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The Pros and Cons of a Home Warranty

Find out if a home warranty policy is right for you. Editorial Team

February 17, 2023

If you own your own home or apartment—making you responsible for the upkeep and lifespan of its appliances and systems—deciding to purchase a home warranty should be at the top of your to-do list.

Like any product, home warranty policies are an incredible solution for some and an unnecessary expense for others.

The Pros

Price Differential

Home warranty premiums are often much cheaper than the costs associated with replacing a major appliance or system out-of-pocket.

Most home warranty policies cost between $80 and $120 a month(if anything goes wrong, you’ll also need to pay a service fee of about $100 per appointment directly to the service technician). Compare this to the out-of-pocket costs of replacing an HVAC system, which can average anywhere from $4,000–$12,000. Over a year, a home warranty policyholder could save between $2,460–$10,460 (depending on the price of the replacement).


If an appliance or system breaks down in your home, your home warranty company could save you hours of time and effort.

When an appliance or system malfunctions, most homeowners have to hunt down a relevant contractor, schedule a time to meet, describe the problem, wait for the contractor to complete their inspection, and then decide whether or not they can afford to pay for the repair or replacement.

Home warranty policyholders don’t have nearly so many hoops to jump through; instead, they simply notify their home warranty company of the problem. That’s all: the home warranty company takes care of finding, contacting, scheduling, and paying a technician.

Expert Servicing

Home warranty companies only send reputable, licensed technicians to their policyholders’ homes.

If an appliance or system breaks down, homeowners without a home warranty have to find an expert to repair the problem. If you’re not familiar with the techs in your area, this step can feel frustrating. What kind of technician is right for the job? How much should the repairs cost? Are you being overcharged?

When a home warranty company selects a technician for a system evaluation, they choose a local expert from their network of industry professionals. No research, no second guessing, just reliable work from a local pro.

Pricing Consistency

Home warranty policies are priced consistently over a year, making them much easier to include in a budget than the random financial spikes associated with appliance breakdowns.

For non-policyholders, an appliance breakdown could result in a $4,000+ price tag, seemingly out of nowhere.

Policyholders know in advance how much they’ll owe in home warranty premium charges for the year. For most homeowners, this consistent pricing schedule is the easiest way to plan a budget.

The Cons

Coverage Exclusions

A system or appliance may break down, but that doesn’t mean that the incident meets your coverage requirements.

Coverage exclusions are the most consistent complaint about home warranty policies. It feels unfair: you pay all this money in premiums, just to be denied coverage. Unfortunately, home warranty companies cannot provide blanket coverage for every incident.

To make sure you know what is and isn’t covered in your policy,, we recommend you read over your home warranty contract carefully before signing.

Premium Prices

In a year with little to no maintenance issues, premium costs can feel like money down the drain.

If a major appliance or system breaks down, the $1,450 or so you pay in annual home warranty premiums would save you money in the long run. However, a lucky year free from incidents would make you feel the opposite—if I never used my home warranty, why am I paying for it?

Coverage Limitations

Most home warranty companies will set a maximum limit on how much they will cover for particular repairs or replacements. But why do these exist? To protect home warranty companies from outliers. If an extremely pricey incident occurs, home warranty companies don’t want to foot the entire bill.

We recommend you read your contract carefully before signing to avoid a situation where you consent to a repair or replacement that outpaces your coverage limit.

Find Your Right-Fit Home Warranty

If you think you’d benefit from a home warranty company, but you’re not sure where to look, start here. Our list of top-rated home warranty companies makes it easy to find customizable home warranty policies for homes, apartments, and condos.

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