Is a Home Warranty Worth It?

Is a Home Warranty Worth It?

Moving into a new home often comes with the “perk” of a home warranty policy. Usually the seller offers to provide the warranty; but if not, many buyers still elect to purchase this $300 – $700 annual policy for a bit of peace of mind in their new home.

As my husband and I are moving into a new home shortly, we’ve spent a lot of time researching the various home warranty companies and reading through online reviews.

What a mixed bag! Some reviewers are thrilled with their warranty — especially those that got a brand new furnace, refrigerator or other major appliance out of the deal.

Others are disenchanted, complaining about slow service and the warranty company’s loop-holed refusal to replace an item that is clearly beyond repair.

Journalists and bloggers have chimed in on the Is a Home Warranty Worth It? question as well. A few have had great experiences – like John and Sherry of Young House Love, who got a new furnace from their home warranty company.

But most of the articles and posts I’ve read have come down (hard) against these policies. Clark Howard, for example, says that home warranties aren’t worth the paper they’re written on.

And Angie’s List says that home warranties have the worst approval ratings of  any category on its site.

My husband and I are getting a home warranty from our sellers, so we’ll definitely have one for the first year — since it’s “on the house,” so to speak. We are still checking out companies, trying to decide which one to go with. I’ll be sure to share our experiences with you along the way — especially in the event that we need to call on our home warranty company during the first year.

For now, though, I’d love to hear from you!

What is your opinion of home warranty companies? Are they are a great potential money-saver? Or a total waste of money? Do you have a company that you’ve loved — or hated?


  1. We have one with HSA Home Warranty. In Cleveland the houses are older and big things can go soon after you move in. There is no knowing and we did not want a big surprise expense so the peace of mind is definitely worth it for us.

  2. I don’t think it’s worth it. First, most home warranty companies require you to pay $50 – $75 every time you make a service call anyway. Most fast service calls are that price or not much more anyway.

    Second, they’re loath to replace something broken quickly. They’d rather you make 5 service calls in one summer at a cost of $50/call for you (plus the inconvenience) to “fix” whatever is broken than replace it.

    You also don’t get a choice on who the repair person is. Given that you have a fee to pay every time you make a service call, I would assume that a service provider agrees to only take that fee unless the service call is particularly long or parts are necessary. Unless a service provider is contracting with a home warranty provider because of possible volume, you’re not going to get the best service providers through your home warranty.

    And if you’re not getting the best service providers with a home warranty and they do replace an item in your home, there’s a better chance that item will need additional service later than if a better-quality service provider had installed it in the first place.

  3. Totally worth it.

    We have a 25 year old house and one after another things started braking, including an oven.
    Yes we had to pay the 60.oo per service call and 50.00 a month, however, considering the amount of items that broke it was worth the money.

    No you don’t have a choice of the repair company, but we did develop an excellent relationship with them so we managed to get things fixed pretty quickly.

  4. We have had only good experiences with Broward Factory Service. I don’t think they are in OH, though, so I can’t recommend them to you.

  5. Danielle says

    We’ve had American Home Shield for a combined 10 years or so over two houses in 2 different states and we’ve been really happy with them. I found it’s definitely paid for itself over the years. Yes there are some negatives, but I believe that the positive have outweighed the negatives.

  6. Is it worth it for everyone? I don’t know. But if we hadn’t had ours, we would have had to pay thousands upon thousands of dollars to replace tour entire HVAC system (and water heater, for that matter) very soon after we bought our condo. So my take is, for a new house, it’s totally worth it. Once you have a sense of what you’ve gotten into, you may elect to get rid of it (say, after the first year.) That has worked for us, anyway.

  7. We pay for AHS (American Home Shield), which runs about $600/year for specific systems (HVAC, plumbing, electrical, appliances). Last year, our HVAC went out and we needed to replace the complete unit. We cashed out, rather than going with their suggested contractor, and received a little over $1,000. Earlier this year, our water heater gave up and had to be replaced. We received a new Rheem + install for $75, much less than the $600 more or less it would have cost us otherwise. So is it worth it? Yes. I believe so. At least until the systems currently covered are all replaced or repaired!

  8. hi – only bad experience with ours.

    we did a 5-year analysis (in a spreadsheet of course) of how much we spent on copays and on paying for the things that they don’t cover (which of course are some major parts). to be fair, they DO outline them in the contract, but actually reads that entire contract?

    Then we you need something repaired, they’ll tell you they’ll cover part of it but not all of it, and the part they don’t cover is usually the most expensive part.

    also, most of the plumbing companies and electric companies they contract with, are reallly low end.

    we used AHS.

    we stopped using them two years ago, and just pay for things to get done on our own. We’re spending much less money.

    on the other hand, our furnace or AC hasn’t need to be COMPLETELY replaced, so that would be another story.

    hope this helps.

  9. We live in a house built in the 60s but the previous owners made a fair number of updates, including the appliances and HVAC. That said, we renew our home warranty every single year. Between oven repairs, blockages, dishwasher replacement, a new sump pump and even two new toilets I know we are ahead of the game. Some years we haven’t filed a claim at all, and other years, we’ve had multiple. I plan on keeping our home warranty!

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