Should I buy a home warranty?” is a question that many homeowners, especially new ones, ask.

Sometimes sellers offer home warranties as a perk of the sale. 

But what should you do if you don’t already have a home warranty or the seller didn’t offer you one? 

How do you know if a home warranty will be worth the cost?

should i buy a home warranty

In this post today, we will go over a few facts, as well as the pros and cons of a home warranty plan, to help with your decision.

​In This Article

What Is A Home Warranty?

What exactly is a home warranty? A home warranty is a service plan or contract with a company. 

It can cover a combination of home appliances and home systems, depending on what type of plan you choose. The service contract covers regular wear and tear on system components. 

If something breaks, you call the home warranty company, and they send out a professional who will do the repair (or replacement) at either no cost or a discounted price.

What Does A Home Warranty Cover?

Home warranty coverage will vary according to the plan you select. However, there are several common types of plans. 

Often home warranties will cover major appliances in your home. 

Your washer and dryer, your refrigerator, your garbage disposal, and your stove, for example, would be covered under this type of home warranty.

Home warranties also might cover some of your home’s central systems, such as your AC, your furnace, and your duct-work.

When you are looking at home warranties, make sure to read the fine print to identify any exclusions. Some home warranty plans do not cover extras without an added cost. 

For example, if your home has a pool, including it in the coverage might cost you more.

How Much Does A Home Warranty Cost?

The average cost of a home warranty plan can range from $350 to $600. What you pay for your home warranty will vary based on several factors: 

What Type Of Home Is It?

Do you live in a single-family home? Is it a townhouse or a condo?

Coverage costs may change because different sized properties will have systems with varying needs and associated costs.  

Are You Getting The Basic Warranty Or Something More? 

When you compare home warranty coverage, you will discover that many companies offer basic plans or extended versions.

The extended version usually covers a mix of systems and appliances, and the premium is often higher.

What Is The Company’s Service Call Fee?

Within the industry, the service call fee can range from $50 to $125.

The service fee is the amount you will pay if a service person comes to your home to repair a covered item or system.

You should factor this cost into your planning when you look at prices for home warranty plans.

Are Home Warranties Worth It?

You should consider several factors when trying to decide if a home warranty is worth it.

Two important considerations are how old is your home and how old are the appliances inside?

When I bought my home, I knew that the washer was very old.

The owners had taken care of its maintenance regularly, but I figured there was a good chance it might die within a year. I knew I did not want to pay for a new washer.

When I looked at the numbers, a home warranty was worth the price. When my washer broke, the home warranty company replaced it.

The bottom line is, whether a home warranty is worth it depends on the company, the plan coverage, and your preferences.

It would be best if you considered the plan’s limits, as well as how comfortable you are with risk.

Who Should Buy A Home Warranty?

A home warranty is especially useful for someone who would like to have a backup in place if something unexpected happens to their home systems or major appliances.

If you are not particularly handy, a home warranty also might be the best option for you.

You might be offered a home warranty when you are purchasing a home; it can provide additional security after you have laid out so much money to buy the house.

are home warranties worth it?

Home Warranty vs. Home Insurance

A home warranty and home insurance might seem to be the same thing, but they are not. 

Lenders require homeowner’s insurance to obtain a mortgage. Home warranties are optional and are not insurance.

Home insurance covers the loss of your home and its contents in case of a disaster, such as a fire, thefth, natural disaster, lightning. 

Home insurance renews annually, and its price fluctuates based on your home’s value and other risk factors, such as if you own a pool or certain breeds of dogs.

A home warranty is a service contract and covers wear and tear on your appliances and sometimes the systems of your home. 

You can pay for your coverage monthly or annually, and the contract usually renews on an annual basis. How long your home warranty insurance will be good for depends on your policy.

Home Warranty

  • Protects Appliances & Systems
  • Not Insurance
  • Not Required To Close On A home
  • Easy To understand

Home Insurance

  • Protects Home From Destruction
  • Type of Property Insurance
  • Required To Close On A Mortgage
  • More complicated product

Pros & Cons Of A Home Warranty


  • You do not have to vet contractors yourself, which is a great benefit to someone new to the neighborhood. Finding the best service person can be a hassle. With a home warranty, the home warranty company does all of the legwork for you. 
  • A home warranty can provide a buffer so that if something breaks, you do not have to spend more money after purchasing a house and spending your savings. 


  • Read the fine print carefully. The details there will make a massive difference in your coverage. There are often exclusions and conditions to meet to qualify for coverage.
  • If the previous owners have not completed proper maintenance, an item or system might not be covered. Make sure that you have access to maintenance records.
  • You will not get to choose your contractor. Home warranty companies work with networks of professionals around the country, which is part of how they can offer discounted services. 

​Taking Action

With the right company, home warranties can be worth it—if they meet your needs and your budget. 

In 2020, you should buy a home warranty if you are interested in protecting your home and having a cushion if something breaks.

There is no need to wait around when it comes to protecting your home and appliances, click here to get the process started. 

Sa El

About the author

Sa El is the Co-Founder of Simply Insurance and a licensed Insurance Agent with over 11 years of experience in the industry.  He specializes in Life & Health Insurance and is certified in Long Term Care Insurance in the state of Georgia. He is also an Official Member of the Forbes Finance Council, a licensed real estate agent in the state of Georgia (License #382602), an entrepreneur, insurance educator, and freelance writer.

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