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Pros and Cons of a Home Warranty

A home warranty can be a part of the real estate deal for first-time homeowners. Imagine what it’s like for a new homeowner: you are about to close on a home you love and are inexperienced with repairs that go along with owning a home. A home warranty can sound pretty enticing.

As time goes on, you have the option to pay for a home warranty each year. So let’s break down the details of a home warranty. How is it different from homeowner’s insurance? And is it worth it to pay for a home warranty each year?

What Is a Home Warranty?

A home warranty is different from home insurance. While home insurance is in place for damage or losses from extreme weather, fire, flooding, or burglary, a home warranty covers the appliances and products inside your home that may fail due to normal wear and tear.

Every home warranty is different and can cost a few thousand dollars per year. You will find warranties covering appliances, HVAC systems and parts, and plumbing. The policies all have their own stipulations ranging from coverage limits to various fees each time a worker gets called to your home.

So what are the pros and cons of home warranties?

Pros of a Home Warranty

For those who are new to owning a home, repairs and maintenance can be unfamiliar. It may be helpful to have someone to call when something goes wrong with your washing machine or refrigerator.

Take a look at the advantages of a home warranty:

  • Replacement of an Old System: If you have a home warranty during the year that your HVAC system fails, then you get a massive bang for your buck. Look for a warranty that will handle repairs and full appliance replacements.

  • Minimal Fees for Repair: Sometimes, it can cost an arm and a leg to repair a dryer or a dishwasher. You pay a flat fee for the repair call when you have a home warranty, and the warranty takes care of the rest.

  • Budgetary Benefits: You can put away your home repair money into the home warranty, and then that money will remain untouched and cover your home repair costs throughout the year. It can be an excellent budgeting strategy.

A home warranty is an excellent option if it brings you comfort to call on a professional to help you with your broken-down appliances. You can quickly solve the problem, knowing you’ve already paid the money upfront to cover any mishaps throughout the year.

Cons of a Home Warranty

On the flip side, a home warranty is not the end-all solution to repairs during homeownership. Home warranties come with stipulations and fine print that may not include your faulty air conditioning system. The worst scenario is paying for repairs on top of the home warranty annual fee.

Here are some cons to a home warranty:

  • Limitations: Some home warranties will not replace outdated parts or cover repairs that have not been appropriately maintained.

  • Hiring Partnered Contractors: You cannot call any contractor to help when you have a home warranty. Instead, you have to go through the home warranty company to find a maintenance specialist who partners with their company.

  • Nothing Breaks: You may pay thousands of dollars for your home warranty, and not one thing in your house breaks during a full calendar year. You won’t get the money back.

When you pay for a home warranty, you want to get your money’s worth. But that may not always be the case.

The Final Decision

So many factors go into whether a home warranty would benefit you. For example, if you are moving into a new home with all new appliances, a home warranty may not be necessary. On the other hand, if the house is older, you may look into the limits and find a warranty that would cover the systems that are likely to need replacing in the next few years.

Whichever you decide, it is nice to have a home warranty as an option. Weigh the pros and cons to decide if now is the time to invest in a home warranty.


For more tips, check out these related blog posts:

Questions about real estate?

Do you have questions about the real estate market or the market changes in your region? We are standing by to help and answer any questions that you have. If you are unsure if it is the right time to sell or buy, you can seek help from experts who know the market. Our advisors will advise you on the right move for your family’s situation. If you are on a time crunch, you can seek counsel on how to best navigate the sale of your home during a buyer’s or seller’s market.

At Blondin Real Estate, we are always here to help; contact us!

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