Work out home warranty cost instantly with clear inputs, formula shown and shareable results.
A home warranty converts variable repair cost into a fixed premium plus a per-claim service fee. It pays when the number of covered failures exceeds the break-even count, which is the premium divided by the saving per claim. Below that threshold self-insuring is cheaper.
Cost comparison
With warranty = premium + claims x service fee; without = claims x repair cost
Break even
Claims to break even = premium / (repair cost - service fee)
With warranty = premium + claims x service fee; without = claims x repair cost. A home warranty converts variable repair cost into a fixed premium plus a per-claim service fee.
Exclusions. Pre-existing conditions, improper installation and cosmetic damage are commonly excluded, so the realised claim rate is lower than the failure rate the buyer expects.
This calculator takes 4 inputs: Annual warranty premium, Service fee per claim, Expected claims per year, Average repair cost without warranty. The pre-filled defaults are a realistic worked example — replace them with your own site or project figures.