Do You Need a Home Warranty?

When you’re buying a home or thinking about your next year of ownership, there’s always one question that pops up: Should you get a home warranty?

From unpredictable appliance breakdowns to major system repairs, unexpected costs can throw off your plans fast. While home warranties are advertised as a safety net, you may wonder whether these policies are truly worth the investment or just another expense you can skip.

If you’re looking at purchasing a home warranty for the first time or considering whether you should renew your existing coverage, understanding what these plans offer — and what they don’t — can help you make a decision you won’t regret.

• Home warranties can help manage repair and replacement costs for appliances and home systems
• Not every home or homeowner benefits equally from a warranty; you’ll want to evaluate your situation carefully
• Reading the fine print and understanding exclusions is crucial before you sign or renew

Before you dive into the decision, it helps to know exactly what a home warranty is. Unlike home insurance, which covers your house and belongings from events like fire or theft, a home warranty focuses on the mechanical systems and appliances in your home.

For instance, if your HVAC breaks down or your refrigerator stops working, a home warranty can help cover the cost of repair or replacement after you pay a service fee.

Most home warranty plans have a list of covered items, such as:

• Heating and cooling systems
• Electrical systems
• Plumbing systems
• Kitchen appliances (dishwasher, oven, built-in microwave, refrigerator)
• Laundry appliances (washer, dryer)
• Some plans may offer optional coverage for pools, spas, or even roof leaks

It’s important to note that there are always limits, exclusions, and caps on how much the company will pay for each item or service. Items with pre-existing conditions or improper maintenance are often not covered. This means you need to carefully review any plan to see what’s actually included.

• Major appliances like refrigerators, dishwashers, and ovens
• HVAC systems, including central air and heating
• Plumbing and electrical systems within the home’s structure
• Optional add-ons like pool or spa equipment (for an extra cost)

Buying a home is already expensive; adding a warranty might seem like just another cost. However, new homeowners are often the ones who benefit most from this coverage, especially if you’re not sure about the age or condition of appliances and systems in your new place. Not only that, but warranties are often included in negotiations.

A home warranty can offer peace of mind right after your purchase. Imagine moving in, only for the furnace to stop working in the first month. If you’re unfamiliar with the home’s repair history or worried about certain appliances breaking down, a warranty can help control costs and simplify the process.

For some buyers, a home warranty is included as part of the sale, either offered by the seller or as a negotiating point. In these cases, it’s usually a one-year plan, which gives you time to decide whether you want to renew it for future years.

• Uncertainty about the age or condition of appliances and systems
• Protection from large, unexpected repair bills just after moving in
• The convenience of dealing with one company instead of searching for repair services
• Some sellers offer a home warranty as part of the purchase to increase buyer confidence

If you’ve had a home warranty for a year, you’ll face the choice to renew. The decision isn’t always clear-cut. Some homeowners never use their warranty or find that the coverage doesn’t fit their needs. Others save hundreds or even thousands of dollars on costly repairs or replacements.

When thinking about renewal, ask yourself: Have you used your warranty in the past year? Was the service great, and did the company cover your claims as expected? What’s the current condition and age of your appliances and systems? Older systems may be more likely to break down, making the warranty more valuable.

Has the cost of your warranty increased? Compare the renewal rate to the price you paid last year. Are there any changes to the terms, service fees, or coverage limits?

It’s also smart to wise quotes from other warranty providers before you renew. This helps you determine whether you’re getting a fair price and comprehensive coverage.

• How often you’ve used your warranty and your overall satisfaction with the service
• The age and condition of your covered appliances and systems
• Updated costs, fees, and any policy changes for the next year
• Available options and competitors’ plans for better deals or broader coverage

Many first-time homeowners confuse warranties with insurance policies, but these two products serve different purposes. Home insurance protects your home from disasters like fire, storm damage, or theft, while a warranty focuses on the wear and tear of covered appliances and systems.

If your oven stops working due to old age, your home warranty might cover it. If your oven is damaged by a house fire, that’s where home insurance steps in. The two policies work together to cover different types of risks.

• Home insurance covers damage from disasters, accidents, and theft
• Home warranties focus on repairs and replacements from normal wear and tear
• Lenders require home insurance, but home warranties are optional
• The two can work together to reduce financial stress from unexpected problems

Not all home warranty plans are the same. If you’re considering signing up or renewing, there are a few crucial factors to compare:

Coverage Limits: Every warranty has dollar caps on repairs or replacements. Look for high enough limits to make the plan worthwhile.

Service Fees: Most companies charge a fee (usually $75-$150) for each service call. Check how much you’ll pay for each visit.

Exclusions: Carefully review what’s not covered. Some common exclusions include outdoor fixtures, cosmetic damage, or items not maintained to manufacturer standards.

Contractor Network: Warranties use their own network of service providers. See if local, reputable contractors are included.

Claims Process: Read reviews about how easy it is to file a claim, response times, and customer satisfaction.

• Repair and replacement coverage limits for different items
• Service call fees
• Exclusions for older items, improper maintenance, or certain parts
• Quality of the company’s contractor network
• Claims process ratings and user feedback

If you decide that a home warranty is right for you, there are some best practices to get maximum value:

Read The Contract Carefully: Know exactly what’s covered and what isn’t before you buy.

Document Maintenance: Keep records of appliance and system maintenance, as this may be required when filing a claim.

Understand The Claims Process: Familiarize yourself with how to file a claim and what information you’ll need to provide.

Compare Providers Annually: Even if you have a warranty, shop around each year to ensure you’re still getting the best coverage for your needs.

• Review your plan’s fine print and exclusions
• Keep maintenance records for appliances and systems
• Know how to file claims and response timelines
• Compare plans and rates each year before renewing

A home warranty covers repairs and replacements for major appliances and home systems due to normal wear and tear, including HVAC, electrical, plumbing, and kitchen appliances. Coverage varies, so check each plan for details.

A home warranty covers the mechanical breakdown of home systems and appliances, while home insurance protects your property from damage caused by disasters or accidents.

Yes, you can purchase a home warranty at any time, whether when buying a home, after closing, or during homeownership. However, coverage usually begins after a waiting period, and pre-existing issues may not be covered.

Some downsides include exclusions, dollar limits, required service fees, and possible denial of claims for items not properly maintained. Not every breakdown will be covered, so it’s important to understand the plan.

Choosing whether to invest in a home warranty depends on your situation, the age and condition of your home, and your comfort level with unexpected repair costs. For some, a warranty brings peace of mind and helps smooth out surprises. For others, careful budgeting or direct relationships with repair professionals might be the better path. Take your time, compare your options, and read the fine print before you sign or renew.

For expert guidance through warranties and beyond as you buy a home in Chesterfield, MO, reach out to us at Dillon Gray LeFan.

_{*Header photo courtesy by Dillon Gray LeFan}