Home Warranties: Are They Worth It? How to Pick the Best One for Your Home

Picture this: You wake up one morning, step into the kitchen to make coffee, and realize your refrigerator isn’t cold. The food inside is already on its way to spoiling. Frustrated, you call a repair company, only to be hit with a service charge before they even diagnose the issue. Then, they tell you it’s going to cost hundreds—maybe even thousands—to fix.

This is the kind of moment when homeowners start wondering if a home warranty is worth it.

A home warranty is a service contract designed to cover unexpected breakdowns of major home systems and appliances. While it isn’t the same as homeowner’s insurance—which protects against disasters like fire or theft—a home warranty provides coverage for wear and tear on things like heating and cooling systems, plumbing, electrical work, and even kitchen appliances.

But is a home warranty really a good investment? That depends on your home, your needs, and, most importantly, the warranty plan you choose.

The Pros and Cons of a Home Warranty

The biggest advantage of having a home warranty is financial protection. Repairs and replacements for major systems like HVAC units, water heaters, or electrical wiring can be expensive, and a home warranty helps cover those costs. Rather than paying thousands out of pocket, you’ll only need to pay a set service fee for each claim—usually around $75 to $150.

There’s also the convenience factor. Instead of scrambling to find a reliable repair person when something breaks, your home warranty company handles everything. With one call or online request, they’ll send a pre-approved technician to diagnose and fix the issue.

For homebuyers, warranties can be a lifesaver. Moving into a new home is stressful enough without worrying about whether the previous owner left you with a failing dishwasher or a hidden plumbing problem. Sellers often offer home warranties as a selling point, giving buyers confidence that they won’t face unexpected repair costs right after closing.

But home warranties have their drawbacks too. Not everything is covered, and every company has its own fine print regarding exclusions. Some warranties won’t cover items that haven’t been properly maintained or systems that fail due to code violations. Others might deny claims for “pre-existing conditions,” which can be frustrating if you move in and find out your air conditioning doesn’t work—only to be told it was already broken before the warranty took effect.

Another downside? Limited control over repairs. Unlike hiring your own trusted repair person, home warranty companies use their own network of contractors. While some homeowners have great experiences, others find that the service providers sent by the warranty company aren’t the most responsive or reliable.

How to Chose the Best Home Warranty

Not all home warranties are created equal, so it’s important to do your homework before signing up.

First, look at what’s covered. Some warranties cover only essential home systems like plumbing, heating, and electrical, while others include appliances like refrigerators, ovens, and washing machines. If you have a pool or septic system, you’ll likely need to add extra coverage.

Next, consider the cost. The average home warranty runs between $300 and $800 per year, depending on the level of coverage. But that’s not the only expense—you’ll also need to pay a service fee every time you make a claim. If a company has low annual fees but high service fees, you could end up paying more in the long run.

Customer service and reputation matter too. Not all home warranty companies handle claims the same way. Before committing, read reviews and check ratings with the Better Business Bureau. Look for feedback on how quickly claims are processed, whether repairs are done correctly, and how often claims get denied.

Another thing to check is the claims process. Some companies make it easy to file claims online or through an app, while others require lengthy phone calls and paperwork. If a warranty provider is slow to respond, you could be stuck without heat in the winter or without a working fridge for days.

Who Should Get a Home Warranty?

Home warranties aren’t for everyone. If your house is brand new, your appliances and systems are likely still under manufacturer warranties, making an additional warranty unnecessary. On the other hand, if your home is older and your systems are nearing the end of their lifespan, a warranty could save you from expensive repairs.

For homeowners who aren’t handy or don’t want the hassle of finding contractors, a home warranty can provide peace of mind. Instead of worrying about who to call when the furnace stops working, you can simply file a claim and let the warranty company handle it.

Sellers and real estate agents also benefit from offering home warranties as an incentive to buyers. A warranty can make a home more attractive to potential buyers, knowing they won’t be on the hook for unexpected repairs after moving in.

Final Thoughts

A home warranty isn’t a magic solution for all home repairs, but for many homeowners, it can be a valuable safety net. It’s especially useful if you have an older home with aging systems or if you prefer the simplicity of having one go-to provider for home repairs.

The key is choosing the right warranty. Read the fine print, compare companies, and make sure you understand the coverage limits and exclusions before signing up. While no warranty will cover everything, finding the right plan can provide financial protection and peace of mind—so that the next time your fridge stops working, you won’t have to panic.

Would you ever get a home warranty? Have you had any experiences—good or bad—with one? Share your thoughts with me on my Instagram @watchmeasirealestate