Thinking of buying a home warranty? Here are questions to ask and information to help you decide if a home warranty is right for you.

When you purchase a home warranty you get a year-long service contract that covers the cost of repairing or replacing many important home systems and appliances in your home when they fail. Plans can include plumbing, electrical, heating, air conditioning, as well as major kitchen and household appliances you use every day.

Like most people, you probably already have homeowners insurance. Many people choose a home warranty to complement homeowner’s insurance, which protects the structure of your home against damage from things such as fire, storms and severe weather, vandalism, and accidents, but which doesn’t protect other items in your home that break over time.

With a home warranty plan, when a covered item breaks:

  1. Call your home warranty provider to request service
  2. They’ll dispatch a prescreened contractor to fix the covered item
  3. In most cases, all you pay is a low service fee for the visit

And if a covered appliance or system can’t be fixed, the home warranty company should replace it with similar equipment. Having coverage like this can add up to hundreds and thousands of dollars saved per year, plus someone else dealing with the hassle of finding a qualified contractor to fix the problem.

Is a Home Warranty Right for You?

When you consider if you should buy a home warranty, here are a few things to think about:

1. Are you on a tight budget?

Some experts suggest you should budget $1 for every square foot of your home each year to pay for home repairs and replacements. Other suggest saving 1% of your home’s cost (or value) in a yearly home maintenance fund. While it’s a great idea to have money set aside for unexpected (and even expected) expenses, putting aside thousands of dollars each year may not be feasible for many people.

With a home warranty you can rest easy knowing that if a covered appliance or system breaks, your budget is protected.

2. Do you have an older home?

You may have more reason to consider a home warranty if your home and its appliances aren’t brand new. Manufacturer warranties for new appliances typically last a year, but if you purchase with a credit card that includes extended warranty coverage that can add another year.

Home systems and appliances vary in their lifespan, but like many things, they often don’t last like they used to. How long can you expect your home systems and appliances to last? It depends, as reliability varies from brand to brand, but here are some general guidelines about how long things last.

3. Are you selling your home?

A home warranty can be a great way to help make your listing stand out against the competition. It can help the buyer feel more confident about purchasing your home, and submitting their best offer. Finally, a home warranty can help prevent the sale from being derailed or postponed if a covered item breaks down during the transaction. Ask your real estate agent for pricing and details.

4. Are you buying a home?

Buying a home can leave your budget a little tight for at least the first year. A home warranty is a great way to protect you from the unexpected expense of home system and appliance breakdowns. Plus, you’ll have an easy, time-saving way to find service providers when a covered item breaks. There are special home warranty plans for home buyers, so ask your agent for more information.

What Does a Home Warranty Cover?

When shopping for a home warranty, one of the first things you should check is to make sure it includes the items you need covered. Are you worried about appliances breaking? Many plans cover essential home appliances including your dishwasher, stove, refrigerator, washer, and dryer. Is your home older? Look for plans that cover systems such as plumbing, electrical, and heating.

Home warranty plans also offer optional coverage for items such as air conditioning, pools or spas, well pumps, and more.

Appliances HVAC Systems Plumbing System More Systems
Kitchen Refrigerator Central Air Conditioning Stoppages Electrical System
Washer & Dryer Heating System Leaks and Breaks Central Vacuum
Oven Range & Cooktop Ductwork Water Heaters Ceiling Fans
Dishwasher Thermostats Toilet Tanks & Bowls Attic & Exhaust Fans
Built-in Microwave Sump Pump Garage Door Openers
Garbage Disposal Pool & Spa Equipment
Trash Compactor Well Pumps

 

Is a Home Warranty Worth It?

If you’re buying or selling a home, there are special plans design to cover homes involved in a real estate transaction. You can see sample coverage for real estate home warranty plans, or ask your real estate agent for pricing and details.

When determining if buying a home warranty makes sense for you, it can be helpful to know the life expectancy for your home’s systems and appliances, and the costs to repair or replace those items. Here are some average costs for what you’d pay for repair or replacement bills without a home warranty:*

Home Systems:

  • Air Conditioner: $924 to $3,270
  • Heating System: $794 to $2,990
  • Plumbing: $473 to $1,130
  • Electrical System: $418 to $1,650

Home Appliances:

  • Refrigerator: $1,338 to $3,090
  • Oven/Range: $1,246 to $3,413
  • Washer/Dryer: $729 to $1,454
  • Dishwasher: $682 to $1,560

So what can you expect to pay for a home warranty? Home warranty costs depend on a number of factors, including where you live, the number and type of items covered, and if the home is involved in a real estate transaction. In general, however, basic home warranty coverage for homeowners starts at around $300 per year. You can easily get a quick home warranty quote to see what coverage could costs for your home.

Home warranty plans for home buyers and sellers in real estate vary even more in cost and coverage, so check with your real estate agent full details.

What isn’t Covered by a Home Warranty

A home warranty can protect your budget when inevitable breakdowns happen to essential home appliances and systems from normal wear and tear. But like insurance and other types of warranties, home warranty plans don’t cover everything.

For example, home warranties don’t cover:

  • Items that are already broken
  • Cosmetic damage
  • Misuse, neglect, or improper installation
  • Changing or modifying home’s structure

Learn more about home warranty plan coverage limits.

Find a Home Warranty That’s Right for You

Bottom line, if you want to protect your budget, don’t want to deal with the hassle of finding a qualified professional when things break, don’t have savings to cover expensive home system and appliance repairs, or your home systems and appliances aren’t brand new, buying a home warranty could be a good choice for you.