the service contract. Keep the filter on a calendar so “lack of maintenance” is not the story later.
Setup B. The air conditioner is 14 years old, you do not have $4,000 liquid, and you will actually file a claim instead of waiting until July. A systems plan can make sense if the cap on HVAC is in the thousands, mini-splits are listed if that is what you own, and you accept their contractor. Price the year as premium plus two service fees, then read the exclusion list out loud.
Setup C. Someone is selling you a new dual-fuel or a water heater and bundling a warranty so the bid looks safer. Manufacturer labor and parts on the new machine are the real coverage for the first years. A third-party contract that excludes manufacturer-warranty work is paying for overlap you will not use.
A letter that says “your home warranty is expiring” for a plan you never bought is a pitch. The FTC’s warranty pages are the place to start, and ReportFraud.ftc.gov is where junk mail goes. Do not call the number on the postcard.
How do I use a quote without getting bounced?
If you still want a number after the sample contract, request it the way you would request an HVAC bid: address, what is on the house (heat pump vs furnace plus AC vs mini-splits), and a PDF of the actual agreement for your state. Choice is one place that will send a quote. We may be paid if you go through this link.
Get a Choice Home Warranty quoteWhen the packet arrives, do this:
- Highlight HVAC, water heater, and the refrigerator line. Cross out anything that is an add-on you will not buy.
- Write the annual premium, the service fee, and the HVAC cap on one card. If the cap is under Angi replacement money, the contract is a repair plan, not a replacement plan.
- Search the PDF for mini-split, pre-existing, rust, mismatched, and manufacturer. If those words describe your house, stop.
- Compare that card to twelve months of a repair fund at the same premium. If you would not file two claims, the fund wins.
- If you buy, take pictures of the outdoor unit’s data plate and the last service invoice on day one, because “it was already broken” is the fight.
How does this go wrong?
You buy coverage on a closing packet and never open the PDF.
You call on a Sunday, they cannot send anyone until Thursday, and you hire a local anyway, then eat both bills.
The claim is denied because the coil and condenser are a mismatch, or because the unit needed a filter six months ago.
You think the $5,000 cap (or whatever your state sample says) is the price of a new heat pump. EnergySage’s install number is the price of a new heat pump.
A 2026 HVAC bid still subtracts a federal 25C credit. A service contract never had that credit. Do not mix the products.
How do I decide this week?
- Write last winter’s repair invoices and the age of the furnace or heat pump on one card.
- Price twelve months of a labeled repair fund at $420 to $720, using HomeGuide’s standard band, before you price a brand.
- Download a sample contract for your state and highlight the HVAC cap, the waiting period, and mini-splits if you have wall heads.
- If the sample still looks like a fit, request a Choice Home Warranty quote and compare the PDF to that card, not to the brochure.
- If the real job is a new machine, stop this cart and use the heat pump quote checklist.
- Do not call a number from a “final notice” letter you did not buy.