When it comes to protecting your biggest investment, one of the most common questions homeowners ask is: Are home warranties worth it? The answer depends on your home's age, your budget, and how prepared you are for unexpected repairs.

This guide will help you understand when a home warranty makes sense for you, the pros and cons to consider, and how to evaluate whether coverage is the right option for you.

When is a Home Warranty Worth It?

Home warranties aren’t a one-size-fits-all contract, but there are many situations where they can be a smart choice and provide a lot of value for homeowners. Here are a few examples of when a home warranty can be worth the investment.

Your Appliances are Getting Old

Like everything else, household appliances and systems have limited lifespans. Even the best or most expensive household items don’t last forever. Over time, wear and tear take their toll, making breakdowns more likely.

If your home’s appliances and systems are aging, a home warranty can help cover repairs or replacements, keeping things running without sudden out-of-pocket repair costs.

You Don’t Have Enough Savings for Unexpected Repairs

Home repairs can be expensive and often arrive at the worst possible time. A major HVAC system breakdown could cost thousands of dollars, while a leaking pipe may require extensive plumbing work, possibly going over your emergency budget.

If your emergency fund isn’t quite ready for a broken water heater or an HVAC replacement, a home warranty can be a safety net for your budget that helps take care of covered repairs and replacements.

A repair technician writing on a clipboard after checking out a washing machine and showing the clipboard to a homeowner.

You Have Appliances That Will be Covered

Not all home warranties are created equal. Coverage varies based on the plan you choose, so it’s important to review coverage details before purchasing.

For instance, if your home has older systems and appliances, you're more likely to get value from a home warranty than someone with brand-new appliances and a new HVAC system.

Pros and Cons of a Home Warranty

Before deciding whether a home warranty is worth it, it’s important to weigh the pros and cons:

Pros of Home Warranty Coverage

Helps Cover Repair and Replacement Costs

Major fixes can be pricey. A home warranty can reduce the cost burden of sudden, expensive home repairs or replacements. Instead of paying hundreds or thousands of dollars to get broken appliances working again, you pay a service fee to the home warranty company when you request service for covered items.

Saves Time by Connecting You with Service Providers

Skip the googling and review hunting. When something breaks, you won’t have to search for a reliable contractor. With a First American home warranty, we'll connect you with prescreened professionals to get the job done.

Provides Peace of Mind

Knowing you have a plan in place for unexpected issues can bring you much-needed comfort. Whether it’s a broken oven or a faulty air conditioner, you have a plan to help manage the situation.

Includes Add-On Coverage Options

Want to cover more than the basics? Many home warranty plans offer add-on coverage for items like pool and spa equipment, well pumps, and more, allowing you to tailor coverage to your home’s unique features.

Cons of Home Warranty Coverage

Not Everything is Covered

Each plan has coverage exclusions and limitations. It’s important to understand what’s included — and what’s not — so you’re not caught off guard if a claim is denied.

Service Fees Apply for Each Repair

Even with a warranty, you’ll typically pay a service fee when you file a claim. It’s still far less than the cost of most repairs, but it’s a cost to factor in when considering a home warranty.

You Don’t Get to Choose Your Repair Technician

As a home warranty company, we assign a technician from our vast list of prescreened, qualified contractors. This will limit your ability to work with a preferred contractor of your choice.

Maintenance Still Matters

Part of homeownership is the expectation of maintaining appliances and systems properly to give them the longest life possible. Issues caused by improper maintenance and known or visible pre-existing conditions are typically not covered.*

A handyman with a clipboard performing maintenance on a kitchen sink.

5 Factors to Consider When Getting a Home Warranty

A little research goes a long way. Here are some factors to keep in mind when deciding if a home warranty fits your needs.

1. Coverage Options

Different plans offer different levels of protection. You can opt for a plan that covers appliances like refrigerators, dishwashers, and washing machines, as well as major systems like HVAC, electrical, and plumbing. Make sure your most essential items are protected by reviewing the coverage details and selecting the plan that’s right for you.

2. Cost of the Plan

Home warranty pricing varies based on coverage level, provider, and the size of your home. Consider both the annual premium and service fees when comparing your options. While there’s an upfront cost, a good home warranty may save you significantly on home repairs down the line. Use our tool to compare plans.

3. Service Fees and Limitations

When you request a repair claim under a First American home warranty, you will pay an upfront service fee. Additionally, most plans have appliance coverage limitations on how much is paid per item or per year. Be sure to read the fine print to know what to expect when you make a service request.

Understanding these terms helps you avoid confusion when you need help.

4. Contract Terms and Exclusions

Each home warranty has a set of contract terms, including what’s covered, any exclusions, and limits for repairs or replacements. Be aware of pre-existing conditions or improper maintenance exclusions, and always review your plan’s limitations.

Look closely at what’s covered (and what’s not), and don’t hesitate to ask questions before enrolling to curb misunderstandings.

5. Your Home’s Age and Condition

If your home is brand new, the appliances and systems may still be covered by manufacturer warranties. However, once those expire, a home warranty can offer a solution to continue repair and replacement protection.

An older home, on the other hand, often benefits even more from having a warranty in place due to an increased risk of wear and tear on older items.

A young woman shaking hands with a repair technician.

Is a Home Warranty Right for You?

Whether or not a home warranty is worth it depends on the condition of your appliances and systems, your financial situation, and your risk tolerance for unexpected repairs. If you value convenience, want help managing unforeseen repair costs, or own older appliances and systems, a home warranty could be a smart move to bring you the peace of mind you deserve.

Still deciding? Get a free home warranty quote from First American Home Warranty today and explore your options risk-free.

FAQs: Are Home Warranty Plans Worth It?

How much do home warranties cost?

Plans typically range from $300 to $700 annually, depending on coverage level and home size. Most plans also charge a service fee of $85 to $125 per repair visit.

Who else can pay for a home warranty?

In some cases, sellers, real estate agents, or even family members may purchase a warranty on your behalf as part of a real estate transaction or gift.

What does a home warranty not cover?

Home warranties don’t cover cosmetic damage, items under manufacturer warranties, or issues due to lack of maintenance or improper installation.

*Please review the sample contract for specific coverage, terms, and limitations.