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Confused about the difference between home warranties and service agreements? You're not alone. Understanding which option truly protects your home—and your wallet—can save you thousands of dollars in unexpected repair costs.
When it comes to protecting your home's appliances and systems, the terminology can be confusing. "Home warranty," "service agreement," "extended warranty"—these terms are often used interchangeably, but they represent very different types of coverage with vastly different benefits.
In this comprehensive guide, we'll break down exactly what each option offers, what it costs, and—most importantly—which one actually delivers the protection you need when something breaks down at the worst possible moment.
Average annual savings with a home warranty
of homeowners who don't have coverage regret it
Typical cost of major home system replacement
A home warranty (also called a home service contract) is a service agreement that covers the repair or replacement of major home systems and appliances due to normal wear and tear. Unlike homeowners insurance, which covers damage from events like fires or storms, a home warranty protects you from the inevitable breakdown of aging appliances and systems.
Heating, cooling, ductwork
Wiring, panels, outlets
Pipes, water heaters, stoppages
Refrigerator, oven, dishwasher
Washer, dryer
Motor, springs, tracks
A service agreement, often called an extended warranty, is typically purchased when you buy a new appliance or system. It extends the manufacturer's warranty for a specific item, covering repairs or replacement of that single product for a defined period.
Only the appliance or system you purchased the agreement for
Coverage varies—some include labor, others charge separately
Only defects and malfunctions, not normal wear and tear
Let's break down the key differences so you can make an informed decision about protecting your home.
| Feature | Home Warranty | Service Agreement |
|---|---|---|
| Coverage Scope |
Multiple Systems & Appliances Entire home protection |
Single Item Only One appliance at a time |
| Monthly Cost |
$30-$75 Comprehensive coverage |
$50-$300 Per item, upfront |
| Service Call Fees |
$0 - No Fees |
$75-$150 per visit |
| Labor Costs |
100% Covered All labor included |
Varies Often additional cost |
| Technician Network |
15,000+ Local Pros All trades covered |
Brand-Specific Only Limited locations |
| Response Time |
24-48 Hours Same-day for emergencies |
3-7 Days Depends on location |
| Claim Limits |
Unlimited |
Often Capped |
| Coverage for Wear & Tear |
Yes |
No |
| Replacement Guarantee |
If Not Repairable Full replacement included |
Sometimes Often pro-rated credit only |
| 24/7 Support |
Yes |
Rarely |
For comprehensive protection, better value, and true peace of mind, a home warranty from ServiceOne outperforms traditional service agreements in every category.
Get Protected TodayLet's compare what happens when multiple things break down in the same year—a common reality for homeowners.
Your 8-year-old home experiences three common failures within one year:
In July
In October
In December
HVAC Repair
Service agreement purchased with AC
$250
Water Heater Replacement
No service agreement (common)
$1,800
Refrigerator Repair
Extended warranty expired
$925
Plus stress and coordination hassles
HVAC Repair
Covered by home warranty
$0
Water Heater Replacement
Covered by home warranty
$0
Refrigerator Repair
Covered by home warranty
$0
($50/month Ă— 12 months)
Plus peace of mind all year
That's a 396% return on your warranty investment. And this scenario isn't unusual—it's exactly why smart homeowners choose ServiceOne.
$0
Out-of-pocket repair costs
3
Major repairs covered
100%
Peace of mind
Join 50,000+ homeowners who chose comprehensive protection over limited coverage.
Here's our expert guidance based on different homeowner situations.
Your home is 5+ years old
Appliances and systems are past their prime and more likely to fail
You want comprehensive protection
Cover all major systems and appliances under one plan
You don't have emergency savings
A $2,000+ repair bill would strain your budget
You value convenience
One call handles everything—we find the technician and coordinate service
You're buying/selling a home
Provides peace of mind during the transition period
You want predictable costs
Fixed monthly payment with no surprise repair bills
âś“ Best for Most Homeowners
Everything in your home is brand new
New construction with all new appliances and systems
You have one expensive appliance
High-end item where extended coverage makes sense
You have substantial emergency savings
Can easily afford unexpected $5,000+ repairs
You're handy and can DIY some repairs
You handle minor issues yourself
You plan to upgrade soon anyway
Replacing major systems in the next 1-2 years
Limited Use Cases
After analyzing thousands of homeowner situations, we recommend home warranties for 90% of homeowners. The comprehensive coverage, predictable costs, and peace of mind far outweigh the limited benefits of individual service agreements.
The bottom line: If your home has multiple appliances and systems that are more than a few years old, a home warranty from ServiceOne will save you money and headaches. It's not just insurance—it's an investment in your home and your financial security.
Don't wait for disaster to strike. Join over 500,000 homeowners who have made the smart decision to protect their homes and their budgets with ServiceOne's comprehensive warranty coverage.
Limited Time Offer: Get 50% off your first month when you sign up today!
Plans start at just $30/month with no long-term commitment required.