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What a home warranty service fee is and how to compare it
This page explains what a home warranty service fee is and how to compare it between contracts. It uses guidance from state regulators and the FTC. It is general information, not legal advice. Rules differ by state, so check your own contract and your state's rules.
What the fee is
Most home warranty contracts charge a fee each time you request a repair, in addition to the price of the contract itself. Contracts call it different things, including a service fee, a service call fee, a trade call fee or a deductible.
Arizona's Department of Insurance and Financial Institutions lists, among the costs a homeowner might have to pay, "The annual contract fee." and "A fee for each service call, whether repairs are made or not." (read 2026-10-15).[1]
The DC Office of the Attorney General says there "may be a deductible (an amount you must first pay before the home warranty company will pay your claim)" and that some companies "may charge you a service fee, typically $75 or more, each time you need a repair." (read 2026-10-15).[4]
Why it matters for the total cost
The FTC suggests you "Consider both the upfront cost and costs that may be hidden, like deductibles or fees you need to pay each time products are serviced." (read 2026-10-15).[3]
A simple way to compare is to add the yearly contract price to the fee multiplied by the number of repair visits you might need.
| Illustrative only | Contract A | Contract B |
|---|---|---|
| Yearly contract price | $600 | $480 |
| Fee per visit | $75 | $125 |
| Total with 2 visits | $750 | $730 |
| Total with 4 visits | $900 | $980 |
These figures are made up to show the arithmetic. They are not prices from any company.
Per visit, or per repair?
The Massachusetts Division of Insurance advises: "If there is a deductible, verify whether it is for each service call or for each repair. For example, assume your deductible is $50. If your stove and your clothes dryer malfunction and only one service call is made, are you required to pay $50 or $100 deductible? You may also be charged a fee for each service call. Make sure you know how much the fee is and when it will be charged." (read 2026-10-15).[2]
Where the amount must appear
Arizona's guide says a service contract must state "the cost of the contract, the effective and expiration dates, and the service fees or deductibles for which you are responsible." (read 2026-10-15).[1] That describes Arizona's rules. Other states' rules differ, so check your own contract and state.
Other costs the fee does not cover
The Arizona guide lists other costs a homeowner might pay, including "The cost to "access" systems", "Fees to dispose of old appliances or system components" and "Fees for state or local building inspectors and related permits." (read 2026-10-15).[1]
Checklist: questions to answer from the contract
- What is the fee called, and what is the amount?
- Is it charged per visit, per trade, or per covered item?
- Is it charged when a claim is denied or the item isn't covered?
- Is it charged if you miss the appointment or cancel after a technician is on the way?
- Is there a second fee if a repair fails again soon after?
- Can the company change the fee at renewal, and how much notice does it give?
- Other states' rules differ. Check your own contract and your state's rules.
FAQ
What is a home warranty service fee?
It is an amount you pay each time you ask for a repair, on top of the contract price. Arizona's regulator lists "A fee for each service call, whether repairs are made or not" among the costs you might pay.
Is a service fee the same as a deductible?
Contracts use different names. The DC Attorney General describes a deductible as "an amount you must first pay before the home warranty company will pay your claim". Check your own contract for what it calls the fee and when it is charged.
Where do I find the amount?
Arizona's regulator says a service contract must state "the service fees or deductibles for which you are responsible". Other states' rules differ; check your own contract and state.
References
- [1] Arizona DIFI consumer guide: Home Warranty Service Contracts. https://difi.az.gov/sites/default/files/Home%20Warranty%20Service%20Contracts%2020201110%20%281%29.pdf
- [2] Massachusetts Division of Insurance: Service Contracts. https://www.mass.gov/doc/service-contracts/download
- [3] FTC consumer alert: So what's the deal with home warranties? (February 24, 2023). https://consumer.ftc.gov/consumer-alerts/2023/02/so-whats-deal-home-warranties
- [4] DC Office of the Attorney General: Consumer Alert: Home Warranties. https://oag.dc.gov/consumer-protection/consumer-alert-home-warranties