Are Home Warranties Worth It?
If you have homeowners insurance on your home and manufacturers warranties on its appliances, you may be asking yourself, “Is a home warranty worth it?” After all, you don’t want to pay for something you don’t need. However, home warranty coverage extends to damage that other insurance doesn’t cover. If a covered appliance or system in your home breaks down because of normal wear and tear damage, only a home warranty will cover the cost of fixing it.
Here, we’ll cover what home warranties are and why we think they’re worth the price. Then we’ll look at how to choose the best home warranty for you and give our reasons for recommending a Choice Home Warranty for your home*.
What Is a Home Warranty?
A home warranty is essentially a residential service contract. For the length of the contract, if a covered appliance or system or one of its parts wears out, the provider will send a contractor to perform covered repairs. Often, if something cannot be repaired, the provider will replace it.*** Some home warranty companies allow you to choose your own contractor, but others will send someone from a vetted list of approved technicians.
It’s important to remember that home warranties don’t cover all types of damage to covered items. Damage from accidents or natural disasters does not fall under a home warranty. Most pre-existing conditions, whether you knew about them or not, are also not covered. However, if the appliance or system has been properly maintained over time and fails due to wear and tear from normal use, repairs or replacements are usually covered, no matter how old it is.***
What Does a Home Warranty Cost?
The cost of a home warranty depends on a few factors, most notably the state you live in, the size of your home, and the amount of coverage you want. As you might imagine, the more appliances and systems you want covered, the more expensive the contract generally will be.
There are two parts to any home warranty costs: the premium and the service call fee. The premium is what you pay for the duration of the contract, whether you make any claims on the warranty or not. Some companies charge this premium monthly, and others charge yearly. Broadly speaking, home warranty premiums range between about $25 and $60 a month.
Many companies offer add-ons to their basic home warranty plans. If you sign up for one of these plans, you can also purchase additional coverage for items that not every home has, like pools, spas, well pumps, and more. These add-ons are priced individually and will be added to your premium costs.
The service call fee, also called the deductible, is paid separately. Every time you ask the home warranty provider to send a contractor to your home to diagnose a problem or provide covered repairs, you’ll pay this fee directly to the contractor. A single issue may require several visits, which will require several service call fees. However, a single technician may be able to look at several issues in one visit if, for instance, they are both plumbing problems.
Service call fees vary from company to company but usually range from $75 to $125. Some providers offer the possibility of adjusting your deductible relative to your premium. That is, you may choose to pay a higher service fee in exchange for a lower premium and vice versa. If you anticipate using your home warranty frequently, you might benefit from a lower deductible and a higher premium.
Are Home Warranties Worth the Money?
We think a home warranty is worth it. While a residential service contract won’t cover every possible situation, it does provide peace of mind to homeowners. Fixing major home appliances and systems can be incredibly costly, running in the thousands of dollars for items like refrigerators and air conditioning systems. Not everyone has that kind of money at a moment’s notice. If, for example, your water heater stops working in the middle of winter and you have a home warranty, you won’t need to worry about delaying covered repairs until you can afford the lump sum.
According to HomeAdvisor, the average cost of home maintenance in 2018 was $1,105. Replacing or repairing a problem came in as the number one cause of home improvement spending. About one in three homeowners reported needing to make an emergency repair with an average cost of $1,206.
Home buyers and sellers in particular tend to benefit from home warranties. Sellers will know that if something goes wrong while their house is listed, they won’t have to pour a great deal of money into items they’re about to sell. Buyers will know that they won’t be on the hook if something in their new home wears out. In fact, including a home warranty for the first year of new ownership often makes a house a more attractive prospect on the market.
How to Choose a Home Warranty
The first consideration, of course, is whether the home warranty company offers contracts to homes in your area. Many nationwide providers don’t actually sell warranties in all states, so double-check that your state or even your city are covered.
Secondly, you want to make sure that the contract you’re purchasing covers the specific appliances and systems you need. Some plans omit more expensive items like refrigerators, washers, dryers and air conditioners. Others won’t cover specific instances of problems—for example, plumbing in general might be covered, but plumbing stoppages aren’t. Always read the fine print of a contract before signing so you know exactly what you’re getting.
There are plenty of other considerations when choosing a home warranty, and you’ll need to decide which are priorities for you. Here are a few things to consider.
- How high of a premium will fit into your monthly budget?
- How important is customer service when dealing with company employees?
- Do you want to choose your own contractor or have one selected for you?
- How long do you want the company to guarantee its contractors’ repairs?
Is a Home Warranty Worth It for Older Systems and Appliances?
Most home warranty providers set no age limit on the items they’ll cover. That is, they’ll cover the appliance or system no matter how old it is or how old your home in general is. Often, though, there is a requirement that the item has been properly maintained and is in working condition at the time of the contract.
For example, for repairs on your dishwasher to be covered, you will need to flush the drain lines and clean away any mold or mildew periodically. If an item breaks because the homeowner hasn’t taken basic steps to keep it working, it usually won’t be covered.
Benefits of Choice Home Warranty
A leader in the home warranty industry for the past 11 years, Choice Home Warranty offers its residential service contracts to homeowners nearly nationwide. Only California, Oklahoma, and Washington are excluded. Choice Home Warranty offers top-notch, 24/7 customer service for its customers, as well as quick turnaround times on claims and requests. All of its technicians’ repairs are guaranteed for 90 days, three times longer than most home warranty companies.
Choice Home Warranty provides two plans: a Basic Plan that covers most home appliances and systems, and a Total Plan that includes a few of the more expensive-to-repair items. The full list of coverage for each plan is below.
|Basic Plan||Total Plan|
|Air Conditioning System||✓|
|Garage Door Opener||✓||✓|
|Ceiling and Exhaust Fans||✓||✓|
With either of these plans, you can also purchase add-on coverage for the following items.
- Well/sump pump
- Central vacuum
- Limited roof leaks
- Septic system
- Second refrigerator
- Standalone freezer
- Septic tank pumping
Choice Home Warranty’s prices are well within the budget of most homeowners. Service fees fall on the lower end of what is typical for the industry, and if you choose to pay your premium annually, Choice Home Warranty will give you the first month of coverage for free. It may be the cheapest home warranty available in your area.
Frequently Asked Questions
Choice Home Warranty offers excellent customer service and value for the money you’ll pay. Even the Basic Plan covers plumbing stoppages, and you’ll have the opportunity to add coverage for items like roof leaks and septic systems that many other companies don’t cover. For a free, personalized quote, fill out this online form or call 732-907-4902.
Who should buy a home warranty?
Any homeowner can benefit from the peace of mind provided by a home warranty. However, home buyers and sellers often comprise the largest market for home warranties. People involved in real estate transactions often find home warranties the most helpful.
How long does a home warranty last?
Typically, home warranties last for 12 months. However, some companies will throw in an extra month or offer multiple-year contracts. Some will even give you a discount on the premium if you sign up for longer than a year at a time.
Does a home warranty cover plumbing issues?
It depends on the issue. Most home warranties offer some coverage for plumbing systems; however, you’ll always want to read the fine print closely to ensure that your home warranty provides the coverage you need. For example, some residential service contracts cover plumbing systems in general but not plumbing stoppages.
*Click here to view complete limits of liability and any exclusions. CHW offers service contracts, which are not warranties.
***CHW reserves the right to offer cash back in lieu of repair or replacement in the amount of CHW’s actual cost (which at times may be less than retail) to repair or replace any covered system, component or appliance.