Home Warranty vs. Out-of-Pocket Repair Cost Calculator
Compare the total cost of a home warranty plan versus paying for repairs out-of-pocket to determine which option saves you more money over your planning horizon.
Home Warranty Plan Details
Out-of-Pocket Repair Details
Planning Horizon
Formulas Used
Warranty Effective Cost (Year y):
Warranty_y = (Annual_Premium × (1+r)^(y-1))
+ (Service_Fee × Claims_Per_Year × (1+r)^(y-1))
+ max(0, Gross_Repair_Value_y − Coverage_Cap × (1+r)^(y-1))
Out-of-Pocket Cost (Year y):
OOP_y = (Avg_Repair_Cost × Claims_Per_Year × (1+r)^(y-1))
+ (Major_Repair_Prob × Major_Repair_Cost × (1+r)^(y-1))
Gross Repair Value (Year y):
Gross_Repair_Value_y = (Avg_Repair_Cost × Claims_Per_Year
+ Major_Repair_Prob × Major_Repair_Cost) × (1+r)^(y-1)
Net Savings (positive = warranty wins):
Savings = Σ OOP_y − Σ Warranty_Effective_y (summed over all years)
Where r = annual inflation rate (decimal).