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Is a home warranty worth it?

A girl in glasses looks back toward her house wondering; is a home warranty worth it?

As a homeowner, you understand that unexpected expenses like appliance breakdowns and major system failures can wreak havoc on your finances. Home warranties offer a potential solution, promising to help cover the cost of repairs or replacements for covered items. But is a home warranty worth it?

Benefits of a home warranty

  • Financial protection: A home warranty can help shield you from the high cost of repairing or replacing major appliances and home systems. This can be especially valuable for homeowners buying or inheriting a home with appliances nearing the end of their expected service life.
  • Budgeting certainty: Knowing a warranty covers certain repairs allows for more predictable budgeting. Instead of a surprise repair bill to pay in full, you have a consistent monthly cost.

Understanding the contract

  • Contract scrutiny is key: It's crucial to fully understand the warranty contract. When you know what to expect from the plans offered, you are better able to purchase the coverage that aligns with your needs.
  • Not an all-inclusive solution: Home warranties don't cover everything. 
  • Potential for delays: If the home warranty company has their own contracted staff of appliance techs, you may have to wait on their availability for repairs. Some home warranty companies offer the freedom to choose any licensed contractor, which can help save time with both locating a contractor and getting them paid.

Who can benefit most?

  • New homeowners with older appliances: For those inheriting a home with an aging appliance suite, a home warranty can offer valuable protection when appliances break down.
  • Those who dislike repair surprises: If the prospect of unexpected repair bills stresses you out, a home warranty can provide valuable assistance and peace of mind.

Who might not need it

  • DIY repair enthusiasts: If you're comfortable tackling repairs yourself, a home warranty may not be necessary. It’s also important to know that doing any repairs yourself could risk voiding any warranty in place. 
  • Homeowners with new appliances: Manufacturer warranties often cover new appliances for several years, potentially making a home warranty less beneficial. Some home warranties also feature limitations where items covered by manufacturer warranties do not qualify for coverage.

The final verdict

Home warranties can be a valuable tool for managing the financial risk of home system and appliance breakdowns. While they're not a one-size-fits-all solution, if you carefully consider your budget, the age of your appliances, and your comfort level with repairs, a home warranty could be a really good investment.