Are home warranties worth it? What to consider

Some homeowners, like yourself, may ask “Should I get a home warranty for peace of mind?” It’s a fair question and one that often comes up when the unexpected costs of homeownership start to feel overwhelming. Home warranties are often advertised as stress-free protection, but the truth is, they come with both pros and cons, and sometimes a lot of fine print.

It’s completely understandable to want a little extra coverage. Being a homeowner already involves enough uncertainty, and no one wants to be caught off guard by a broken furnace or failing appliance.

In this article, we’ll break down what a home warranty actually is, when it might be worth the money, when it might not be, and how to decide whether one makes sense for your unique situation.

Now, a home warranty isn’t the right fit for everyone, but it can be a helpful tool in the right context, and knowing the full picture can help you make a decision you feel good about.

Is a home warranty worth it?

In all honesty, it depends. To know if home warranty is really worth it for you, it mostly depends on your budget, how much you’re comfortable taking on, and how hands-on you want to be when it comes to your home repairs.

A home warranty can be worth the expense if you’re worried about unexpected breakdowns and want help managing repair costs. For example, if your furnace just stops all of a sudden in the middle of the winter, a warranty might help cover the repair or replacements without a huge bill that needs to be paid up front; and for homeowners who don’t have the time, tools, or network to handle repairs themselves, the ability to call a warrant company and have a technician assigned can be a real relief.

However, while these are great assets there are some liabilities. When filing a claim, scheduling service, and waiting for a technician, these requests sometimes take longer than just simply hiring a local contractor yourself. If you want repairs to be made fast, having a home warranty can become a downside, especially if the issue is urgent.

Cost is also another question to look into when it comes to home warranty. Most home warranty plans have annual premiums ranging from $500 to $700, plus a service fee (usually $75 - $125) every time a technician visits. Whether the warranty pays off depends on how often you use it and whether the repair falls under your plan’s coverage. Some homeowners save money with a warranty if their systems and appliances are older. Others who have newer appliances, or ones that rarely break down, may pay more in premiums and fees than they would for the occasional repair.

Before signing up, it’s important to understand what your plan includes, and what it doesn’t. Some claims can be denied due to things like preexisting conditions or improper maintenance. For some homeowners, navigating these coverage limits feel frustrating. For others, the trade-off is worth it to avoid surprise repair bills and gain a sense of security.

So, are home warranties worth it? They can be, but only if the cost, convenience, and coverage match your needs and expectations. If you value predictability and want a little extra support managing repair costs, a home warranty might give you the confidence you’re looking for. 

When is a home warranty not worth it?

While a home warranty can be helpful for some, it’s not the right fit for every homeowner. In certain situations, the costs and coverage limits may outweigh the home warranty benefits. Here’s when it might make more sense to skip the extra protection:

• You keep up with routine maintenance: If you’re already diligent about servicing your systems and appliances, a home warranty may not offer much added value. Most providers won’t cover issues caused by improper upkeep, and some even deny claims if maintenance records can’t be provided. So, if you’re already doing the work to keep your home running smoothly, a warranty might not cover the few problems that do come up.
• Your appliances and systems are new: Newer homes or recently updated ones often have appliances and systems that are still under manufacture warranties, that usually cover defects and repairs for the first few years. So, when it comes to getting a home warranty on top of that may not be necessary, especially when the risk of it getting damaged is low. It’s a good idea to review what’s already covered before paying for additional protection as well.
• You can’t find a policy that meets your needs: Not all homes are the same and some homeowners find it difficult to locate a plan that covers the systems they rely on most, especially if their home includes items like well pumps, septic systems, or specialty appliances. Even when coverage seems comprehensive, certain exclusions or vague contract language can create confusion. If you can’t find a plan that clearly fits your home, it may not be worth the cost or effort.
• You pay more in premiums than you save: Over time, it's possible to spend more on premiums and service fees than you’d pay for occasional repairs. For example, if you pay $500 per year for a warranty and only make one small claim with a $100 service fee, what you’re paying out of pocket might exceed the actual value of the repair. So, while the home warranty cost can make sense for frequent or expensive breakdowns, many homeowners find they rarely use the coverage or that the repair they need isn’t fully covered.

Home warranty pros and cons

Like any type of coverage, home warranties come with benefits and disadvantages as well. Here’s a quick breakdown of the home warranty pros and cons that can help you decide if signing up for a home warranty is the right fit for you.

Pros

• Financial protections from unexpected repairs: Major systems and appliances can break down without warning and repairs aren’t always cheap. A home warranty can help cover those surprise costs, potentially saving you hundreds or even thousands of dollars. For example, if your air conditioner fails during a heat wave, a covered repair could cost you just the service fee, instead of the full $1,200 or more regular price.
• Convenience and time savings: With a home warranty, you don’t have to search for a repair technician or wonder who to call. The warranty provider arranges the service for you, which can be especially helpful if you don’t have a go-to list of contractors. For example, your dishwasher stops working. You file a claim online, and a prescreened technician is scheduled to come out within a few days.
• Peace of mind: Some homeowners simply know they have a plan in place for breakdowns, especially if their systems or appliances are older or nearing the end of their lifespan. For example, you just moved into an older home with an aging furnace and washer/dryer. A home warranty gives you reassurance during the first year while you settle in and budget for future upgrades.

Cons

• Annual cost and service fees can add up: Most plans range from $500 to $700 per year, with service fees of $75 – $125 per visit. If you don’t use the plan much or at all you might end up spending more than you save. For example, you pay $500 for the year, file one minor claim, and still owe a $100 service fee. that repair might have cost less out of pocket.
• Coverage limitations and exclusions: Not everything is covered, and many plans have coverage limits for certain systems or appliances. Items that are poorly maintained, already broken, or incorrectly installed may not be eligible for repair. For example, your warranty doesn’t cover your refrigerator compressor because it wasn’t maintained according to manufacturer guidelines.
• Potential for denied claims: Even with coverage, claims aren’t always approved, which comes with frustration. The claims are mostly denied based on technicalities or vague contract language. For example, you assume your plumbing issue is covered, but the provider considers it a preexisting condition and declines the repair.
• Not all policies are easy to understand: Warranties can be filled with detailed terms that make it hard to know exactly what’s covered. That’s why it’s very important to carefully read the fine print and compare policies before signing up.

How to choose a home warranty provider

If you’ve decided a home warranty fits your needs, the next step is finding the right company. Not all providers offer the same value, so doing a little research up front can save you time, money, and frustration later. Here’s what to look for when choosing a reputable home warranty company:

• Checking customer reviews: Start by checking customer feedback online. Look for patterns, like repeated complaints about delays, denied claims, or poor communication. A few negative reviews are normal, but consistent red flags may be worth paying attention to.
• Compare coverage options: Not all policies cover the same systems or appliances. Carefully review each plan’s home warranty coverage, including what's included, what’s excluded, and the coverage limits for high-cost repairs. Make sure the plan fits your home’s setup, especially if you have unique features like a second HVAC unit, pool, or well system.
• Review service fees and contract terms: Most plans charge a service fee every time you request a repair, typically between $75 and $125. Some companies also charge extra for optional add-on coverage. Look for transparent pricing, easy-to-understand contract terms, and clear timelines for filing claims and getting service.

If anything is unclear while doing your research, reach out to the provider directly. A reputable company should be willing to walk you through the details, explain their process, and help you understand how claims are handled. This is also a good test of their customer support before you’re locked into a plan. Also, don’t rush into the first plan you see. Comparing a few different companies can help you weigh costs, coverage, service quality, and customer satisfaction, so you can feel confident you’re choosing the right match for your home and your budget.

Factors to consider before purchasing

If you’re still wondering if you still need a home warranty, take a close look at your home, budget, and repair preferences. Here are a few key factors to keep in mind before purchasing a home warranty:

• Age of your appliances and systems: If your home’s major systems like HVAC, plumbing, or kitchen appliances are more than a few years old, a home warranty might offer useful protection as they’re near the end of their expected lifespan. On the other hand, newer appliances typically come with manufacturer warranties, so additional coverage may not be necessary right away.
• Your financial comfort level: If there’s an unexpected $800 - $1,500 repair that would impact your budget and be difficult to manage, then getting a home warranty would help with that. A home warranty can offer more predictable costs and reduce financial stress. But if you have an emergency fund or feel confident covering occasional repairs on your own, paying for a warranty might not be necessary.
• Personal comfort with DIY repairs: Some homeowners enjoy doing repairs on their own or know of a trusted professional to call. In these cases, a home warranty might feel unnecessary to have, but if you're not completely comfortable with managing repairs or don’t want to spend time searching for contractors, then getting a home warranty can be a huge plus.
• Knowing what’s already covered: Before buying a policy, check to see what coverage you already have. You can do this by reviewing your homeowners insurance to understand what’s protected (usually unforeseen disasters, not breakdowns) and check whether your appliances and systems are still under manufacturer warranties. You may already be covered for common repairs, so there's no need to double up on expenses.

Alternatives to a home warranty

Home warranties can certainly be helpful, but they’re not the only option. Here are some alternatives to consider:

• Build an emergency fund: It’s a good idea to have an emergency fund for other things like medical expenses anyway, but you should also consider home maintenance as part of this for everything that would normally be covered by a home warranty and what isn’t. For example, you’ll have a hard time finding a plan going to cover roof replacement.
• Keep up with home maintenance: You may find that the cheapest option is to keep up with maintenance over time to extend the useful life of your home systems and appliances.
• Use included warranties for appliances or systems: If you still have lots of systems that are under the manufacturer’s warranty, it’s free to take advantage of these as opposed to paying for a home warranty.

FAQ

Can I purchase a home warranty at any time?

Yes, you don’t have to buy a home warranty at the same time you purchase a home. Many homeowners choose to add coverage later, especially if their appliances or systems are aging. However, most companies have a waiting period (typically 30 days) before coverage begins, so you won’t be able to file a claim right away.

Do home warranties cover preexisting conditions?

In most cases, no. Home warranty coverage typically ignores known preexisting conditions, meaning issues that existed before the plan started. Some providers may require maintenance records or a home inspection to verify that systems were in good working order.

Are home warranties transferable to new homeowners?

Yes, many home warranties are transferable if you sell your home. This can be an added selling point for potential buyers. Some providers offer free transfers, while others charge a small fee or require that the home be inspected before the transfer is approved.

What is the average cost of a home warranty?

In 2025, according to American Home Shield, the average home warranty cost ranges from $500 to $700 per year, depending on the provider, home size, and level of coverage. Service fees (or trade call fees) usually run $75 – $125 per visit. Additional factors like optional add-ons for pools or septic systems can also affect pricing.

How do I file a claim with a home warranty company?

Filing a claim typically involves:

1. Contacting your provider online or by phone
2. Submitting a claim for the issue
3. Scheduling a service technician through the company
4. Paying the agreed-upon service fee at the time of the visit

Make sure to report the issue as soon as possible and follow any provider-specific instructions to avoid delays or denials.

The bottom line: Home warranties can be helpful in certain situations

A home warranty isn’t a must-have for everyone, but it can be a smart option in the right circumstances. If your systems or appliances are aging, if you prefer predictable expenses, or if you’d rather not deal with the hassle of finding repair help on your own, a well-chosen warranty can offer real peace of mind.

At the same time, it’s important to go in with realistic expectations. Most plans come with coverage limits, exclusions, and service fees, so the value depends on how well the policy fits your home and lifestyle. Think about your unique situation; the age of your home’s systems, your ability to handle surprise repair costs, and how comfortable you are managing repairs on your own.

A well-matched home warranty can reduce stress and protect your budget, but getting that match takes research, comparison, and an honest look at what you really need. Whether you decide to purchase a plan or not, you’re now better equipped to make a confident, informed choice for your home.

Need help comparing options? Explore our guide to the best home warranty companies to see which providers might be a good fit.