Things to Consider Before Buying a Home Warranty

Home warranties can be valuable for new homeowners who may not have the funds to repair or replace a broken item. But buyers should carefully review a plan’s service contract before purchasing one.

Start by reviewing company websites and reading sample contracts to compare coverage limits, exclusions, and cost. Also, read customer reviews and check the website of your state attorney general.


A home warranty can be a good investment when the manufacturer’s warranties on appliances and systems expire or if you are selling your house. Before you buy a home warranty, determine your coverage needs and compare pricing quotes from providers, including their terms of service and exclusions.

Home warranty companies usually charge a monthly or yearly premium, and some offer additional coverage options as add-ons. These extra costs can increase the price of your plan, so be sure to factor them in when comparing prices.

Some home warranty companies also charge a service call fee when you need to make a repair, ranging from different prices. Be sure to read sample contracts and compare service fees, coverage terms and customer reviews. Many companies have different contract lengths, but an annual plan tends to be more cost-effective per month than a month-to-month option. It is also important to review the fine print of the contract carefully to avoid hidden fees or surprises.


Before deciding to buy a home warranty, consumers should carefully examine the companies and plans. It’s also important to read sample contracts and to find out what exactly is covered, the monthly costs, coverage limits and how claims and cancellations are handled.

Consumers who are considering a home warranty should also determine whether the appliances and systems in their homes are already under warranty, especially manufacturer warranties or builder warranties. They should also consider whether they want to transfer the warranty to a new homeowner if they decide to sell their property.

Once they’ve figured out their coverage needs, consumers should request quotes from several companies. It’s important to compare prices, coverage limits and customer reviews before making a decision. Many companies post their contracts online, so it’s easy to review them before making a purchase. Those who want additional peace of mind can opt to include an additional rider in their policy that covers the cost of repairs to items not covered by the original warranty.


Home warranties come with their own set of limitations and exclusions. For buyers and sellers who are considering this option, it’s essential to read the fine print carefully to ensure that a plan is a good fit for your needs.

For example, a company’s contract may exclude coverage for specific items like the garage door or a washer and dryer. It may also limit the amount of money it will pay for repairs or replacements within a certain timeframe. Moreover, many companies require a deductible and only cover up to a specific percentage of the total cost of an item.

Buyers should also take the time to compare quotes and service call fees. This can help avoid any surprise expenses down the road. And if the costs outweigh the peace of mind that a warranty can offer, it might be best to skip this option and instead focus on building an emergency fund.

Customer Service

Many home warranty providers offer a sample contract that can give you an idea of what their policies include and exclude. Some also have customer reviews and accreditation status posted on their websites.

Before you decide on a home warranty, make a list of the appliances and systems in your home that you think should be covered. Then compare yearly premiums, coverage limits, service call fees and other important details to find the best option for you. If you can answer, how does a home warranty work? Then you will be better prepared when signing up for a plan.

A home warranty may not be right for every homeowner, but it can be a good option for people who want to have peace of mind and those that cannot afford to pay for unplanned repair costs. Just be sure to do your research and choose a reputable provider that offers comprehensive coverage, uses reputable contractors and provides transparent communication throughout the process. Also, keep in mind that a home warranty is not a substitute for routine maintenance and that most companies won’t cover components that have been subject to misuse or poor maintenance.