Are Home Warranty Plans Worth the Cost?

Are Home Warranty Plans Worth the Cost?

Are Home Warranty Plans Worth the Cost?

Are Home Warranty Plans Worth the Cost?


There are a lot of costs associated with homeownership, along with plenty of strategies that can help you keep those costs low. One of those strategies is getting a home warranty.

 Many people wonder whether home warranty plans are worth the cost. The short answer is that these plans typically are, as long as you choose one of the best home warranty companies. However, there are some caveats to keep in mind.


  1. Take a closer look at the costs.

 To decide if a home warranty plan is worth the cost, you need to study those costs more closely. The exact premium you pay will depend on the plan you choose, but most have monthly fees of under $100, with most being closer to $25 to $50. You will also typically have to pay service call fees or service fees of about $50 to $100, depending on your plan.

While you have those costs, you save money on potentially expensive repairs or replacements for appliances. Having appliances repaired can set you back at least $100 to $200. More serious repairs can easily be more expensive.

A home warranty plan also helps you save money when dealing with significantly damaged appliances that require replacement. After all, most home appliances easily cost over $1,000 brand new. Larger appliances, like a gas furnace or central air conditioner, can have price tags of over $10,000.

Of course, you need to read the fine print on your chosen home warranty. Most are designed to pay for repairs, not replacements. Pay attention to the language regarding replacements as well as coverage caps.

Most policies will let the coverage caps handle the replacement issue. This means if you need to replace your fridge and your home warranty plan covers up to $1,300 for it, the insurance company will pay $1,300 towards the cost of a new fridge, and you will pay the difference.


  1. There’s no guarantee you can take full advantage of a home warranty plan.

 One important thing to remember is that there is no guarantee that you will ever have to use your home warranty plan. If your appliances never have any issues, you will end up spending more on the plan than you would potentially save.

 That being said, most people will experience at least some issues with their appliances. This is especially true if you have some older appliances at home.


  1. You also need to pay attention to the fine print.

 Another caveat is that many home warranty plans have clauses or conditions that may be unclear or difficult to understand. For instance, many of these plans require regular maintenance for various appliances. If you file a claim, expect to provide proof that you met the appliance’s maintenance requirements. The company may deny the claim if you fail to meet these requirements.

 Aside from these considerations, there are also some upsides to having a home warranty plan in place. Consider these benefits so you can make a more informed decision:


Time is money.

 This is another factor that makes home warranties worth the cost. Without one of these plans, you would have to take the time to look for technicians to work on each of your appliances. This can be incredibly time-consuming.

 Insurance companies already have a network of technicians. These professionals have been vetted, so you can just choose a technician from your insurance company’s network. This saves you the time you would have spent searching for the right repair company.


Avoid scams or low-quality repairs.

 The fact that home warranty plan providers have a network of trusted technicians means that you don’t have to worry about low-quality repairs or potential scams. These could cost you a significant amount of money.

 While scams directly take money out of your pocket, low-quality repairs will end up costing more in the long run. These would also take up more of your time, as you have to deal with a technician each time the appliance needs to be repaired.


The Bottom Line: Home warranties are usually worth it with used appliances.

 While there is no guarantee that a home warranty will be useful to you, it is likely to be worth the investment if your appliances are not all brand-new. If your appliances are all fresh from the store, you can probably skip the warranty.

 However, if you have a collection of secondhand or used appliances, you should consider getting a home warranty plan to save money on repair and replacement.