The Latest Home Warranty Industry Statistics Explained
The home warranty industry is expected to grow annually by 9.4% between 2021 and 2028.
The statistic indicates that the home warranty industry is projected to experience a consistent annual growth rate of 9.4% from 2021 to 2028. This growth rate suggests a positive outlook for the industry, with expectations of increasing demand for home warranty services over the specified period. Factors driving this growth could include rising homeownership rates, increased awareness of the benefits of home warranties, and a growing emphasis on protecting investments in residential properties. The projected growth rate of 9.4% per year serves as a valuable insight for industry stakeholders, enabling them to make informed decisions and strategic plans to capitalize on the expanding market opportunities within the home warranty sector.
As of 2020, the home warranty industry was valued at $1.5 billion.
The statistic that the home warranty industry was valued at $1.5 billion as of 2020 indicates the total estimated worth of this industry in terms of revenue generated from providing home warranty services. This value represents the sum of all the premiums paid by consumers in exchange for coverage on home systems and appliances. It serves as a measure of the industry’s overall financial significance and market size, showcasing the level of demand for such services among homeowners looking to protect themselves against unexpected repair and replacement costs. This statistic can be used by industry stakeholders, policymakers, and analysts to evaluate the economic impact and growth potential of the home warranty sector.
Over 4 million Americans have a home warranty policy.
The statistic “Over 4 million Americans have a home warranty policy” indicates that a significant number of U.S. residents have chosen to purchase a home warranty as a form of protection for their household appliances and systems. Home warranties are popular among homeowners as they offer coverage for unexpected repairs and replacements, providing a sense of financial security and peace of mind. This statistic highlights the prevalence of home warranties as a common investment for Americans looking to safeguard their homes and manage potential maintenance costs efficiently.
Most home warranty policies cost between $300 and $600 per year.
The statistic “Most home warranty policies cost between $300 and $600 per year” indicates that a significant portion of home warranty policies fall within the price range of $300 to $600 annually. This information suggests that the majority of consumers purchasing home warranty policies can expect to pay an average of $300 to $600 per year for coverage. Understanding this statistic can help homeowners budget for potential expenses related to home maintenance and repairs by setting aside funds within this price range for a home warranty policy to protect against unforeseen expenses.
The average payout on a home warranty claim is $1,357.
The statistic stating that the average payout on a home warranty claim is $1,357 means that, on average, when a homeowner makes a claim on their home warranty policy, the insurance company or warranty provider pays out $1,357 to cover the costs associated with the claim. This figure represents the typical amount of money that policyholders can expect to receive when they file a valid claim for covered services or repairs on their home. It provides insight into the average financial impact of utilizing a home warranty policy to address unexpected maintenance or repair issues within the home.
29% of home warranty customers make at least one claim per year.
The statistic “29% of home warranty customers make at least one claim per year” indicates that nearly one-third of customers who have purchased a home warranty file a claim within a year. This implies that there is a relatively high likelihood of needing to utilize the home warranty benefits for repairs or replacements within a 12-month period. The percentage suggests that a significant portion of customers may experience issues with their covered appliances or systems, leading them to seek assistance through the warranty provider. This statistic can be important for both consumers and insurance providers in understanding the frequency of claims and the potential cost implications associated with home warranty coverage.
Regardless of where homeowners live, over 60% believe that home warranties provide significant ROI.
The statistic indicates that a majority of homeowners, regardless of their location, perceive home warranties as yielding a considerable return on investment (ROI), with over 60% holding this belief. This suggests that a significant portion of homeowners value the protection and financial benefits offered by home warranties, such as coverage for repairs or replacements of major household systems and appliances. The finding implies that homeowners perceive home warranties as a worthwhile investment that can potentially save them money in the long run by offsetting costly repair or replacement expenses. Additionally, the consistent belief in the ROI of home warranties across different regions suggests that this perception is widespread and not limited to specific geographical areas, highlighting the perceived value of such warranties among homeowners.
14% of home warranty claimants report having to pay out of pocket for repairs.
This statistic indicates that out of all the individuals who have made home warranty claims, 14% have reported having to cover some of the repair costs themselves. This suggests that although home warranties typically cover certain repairs and replacements, there is still a notable portion of claimants who end up having to pay out of pocket for some expenses. This could be due to various reasons such as certain items not being covered by the warranty, limitations on coverage amounts, deductibles, or specific terms and conditions outlined in the warranty agreement. It highlights the importance for homeowners to carefully review and understand their home warranty coverage to avoid unexpected costs.
There are over 100 companies offering home warranty policies in the US.
This statistic indicates that there is a large market for home warranty policies in the United States, with over 100 companies offering such services. Home warranty policies typically cover the repair or replacement of major home appliances and systems in the event of mechanical failures or breakdowns. The high number of companies in this market suggests that there is a demand for these types of services among homeowners looking to protect themselves against unexpected repair costs. Competition among these companies may lead to a wide range of options for consumers, offering different coverage plans and pricing options to suit various needs and budgets.
American Home Shield, the oldest company in the industry, covers over 1.7 million homes.
The statistic that American Home Shield, the oldest company in the industry, covers over 1.7 million homes represents the significant market reach and dominance of the company in the home warranty industry. This figure highlights the trust and reliance that a large number of homeowners have placed in American Home Shield to protect their homes against unexpected repair and maintenance costs. The impressive number of homes covered also speaks to the company’s established reputation, strong customer base, and extensive experience in providing home warranty services. Overall, this statistic underscores American Home Shield’s position as a major player in the industry, with a wide customer base benefiting from their services.
The failure rate for central air systems covered under home warranty policies is 38%.
The statistic states that 38% of central air systems covered under home warranty policies experience failures. This means that a significant proportion of these systems require repair or replacement during the coverage period. A high failure rate of 38% indicates that central air systems may be prone to issues, potentially leading to costly repairs for homeowners and insurance providers. Understanding this statistic can help homeowners make informed decisions about their home warranty coverage and maintenance strategies to mitigate the risk of system failures and associated expenses.
The US Home Warranty market is expected to register a CAGR of 10% from 2020-2025.
This statistic indicates that the United States Home Warranty market is projected to experience a Compound Annual Growth Rate (CAGR) of 10% over the period from 2020 to 2025. A CAGR provides a smoothed annual growth rate over a specified time frame, in this case suggesting consistent and stable growth over the next five years in the home warranty industry. This forecast implies a positive outlook for the market, predicting significant expansion and increasing demand for home warranty services in the United States throughout the specified period.
In 2020, 58% of the Global Home Warranty Market belonged to the United States.
The statistic ‘In 2020, 58% of the Global Home Warranty Market belonged to the United States’ indicates that the United States held a dominant position in the home warranty market worldwide for that year. This means that more than half of the total market share for home warranties globally was captured by the United States. This statistic suggests that the United States likely has a strong presence in providing home warranty services, both to consumers within the country and potentially to customers in other parts of the world. The high market share also implies that the United States is a key player in shaping trends, developments, and competition within the global home warranty industry in 2020.
Home warranties in the US can cover up to 21 home systems and appliances.
This statistic indicates that home warranties in the US can typically provide coverage for a wide range of home systems and appliances, with some plans covering up to 21 different items. These items may include major systems such as heating, cooling, and plumbing, as well as appliances like refrigerators, dishwashers, and washers/dryers. By having a home warranty that covers these items, homeowners can potentially save money on costly repairs or replacements that may arise due to normal wear and tear over time. The extent of coverage and the specific items included can vary depending on the warranty provider and the plan chosen by the homeowner.
About 63% millennials who bought homes opted for home-warranty insurance.
The statistic indicates that approximately 63% of millennials who purchased homes chose to invest in home-warranty insurance. This finding suggests that a significant portion of younger homebuyers value the protection and peace of mind that home-warranty insurance offers, potentially reflecting their desire to safeguard against unexpected maintenance costs or repairs. The decision to opt for this type of insurance could also highlight millennials’ inclination towards financial planning and risk mitigation, as well as their prioritization of long-term property maintenance and upkeep. Additionally, it may imply a growing awareness among this demographic of the potential benefits and practicality of home-warranty insurance in managing homeownership expenses.
Conclusion
The home warranty industry continues to show steady growth and resilience, with homeowners increasingly recognizing the value and peace of mind that a home warranty can provide. As reported statistics indicate, the industry is set to expand further and evolve to meet the changing needs of consumers. Overall, these statistics highlight the importance of understanding the trends and data driving the home warranty sector for both homeowners and industry professionals alike.
References
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9. – https://www.www.globenewswire.com
