Buying a Home Warranty: Important Things To Know

Buying a home warranty is a great way to keep yourself covered, especially in the world where multiple offer situations and waived inspections are becoming commonplace. They provide you with peace of mind, knowing that many repairs will be fixed and covered by the warranty company if anything happens to your home.

Created by Iain McKelvey

Purchasing a home warranty can be an expensive option, but it is worth the cost for many homeowners. If you consider buying a new home or if your current home is at risk of breaking down in the near future, then purchasing a house warranty may be beneficial. A house warranty provides you with protection against costly repairs to your appliances and plumbing systems, as well as your roof and other structural components. 

The average homeowner spends $2,000-3,500 on their annual heating bill each year, which averages about $20 per day! With that being said, insuring yourself against such high costs would only cost about $60-$100 annually, which would save you thousands over ten years.

The best time to buy a home warranty is before you need it. If you're thinking about buying one, don't delay! Home warranties can be expensive, and many people find that they never use them. However, when your heating system breaks down in the middle of winter or your dishwasher leaks all over your kitchen floor, you'll wish you had bought one early on.

What is a Home Warranty?

A home warranty is an insurance policy that covers repairs and replacements of essential items in the house. It offers protection against unexpected expenses for homeowners who have major repairs or replacement costs.

This is a contract between the owners and an insurance company. The homeowner pays an annual fee for the coverage, which covers repairing or replacing major appliances in their homes. If something breaks down and needs to be fixed, they call the company and tell them what's wrong with it. They then get a list of authorized service providers that will fix it for them at no additional cost.

The decision to buy a home warranty can be an important one, especially for first-time homebuyers. As you may know, the cost of homeowners insurance is not always enough to cover your repairs and renovating needs. A home warranty will protect you from unforeseen costs by covering all or some of your expenses in case of disaster. 

You could purchase a home warranty that covers just certain things like appliances or HVAC systems, but it's best to get something more comprehensive because then there won't be any surprises when it comes time to file a claim. 

This can be great because it covers all sorts of needs without worrying about being able to pay for them on your own. It's also important to know what exactly is covered by the plan to avoid any surprises when something goes wrong.

How Much is a Home Warranty?

The cost of buying a home warranty is always relative to the size and quality of your new or existing home. A good rule of thumb for determining how much a home warranty will cost is considering your total costs upfront, including any potential maintenance fees or repair bills that may occur in the future.

The average cost for a home warranty ranges from $500-$2,000 per year, depending on where you live in the country. Your monthly payment will depend on how much coverage you want to buy with several options available, including Basic (covers only what the manufacturer's original warranty would have covered), Plus (covers additional items such as garage door openers), and Platinum (most extensive coverage). You can also customize your plan by adding extra protection against specific issues such as leaks or flooding.

A home warranty does not guarantee that the owner will not have to pay for repairs and maintenance. Some issues will be excluded from the insurance, either because the owner did not buy insurance for that object or because the insurance company does not insure that product. In addition, most home warranties exclude items that have not been adequately managed. Moreover, even if the warranty company refuses a claim, the owner is still accountable for the servicing cost and repair charges.

What Home Warranties Do and Do Not Cover

Home warranties are a type of insurance that covers your home against certain repairs and damages. As one would expect, the coverage is limited to items you have paid for the warranty. Check out This Old House for a list of the best home warranties in California.

For example, suppose you have an expensive refrigerator that needs repair or replacement due to a covered failure. In that case, it will be replaced with another brand new refrigerator without any out-of-pocket costs to you. 

However, if something like your dishwasher goes out and is not covered by the policy - because perhaps you didn't buy an extended warranty - then there's nothing stopping you from having to pay full price for a replacement appliance.

Home warranties typically come with three main coverage options: 

  • Appliances
  • Mechanical systems
  • Labor and materials (parts)

The type of coverage desired by homeowners will depend on what they want protection from. Those looking for appliance protection will have different needs than those who desire coverage for plumbing or heating/cooling systems.

The Benefits of a Home Warranty

Home warranties are an investment.  If you're a homeowner looking to protect your property, investing in a home warranty plan may be the best option for you. A home warranty can cover maintenance costs and repairs on many aspects of your home, such as appliances, heating, air conditioning systems, plumbing fixtures, electrical wiring, and more!  

Most importantly, it will provide peace of mind knowing that if something goes wrong with any one of these items in your home- a service technician will come out to fix it for free!  Isn't that worth the cost?

A home warranty is a contract that protects your family and your investment in the event of unforeseen repairs.  There are many benefits to purchasing a home warranty, including peace of mind, protection for all systems at your home, and guaranteed coverage. 

A few more things you may want to know about a home warranty include: 

  • coverage on major appliances up to $1 million
  • coverage on heating and cooling units
  • protection against water damage caused by plumbing leaks; no deductibles or hidden fees

It's important to note that not every homeowner needs one because there are different policies with varying costs depending on what you need to be covered. If you're looking for an affordable way to protect yourself from unexpected repair costs, then this is it! 

The Drawbacks of Home Warranties

One of the most important and often overlooked decisions you make is getting home insurance as a homeowner. Home warranties are often seen as an extension to your homeowner’s policy coverage, but some major drawbacks may not be worth it for you.

One of the most significant drawbacks of a home warranty is that it won't cover objects that haven't been treated properly. What constitutes regular maintenance may be a big blurred line, and it's the basis of a lot of squabbles among home warranty providers and their customers. 

Under the worst circumstance, shady warranty providers might utilize the faulty management provision to reject legitimate claims. Another possibility is that the owner and the contractor who comes to the house argue on necessary upkeep.

Home warranties are cheaper than the expense of fixing the majority of a home's essential aspects, which is one of their most appealing features. However, there could be many months where nothing really in the house breaks or wears out. In return for her charge during these years, the owner receives nothing. 

That amount would have at least gotten dividends if it had been put into a savings account. In addition, an owner who wants to use the warranty and has the claim refused would likely feel as if the membership and maintenance call charge were wasted.

If you want the warranty to reimburse for the servicing, you also lose the right to hire your specialist. You are left with no choice if you don't like the provider or the job they've completed. In addition, the homeowner may not influence the brand or type of a new device, even if the warranty agreement should give a comparable or identical product.


Home warranties are a great investment in your future. They give you peace of mind and protection when something goes wrong with your appliances or systems, and cover everything from plumbing to electrical, which can be very expensive if they break down on their own. A lot of people don't want to pay an extra monthly fee, but in many cases, it's worth it.

The same way people buy extended warranties on cars, tech products, and other complex items, home warranties alleviate much of the stress on the average homeowner. It's important to do your research on the right one for you, taking into account the areas of your house that are outdated, and given weather conditions in your area, before buying a home warranty.

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