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Are Home Warranties Worth It?

Spoiler alert: yes. Here are five common scenarios where having a home warranty will save you money.

June 15, 2022


Your home is one of the most important assets in your life, but it requires maintenance and is often a continual investment of your time and money. Luckily, you can protect your wallet from an unexpected repair bill by purchasing a home warranty policy.

Home warranties are coverage plans for your home's appliances and systems. Say your refrigerator, HVAC system, sump pump, pool, or other protected home feature suddenly stops working—instead of paying for repair or replacement costs, your home warranty partner will cover the prices for you.

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We researched five common scenarios where purchasing home warranty coverage is the financially savvy move. Your home is one of your greatest investments; protect that investment with a home warranty.

1) You're Buying a Used Appliance

A used appliance is a great way to save money while upgrading your previous ones or when installing one for the first time. You can help increase those savings even further, as home warranty coverage can protect your investment.

For example, if you bought a used refrigerator and it breaks down, you might be looking at buying another refrigerator to replace it—at an average cost of around $2,000. With home warranty coverage, that $2,000 could dip down to $0 out of your pocket for repair or full replacement.

Home warranty companies often allow customers to insure almost any used appliance or system, as long as you have a record providing basic purchase information. Often a simple sales receipt will do, as the home warranty company needs to know when the unit was made, who the manufacturer was, and when the unit was purchased.

Most home warranty companies will not set a maximum age requirement for appliance or system coverage. This means you can purchase an older, used appliance with confidence.

2) You’re Not Sure Your System will Survive Another Year

Let's say your HVAC system survived another hot summer, but you know it's on its last legs. While you're relieved your system made it through, you're also not looking forward to the idea of calling a repair technician in the height of the busy season next summer. In this situation, a home warranty could save you hundreds of dollars and prevent a lot of stress.

Similar to other forms of insurance, newly-signed customers will have to outlast a short waiting period for their home warranty coverage to kick in. As a result, it's smart to purchase coverage for any vulnerable system when it's not being heavily used, i.e., when it's less likely to break down and need emergency repair. Home warranties can be purchased year-round so your system will be fully protected by the time the heavy-use season comes around.

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3) You’re Selling a Home



If you’re in the market to sell your home, attaching a home warranty plan to your systems and appliances can sweeten the deal for potential buyers.

A great feature of a home warranty plan is its transferability: a home warranty can be easily transferred to a new owner. If your home features appliances and systems that have been in use for a few years, tacking on home warranty coverage for the buyer can give them confidence that they won’t incur unexpected expenses soon after closing. A potential buyer will feel much more confident in their investment if they know that the home’s oven, HVAC system, fridge, and other units are insured.

There’s no need to be worried about future premium payments for a home warranty plan you no longer benefit from. If you’re passing your home warranty onto your home’s new buyers, the premium payments can be transferred onto the new owners.

4) You’re Buying a Home

After covering the down payment, home furnishings, and moving costs, the last thing a new homeowner should have to worry about is a budget-busting broken appliance or system. If you’re in the market to buy, consider asking the seller for home warranty coverage or looking into purchasing a plan yourself.

The primary benefit here is the protection of your investment. Your new home may feature the smartest refrigerator you’ve ever seen or the most powerful air conditioning system on the market, but top-of-the-line appliances often mean higher repair and replacement costs.

If you’re worried about tacking premium payments onto your already stretched budget, consider negotiating the price of the home warranty contract as part of the sale.

5) You’re Adding on to Your Home



Homeowners who are looking to build onto their homes can protect their new additions. Home warranty companies often feature a la carte protection options for units such as:

    • Pools
    • Hot Tubs
    • Spa systems
    • Electronics (TVs, computers, sound systems, gaming consoles)

Similar to an insurance rider, home warranty contracts are often flexible. Customers can request more or less coverage as their needs change within their homes. If you already have home warranty protection, but recently installed a swimming pool in your backyard, you can request an add-on without having to sign an entirely new contract.

Get a Home Warranty Quote Today

In our opinion, there are a variety of common scenarios that make home warranty coverage worth it.

No matter your situation, consider getting a home warranty quote today. Quotes are free, only take a few minutes, and can be completed entirely online.

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