Are Home Warranties Worth It?

A home warranty offers protection against wear and tear on your home’s appliances and systems. What each policy covers will vary depending on your chosen company, but think HVAC, plumbing and electrical appliances that fail after years of wear and tear, like a washing machine that suddenly won’t drain or a furnace that won’t kick on in the winter. You’ll pay a monthly premium to stay enrolled in the plan and pay a service fee each time a professional is dispatched to repair.

It’s important to distinguish a home warranty policy from a home insurance policy. Homeowner’s insurance protects your home’s structure and personal belongings from extensive damage from certain covered incidents such as a fire or natural disaster, or if someone gets hurt on your property. If you have a mortgage, the bank you’ve borrowed money from will likely require you to hold homeowner’s insurance.

On the other hand, home warranties are optional and cover the systems that keep your home running rather than protecting its value. These policies are designed to cover wear and tear, not incidents that cause damage.

Home warranty coverage depends on which company you buy your policy from. Some plans will focus on appliances, some systems and some a combination of both. Some commonly covered items include:

• Kitchen appliances like a stove, oven, dishwasher or garbage disposal
• Laundry appliances
• Plumbing systems
• Electrical systems

If you’re closing on a new property, you’ll sometimes find the seller will provide a home warranty policy for at least a year as part of the purchase contract. But if you can shop around, the best way to find out what a home warranty will cover is to research and get quotes for different plans. Be sure to ask companies questions to get further clarity on what is covered.

While the specifics depend on your policy, a typical home warranty plan generally excludes a few things.

• Structural problems related to your foundation, walls, paint or flooring
• Repairs to any commercial-grade equipment or systems
• Issues with rust, corrosion and sediment
• Pest damage
• Pre-existing problems, like an appliance that was already broken when you bought your home
• Asbestos detection and removal
• Radon gas remediation
• Mold removal
• Issues related to building or zoning code violations

Remember that some of these may occasionally be covered by a certain home warranty plan and what your particular plan covers and any limitations will vary.

This depends on your financial priorities and needs. A home warranty can be great peace of mind if you’re concerned about upfront repair or replacement costs. For example, a broken fridge typically costs about $250 to fix, while refrigerator replacement can climb to $2,000. If these issues are caused by general wear and tear, home warranty policies can help you avoid paying for a pricey repair on the spot. It also offers convenience, since it may save you from having to research home professionals or fix it yourself.

Pros of a Home Warranty

Here’s a look at some of the upsides of a home warranty.

• Cost savings: Utilizing your home warranty for several otherwise pricey repairs can save money in the long run.
• Customizable coverage: You can choose a plan based on the types of appliances in your home’s systems.
• Straightforward repair process: You won’t have to seek out a specialized repairperson—if it’s a covered repair, you can typically reach out to your home warranty company to submit a claim in the same way no matter the issue, from plumbing to electrical.
• Avoid DIY: If you’re not handy, home warranties can be handy.

For all of the peace of mind they can provide, home warranties have drawbacks. Many have coverage cost limits, and ultimately, the company has the final say over what it will pay for—and your repair needs may not qualify. While many policies assign a contractor to the job, so you don’t have to shop around for one, you won’t typically have a choice of service professional. You’ll need to check the fine print to find out if you have your choice of technician.

However, the real question when evaluating whether a home warranty is worth it is risk and reward. How much money does a home warranty save you—and how likely are you to use it?

In a survey of 1,000 homeowners, Forbes Home found that 64% needed between two and three home repairs yearly. In that same survey, 45% of homeowners felt their typical savings with a home warranty ranged between $201 and $400 per repair. Only 2.2% felt their home warranty saved them more than $1,000 on a single fix. If you’re paying the typical $685 a year for a policy, this may or may not be worth it.

Cons of a Home Warranty

Here’s a look at some of the downsides of a home warranty.

• Less control over contractor quality: Home warranty companies typically assign a service pro to your job, meaning you can’t choose or vet them.
• Fine print and coverage limits: Some repairs may not be covered and others may be too expensive to cover fully.
• You may not need to use it: If nothing comes up, it can be a good thing, but you’ll have paid for the policy without using it.

When you’re shopping for the best home warranty company, here are a few factors to consider to make the best choice. Is the company new or established? What do people say online about it? Will you pay for coverage every month, or will you need to pay a lump sum each year?

Be sure to vet the following:

• Plans and coverage
• Years in business
• Customer reviews
• Monthly or yearly service fees
• Available add-on coverage

If you need help comparing policies and providers, we analyzed over 50 plans from 19 companies. We reviewed price quotes and customer sentiment and detailed each company’s policies. Explore the best home warranty companies of 2025.