Are Home Warranties Worth It?


Homeownership comes with its share of expenses and responsibilities. To lessen the financial burden of unexpected repairs, many property owners rely on home warranties to cover certain repair and replacement costs. Some wonder whether home warranties are worthwhile, and we’ll answer that question by exploring their pros and cons below.

Financial Reassurance

A major benefit of home warranty plans is that they offer protection from high home repair costs. When you consider buying a home warranty, you’ll gain peace of mind by knowing that your home’s major systems—such as electrical, plumbing, and HVAC—are covered.


Home warranty plans come with pre-screened provider networks, which can be convenient for those who lack the time or ability to find reliable repair contractors. Warranty companies find, hire, and dispatch technicians, simplifying the repair or replacement process.

Easy Budgeting

Among their many responsibilities, homeowners must budget for ongoing maintenance and upcoming repairs. Home warranties allow property owners to budget predictably, as annual fees stay the same. The predictability of home warranty costs makes these plans a great choice for those on fixed incomes.

Higher Home Values and Greater Marketability

Some buyers find that warranty coverage is a strong selling point when purchasing homes. These plans are bonuses that make homes more attractive in today’s competitive real estate market. If you’re considering selling your home, a warranty may make it more enticing to potential buyers.

Limitations and Exclusions

Home warranties, despite their benefits, come with plenty of exclusions, fine print, and limitations. Some items are not covered, and there are payout limits on replacements and repairs. Before signing up for a home warranty, carefully review its terms and conditions to avoid costly surprises.

Deductibles and Service Fees

While home warranty plans are great in that they cover most replacement and repair costs, homeowners must pay deductibles or service fees on every claim they make. These fees add up with time, and in some cases, they can exceed the cost of repairs.

Exclusion of Pre-Existing Conditions

Home warranties do not always cover pre-existing conditions, which are issues that come about before purchase. Existing issues are excluded during waiting and inspection periods, limiting the plan’s effectiveness.

Service Quality May be Inconsistent

Not all providers are the same, and the quality of service may vary from one company to another. Some homeowners end up dissatisfied with the contractors sent by home warranty companies, citing issues such as poor workmanship, delays, and communication breakdowns.

Coverage Overlap With Homeowner’s Insurance Policies

Homeowners with existing coverage on specific systems and appliances, along with those who have comprehensive insurance policies, may see little benefit from a home warranty plan. In these cases, paying for overlapping coverage isn’t a cost-effective idea.

Is a Home Warranty a Good Buy? The Choice is Yours

The answer to the question of whether a home warranty is a worthwhile purchase depends on your preferences and circumstances. For those who value the reassurance that comes with financial protection from costly repairs, a warranty plan may be a good buy. It’s important to carefully read the plan’s terms, assess its coverage limitations, and consider the potential for out-of-pocket costs. As with other financial decisions, research and understanding will help you make an informed decision on whether a warranty aligns with your financial and homeownership goals.