A home warranty can be worth it if you’re living in an older home with aging systems and appliances. You probably won’t need one if you’re buying a newer home, since the appliances are likely still protected under the manufacturer’s warranties.

You can purchase a home warranty to take some of the stress out of repairing or replacing appliances and systems in your home when the time comes. Having one can also save you from paying high repair costs upfront.

As convenient as warranties can sometimes be, you still want to read the fine print of any warranty to make sure what you're buying into is truly worth it. That’s why the

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What is a home warranty?

A home warranty is a service plan that can help cover your house’s systems and appliances when they need to be repaired or replaced.

If a covered item stops working, you’ll be able to file a claim to have it serviced. You’ll typically sign up under a contract, often for a year, and pay a monthly or annual fee for your warranty.

What does a home warranty policy cover?

What a home warranty policy protects depends on the level of coverage you choose.

A typical plan might include the major systems in your home, like plumbing, electrical work, water heaters, furnaces, and HVAC systems. You can also cover specific appliances like refrigerators, stoves, washers, and dryers.

What doesn’t a home warranty policy cover?

For all a home warranty policy may cover, there’s plenty that it won’t. Commonly excluded things include:

Structural or foundational repairs

Wear and tear

Poorly-maintained items

Improperly-installed items

Mold removal

When reviewing what your warranty will cover, read the language closely and pay attention to exclusions or exceptions for which included items wouldn’t receive coverage.

MORE:

Home warranty vs. home insurance

When is a home warranty worth it?

A home warranty can offer you peace of mind if you’re buying a home with older appliances and systems. Warranties can be convenient since the repair or replacement of your item is handled for you when you file a claim.

With the right warranty from a reliable company, you can also save yourself from extra financial stress by not having to worry about upfront costs on expensive repairs.

Generally, home warranty

fees

tend to be inexpensive and can cost under $100 per month. How much it costs will also depend on the items you choose to cover and the extent of that coverage.

If you’ve purchased a newer home, you’re less likely to need a home warranty since the appliances and systems may still be covered under their own respective manufacturer’s warranties.

Certain credit cards can offer protection, too, which might eliminate your need for a home warranty.

MORE:

Can you negotiate upgrades on new construction homes?

What to watch out for with a home warranty

Home warranty service contracts can be riddled with all sorts of unexpected costs and fees, so read the fine print of a plan closely before signing on.

Some plans may have deductibles that you have to pay out of pocket first or limits on how much coverage you’ll get for a single claim.

If your home warranty includes property replacements, you might not always have a say in what that replacement item will be, and there’s a chance it might not be comparable to the model you had. Some home warranties might exclude replacements altogether.

Some companies that offer home warranties don’t offer the best service and might have long wait times to respond to your claim, eventually forcing you to take care of pressing problems yourself. Make sure to read customer reviews before choosing a company.

If the terms and conditions of your potential home warranty are making you feel wary, it’s okay to reconsider or look for another one elsewhere.

Key Takeaway A home warranty is only as good as its terms and quality of service. Before signing on for a home warranty, read the fine print, research the company carefully, and check its customer reviews.

MORE:

The pros and cons of bundling insurance

Finding affordable home insurance

Under the right circumstances, a home warranty can serve as a helpful complement to homeowners insurance. Whether you’re looking to find a home warranty or an insurance policy, it always helps to shop around.

If you’re looking for a new home insurance policy at an affordable rate, the

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With Jerry, you can quickly and easily compare competitive quotes from top insurance providers to find the right amount of coverage for you at the best price. You can even bundle your home insurance with your car insurance policy for even more savings.

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FAQs

What is a home appliance warranty?

A home warranty is a service plan that can help cover your house’s systems and appliances when they need repairs or replacements.

Are home warranties a good deal?

Home warranties might be a good deal if you’re living in an older home with older systems and used appliances. However, it doesn’t hurt to make sure you’re not already covered elsewhere first, like by existing manufacturer’s warranties or your credit card’s perks.

Read the fine print of your home warranty to make sure the coverage you’re getting is actually worth it.

Does a home warranty give the same coverage as home insurance?

Although they have a bit of overlap, home insurance and home warranties serve two very different purposes.

A home warranty is a service plan that can help you manage repairs or replacements of appliances or systems in your home.

Home insurance, on the other hand, covers your house and your belongings against loss due to a range of unexpected events, like fires, theft, or natural disasters.

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