Is Home Warranty Worth it?

Your home is probably your most prized asset, so it’s important to do everything you can to protect it.

A home warranty is an excellent way to safeguard your home and budget by covering the costs of repairs or replacements for many of your home’s major mechanical systems and appliances.

But is a home warranty worth the cost?

According to House Method, a new homeowner will pay around 4.6% of their home’s purchase price in major repairs each year.

To learn more about home warranties, what they cover, and whether or not you should consider buying one for your home keep reading!

Is Home Warranty Worth it

What Exactly Is A Home Warranty?

A home warranty is something that offers reduced maintenance and replacement services for home appliances and systems included under the policy.

The terms of the agreement might vary, and the coverage is determined by the kind of warranty that is purchased.

You should know the difference between a home warranty and home insurance since a home warranty does not offer the same degree of protection that homeowners insurance offers.

The average cost of a home warranty is around $300 to $500 per year, with some companies offering coverage for as low as $200 per year.

On the other hand, homeowners insurance will cost you twice or thrice the price of a home warranty, depending on where you live and the value of your home.

Read: Select Home Warranty Review

Read: American Residential Warranty Review

Is Getting a Home Warranty Worth It?

Is Getting a Home Warranty Worth It

Since you never know when your house’s systems or appliances will break, a home warranty is well worth the money.

This type of home protection plan will give you peace of mind if a large household item breaks down, and it will save you time looking for a reputable contractor in your area to make repairs.

A house warranty may not be necessary if you’re buying a newly built home because your house will be furnished with brand-new smart appliances secured by a manufacturer’s warranty.

A manufacturer’s warranty covers appliances if they fail due to faulty materials or manufacturing.

Manufacturers’ warranties are often only good for a year or two and don’t include equipment and appliances that stop working due to regular wear and use.

Once the manufacturer’s warranty has expired, it would be a good idea to buy a home warranty.

This is what Reddit users think:

Are home warranties worth it?
by u/crapinlaws08 in personalfinance

What Are The Pros And Cons Of A Home Warranty?

Now that you know what a house warranty is, how much it costs, and whether getting one is worth it, ​​let’s take a look at the pros and cons of having a home warranty.


  • You’ll have peace of mind knowing that your home’s appliances and systems are covered in case they break down.
  • You can save money on costly replacements or repairs.
  • You won’t have to spend time looking for a reputable contractor to make repairs.
  • Your home will seem like a better deal to buyers if you have a home warranty in place.
  • Most home warranty companies offer 24/7 customer service.


  • Home warranties come with a lot of fine print, so you’ll need to carefully review this policy to determine what is covered and what isn’t.
  • There may be a service fee or deductible that you have to pay when you make a claim.
  • You may be required to use a specific contractor or repair company affiliated with the home warranty company.

Read: First American Home Review

How Does a Home Warranty Work?

How Does a Home Warranty Work

In a home warranty plan, you pay monthly fees or yearly fees, which can range between $450-$850 or more.

Once you sign up for your home warranty plan, you are required to wait for 30-90 days, depending on your company.

This is called the waiting period, and you can make claims only after the waiting period is over.

Now whenever any of your covered equipment or system breaks down, you can raise a claim by contacting your company.

You will get the repair and replacement done as per the coverage limit if your claim is accepted.

You will also have to pay a small service fee that can range from $50-$125 each time to the repairman.

What Is Covered In a Home Warranty Plan?

What Is Covered In a Home Warranty Plan

A home warranty essentially offers the repair and replacement of the appliances and system within a household or a combination of both. Here’s what a home warranty plan covers:


  • Dishwasher
  • Refrigerator
  • Washing machine
  • Dryer
  • Microwave
  • Oven & stove


  • Plumbing system
  • Electrical system
  • HVAC system
  • Water heaters, etc.

What Is The Difference Between Home Warranty & Home Insurance?

What Things Home Warranty Does Not Cover?

The extent of coverage in your home warranty plan depends on the company that you have chosen.

However, home warranty plans do not cover the following:

  • Commercial-grade equipment or system
  • Pre-existing condition
  • Corrosion or rust-related damage
  • Damage caused due to improper installation or negligence
  • Damage caused by pest
  • Structural issues

Bottom Line

A home warranty is well worth the money if you want to safeguard your home and budget against expensive repairs or replacements.

So make it a point to carefully read the fine print, understand what is and isn’t covered, and compare different home warranty companies to find the best coverage for your needs.


What are the best home warranty companies?

Cinch, Select Home Warranty, The Home Service Club, First American Home, and American Residential Warranty are some of the best and our top favorite home warranty companies.

Is it compulsory to have a home warranty?

Some people may confuse a home warranty with home insurance and may think it is compulsory to have a home warranty just like in a home insurance.

But the answer is no. It is not compulsory for you to have a home warranty.

Who should and who should't buy a home warranty?

People who have bought a new house with new appliances or people whose major systems and appliances are under the manufacturer’s warranty can avoid buying a home warranty for some time.

However, if you bought a house with pre-owned appliances or if your appliances are old, then you should definitely buy a home warranty plan.

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