Homeowners face many unexpected expenses, and the cost of replacing a major appliance can be a real financial strain. Home warranties can help cover the expense of repairing or replacing a major appliance or system, but are home warranty plans worth it?
Home warranty plans are service contracts that help cover kitchen appliances, heating and cooling systems, plumbing, and electrical systems. Home warranties help cover issues that result from normal wear and tear. You’ll pay for the warranty upfront each month, but if an appliance or system fails, the home warranty plan could help you save money if your appliance needs to be repaired or replaced.
To decide if a home warranty plan is worth it, you’ll need to consider the potential cost of the warranty and how it compares to what you might pay if your major appliances or systems break down. For example, if you have appliances that are generally affordably priced, your home warranty fees over a few years could be close to what you would pay for a new appliance. Even with a home warranty, you’ll still pay a repair fee when you need to have a technician out, so weigh those potential costs before buying a policy.
Free Home Insurance Comparison - Save up to 30%
No junk mail. No spam calls. Free quotes.
No Signup required
There are some other factors to consider, too.
If you have new appliances still under warranty, the manufacturer’s warranty will usually cover many repair or replacement costs. Buying a home warranty makes more sense when your appliances are outside of the manufacturer’s warranty.
It can take some time before your home warranty provider schedules a technician to service your broken appliance. While you could potentially call around to numerous technicians to get faster service when you pay out of pocket, when you’re filing a claim with your home warranty company, you’ll have to wait for the company to schedule a technician.
Home insurance typically doesn’t include any coverage for appliances or systems that break down from wear and tear. Your home insurance will usually include coverage to replace your home’s contents if they’re damaged in an event like a fire, you’re fully responsible for fixing or replacing broken appliances and systems. If you want coverage to help with those repair and replacement costs, you’ll need to buy a home warranty.
Free Home Insurance Comparison - Save up to 30%
No junk mail. No spam calls. Free quotes.
No Signup required
A home warranty offers many benefits, but it’s important to be realistic about the drawbacks, too. Buying a home warranty can help you potentially save money if a major appliance or system needs to be repaired or replaced. But you’ll need to weigh the warranty costs against the potential cost of a new appliance to make sure that it’s worth buying the warranty. If you decide not to buy a warranty, it’s a good idea to build up your emergency savings so you’re prepared for any appliance or home system costs that you encounter.
Paige Cerulli Paige Cerulli is a freelance content writer and journalist who specializes in personal finance topics. She graduated from Westfield State University and brings more than a decade of professional writing experience to the ConsumerCoverage team. Paige’s work has appeared in outlets including USA Today, Business Insider, and more.
