Katie OrmsbyHome Warranty Expert

Katie enjoys helping readers make sense of Home Warranty options. She's previously written business and shopping features for The Seattle Times and Seattle Met magazine. She has a degree in journalism and political science from the University of Washington.

How Home Warranties Work

Buying a home is a huge event. It’s one of the biggest investments you’ll make in your life – and your new home becomes the most important place for you and your family. But there’s something many people don’t realize about buying a new home. Not only is it expensive to actually make the purchase, but it’s also very expensive to be a homeowner.

When you buy a home, you wipe out your savings and put everything into your new property. But often, before you can rebuild any savings, you’ll find yourself paying for unexpected expenses. These surprise costs of homeownership, like a broken heater or a leaky roof, can leave you frustrated and in serious financial trouble.

Fortunately, you can protect yourself and your bank account as a new homeowner. You just need a home warranty. But what’s the best home warranty company for your needs? Let’s take a closer look to help you decide.

What Is a Home Warranty?

A home warranty is, simply put, a warranty for your house.

Many people don’t realize that you can purchase a warranty for your home – but it’s just like any other huge, important purchase. Like a car or an appliance, you can easily secure a warranty for a home that protects it in the event of any problems or necessary repairs.

And home warranty programs work just like any other kind of warranty. If aspects or systems of your home are breaking down, your warranty can help you fix them, without paying expensive out-of-pocket costs.

Why Do You Need a Home Warranty?

Both new and existing homeowners can benefit from a home warranty. But if you’re wondering why a home warranty would even be something you’d need, you aren’t alone.

Many homeowners think a warranty is something extra to pay for. And, if you never run into problems with your home, its appliances, and its systems, it won’t be used.

But if you do have problems, you’ll be very glad you have a home warranty. A single repair, like a broken dishwasher or faulty dryer, could cost you hundreds of dollars. And if the damage or problem is more serious – like a leaky roof – fixing it could total thousands.

With a home warranty, you don’t need to worry about unexpected problems appearing. Your warranty plan will protect your home. And you won’t need to pay for these sudden disasters no matter how quickly they need to be fixed.

What Does a Home Warranty Cover?

Home warranties typically cover the major systems and appliances in your home. This means that all of the components that keep your home protected from damage and functioning properly are included.

Most home warranties include coverage for the following:

So, if a home appliance or home system breaks, a home warranty can help with the repairs.

How Are Home Warranties and Homeowners Insurance Different?

A home warranty and a home insurance policy cover different types of home repairs. While home warranties protect against wear and tear of appliances and systems, home insurance policies protect against theft and structural damage related to disasters.

So, when it comes down to it, you can get double protection simply by getting both.

How Much Does a Home Warranty Cost?

Home warranties are surprisingly affordable. On average, a home warranty only costs a few hundred dollars.

Most homeowners pay for their home warranties when closing on their house. You, your real estate agent, or even another family member can buy a home warranty for your home.

You can purchase a home warranty when you buy a new home. Or, if you’re an existing homeowner – or simply want to wait to buy a warranty – you can also buy a warranty at a later date. As soon as your policy is paid for, your protection begins.

When you need to use your warranty in the event of repairs, you’ll often need to pay a deductible or service fee. These costs are typically very affordable – often just $50 or $100.

Imagine paying just $100 for electrical or heating repairs. You could save significant money in the long run with a cheap home warranty, allowing you to save rather than spend.

Are Home Warranties Worth It?

Both homebuyers and homeowners should consider home warranty plans. There are many different home warranty providers and options available – and you can easily find them online.

Compare home warranty companies to find the right protection plan for your needs. In order to find the best option, consider what each home warranty provider offers. Home warranty reviews and our comparison chart are good places to start. As you consider top home warranty companies like American Home Shield and First American Home Warranty, ask yourself a few questions:

You’ll also want to check that the company operates where you live. For instance, if you live in California, you’ll want to make sure it’s available there. The same goes for Arizona, Florida, Georgia, and every state.

Once you’ve compared our list of top-rated home warranty services, you’ll be ready to pick the right option. Then, enjoy peace of mind and great protection.