Home warranties promise the convenient maintenance and repair of home appliances and systems. Many homeowners, however, wonder if home warranty costs outweigh the potential benefits. The average cost of home warranty coverage is around $300–$600 per year, and an additional service fee is required whenever a homeowner submits a claim. Depending on your budget, that could be a significant expense. Are home warranties worth the cost?
A home warranty is a worthwhile investment as long as you take care to find a plan that is suited to your needs. With careful shopping, you can find a plan that will simplify your budget, save you money over time, and provide several other benefits that will improve your quality of life. Let’s explore six important benefits of home warranty coverage in greater detail.
Why a Home Warranty is Worth the Cost?
1. Savings on maintenance and repair costs
The primary benefit of a home warranty is savings on home maintenance and repairs. While home warranties entail an annual premium and occasional service fees, the total cost is often much less than what you would otherwise spend by independently maintaining and repairing appliances and systems in your home. Quality plans will even cover the replacement of an appliance that is beyond repair. If your refrigerator needs to be repaired or your oven replaced, you’re not responsible for the full cost.
2. Customizable plans that suit your needs
You can tailor your home warranty to fit the requirements of your home and lifestyle. Generic plans would leave some homeowners with gaps in coverage and others with coverage for appliances they don’t own. Respected warranty providers will allow you to adjust your plan so you have coverage where you need it. If you rent out your properties, you can even find a home warranty for Airbnb hosts or a warranty designed for multi-unit properties.
3. Guaranteed speedy repair from qualified professionals
A trustworthy warranty company will maintain a national network of licensed and insured technicians. When you submit a claim to repair or service something in your home, your warranty company can take care of arranging for a reliable technician to visit your home. This saves you the time and trouble of searching for a repair person on your own.
4. Easier budget management
A home warranty may not be free, but it’s a predictable expense. That goes a long way toward streamlining your budget. It’s easy to plan for a set monthly bill and occasional service fee. It’s not so easy to plan for surprise appliance repair, especially when repair costs can vary wildly depending on the appliance, part, or required labor.
5. Coverage that fills the gaps left by homeowner’s insurance
Some people think a home warranty isn’t worth it because they already have homeowner’s insurance. This is mistaken reasoning. A home warranty and an insurance policy are not the same, and they have different purposes. Standard homeowner’s insurance will cover damages related to disaster or theft. It will not cover appliances that break due to normal wear and tear, whereas a home warranty will. An insurance policy will not usually cover a leaky roof, but you can find a home warranty with roof coverage. Think of a home warranty and insurance policy as providing complementary coverage—one filling the gaps left by the other.
6. Increased home values
A home warranty may save you significant sums of money on repair costs, but it can also boost your financial security in other unexpected ways. On average, homes with active home warranties are valued more highly than comparable homes without them. It’s possible that the increase in home value will exceed the total annual cost of the warranty. Research shows that homes with warranties sell more quickly, too.
Do Your Research
Home warranties offer a ton of benefits, but homeowners must be judicious to ensure their investment is worthwhile. Find reputable companies that are favorably rated by consumers and unbiased organizations. Take stock of your appliances that need home warranties and those that are still covered by a manufacturer’s warranty to avoid paying for redundant coverage. With a little due diligence, you can find a home warranty that will quickly pay for itself.