When Should You Buy a Home Warranty?

Has the question, "Should I get a home warranty?" been weighing on your mind? If you've been thinking about purchasing a home warranty plan, there’s a lot to consider, such as whether you want to add home warranty coverage to help protect your budget on a current home or if you plan to buy or sell a home shortly. To guide your decision, we’ve put together these nine questions. Your answers can help you determine whether a home warranty is a worthwhile investment for you:

1. How Would My Home Warranty Work?

When you purchase a home warranty, you get a year-long service contract that helps you manage the cost of repairing or replacing many essential appliances and systems in your home when they break down due to normal wear and tear. Plans can cover systems such as plumbing, electrical, heating, and air conditioning, as well as many major kitchen and household appliances you use every day.

With a First American home warranty for new homeowners, getting help when a covered item breaks is easy:

1. Submit a service request either online or via phone.
2. We’ll assign a prescreened service provider to diagnose the issue, confirm coverage, and repair the covered item.
3. If it can’t be repaired, we’ll replace it.*

Home warranty coverage can help you save money on expensive repairs and replacements and provide a convenient path to getting help. If you have aging appliances and systems, and don’t want the hassle of finding technicians on your own, a home warranty can be especially valuable.

Even if you’ve owned your home for a while, you’ll still benefit from a home warranty. Home appliances and systems will inevitably break, and coverage provides a convenient repair/replacement solution that can help protect your budget and give you peace of mind.

See what First American home warranty plans cover for existing homeowners and get a free quote for coverage for your area.

2. Do I Need a Home Warranty if I Have Homeowners Insurance?

Many people purchase a home warranty to complement their homeowners insurance because they cover different things:

• Homeowners insurance covers the structure of your home and your belongings against damage from fires, storms, and other natural disasters, as well as from vandalism and other major events.
• Home warranties cover your household appliances and systems when they inevitably break.

Think of it this way: Homeowners insurance handles the big stuff, and home warranties handle the everyday stuff. Together, they offer a well-rounded home protection plan that safeguards your budget and provides peace of mind.

3. Could I Afford to Pay an Expensive Repair or Replacement Bill?

Some experts now suggest you should budget $1 or more per square foot of your home each year to pay for home repairs and replacements. But with costs always rising, you may need to budget up to $3 per sq ft, especially for larger homes.

Others suggest saving 1% to 3% of your home’s cost (or value) in a yearly home maintenance fund. While it’s a great idea to set aside money for repair and replacement expenses, putting aside thousands of dollars each year may not be feasible for many people.

With a First American home warranty, you can rest easy knowing your budget is protected if a covered appliance or system breaks. Potential savings could add up to hundreds or thousands of dollars per year, depending on how many claims you submit. What’s more, you’ll save time and effort by not having to find help on your own. 

4. Is My Home Aging?

If your home has aging appliances and systems, you may have even more reason to consider a home warranty. These household items aren’t built to last forever, and you don’t know how well previous owners maintained them.

How long can you expect your home systems and appliances to keep running? It depends, as reliability and longevity vary from brand to brand, but home warranty coverage provides reassurance that when your older appliances and systems fail, you’ll have a reliable, budget-friendly solution already in place.

See the types of homes First American Home Warranty covers and learn more about how our coverage can help protect your budget.

5. Am I Planning to Sell My Home?

When you list your home on the market, your agent can order seller’s home warranty coverage for you. This coverage offers important benefits and can add value to your listing by:

• Helping to safeguard your budget if covered appliances or systems break during the listing period
• Providing a way for your listing to stand out from the competition
• Giving potential buyers more confidence in purchasing your home
• Helping to prevent the sale from being derailed or postponed if covered items break during the transaction
• Offering protection from post-closing disputes

Once your home sells, your buyers can continue the home warranty coverage on their own, adding any upgrades and/or options they like. This gives them budget protection during the first year of homeownership, and they can renew their coverage annually.

6. Am I Buying a Home Soon?

New home buyers often wonder, “Should I get a home warranty?” The truth is, buying a home can leave your budget a bit strained for at least the first year. A home warranty for new homeowners is a smart way to help manage your finances by helping to protect you from costly repairs or replacements of covered household items that break from normal wear and tear. Plus, you won’t have to spend time finding help on your own.

If you’re already working with a real estate agent, ask about adding a real estate home warranty to your home purchase. If you’ve bought a home recently, your agent can order the home warranty plan you choose for you up to 60 days after your closing date.

Note: If you’re buying or selling a home, there are special plans designed to cover homes in real estate transactions. See sample coverage for real estate home warranty plans or ask your real estate agent for pricing and details.

7. What Would My Home Warranty Cover?

When shopping for a home warranty, take inventory of the household appliances and systems you have. Check companies and different plans, and learn how the service process works.

Many plans cover household items like dishwashers, stoves, refrigerators, washers and dryers, plus electrical, plumbing, and HVAC systems. First American home warranty plans also offer optional coverage for items such as pools/spas, luxury appliances, and more, as well as several upgrades. See the table below for a comprehensive list of items we cover:

What First American Home Warranties Cover

Appliances Kitchen Refrigerator Washer & Dryer Oven Range & Cooktop Dishwasher Built-in Microwave Trash Compactor

HVAC Systems Central Air Conditioning Heating System Ductwork Thermostats

Plumbing Systems Stoppages Leaks and Breaks Garbage Disposal Water Heaters Toilet Tanks & Bowls Sump Pump

More Systems Electrical System Central Vacuum Ceiling, Attic & Exhaust Fans Garage Door Openers Pool & Spa Equipment Well Pumps

8. Is a Home Warranty Worth It?

Why buy a home warranty? When determining whether a home warranty makes sense for you, it’s helpful to know the lifespans of home appliances and systems, as well as the costs to repair or replace them. See how a First American home warranty can help protect your budget.

Of course, home warranty costs depend on several factors, including where you live, the number and types of items covered, and any extra coverage upgrades and options you purchase with your plan. First American Home Warranty offers a range of plans to fit every home and budget.

For many homeowners, the budget protection, convenience, and peace of mind that home warranties offer is priceless. They rest easy knowing that whenever a covered appliance or system suddenly fails, a quick service request via phone or online is all it takes to begin the repair/replacement process.

Get a free First American home warranty quote to view the coverage available in your area.

9. Will My Home Warranty Cover Everything?

A home warranty can protect your budget when essential home appliances and systems break due to normal wear and tear. But they don’t cover everything. For example, home warranties don’t cover:

• Items that are already broken
• Cosmetic damage
• Misuse, neglect, or improper installation

It’s always a good idea to read the fine print when evaluating home warranty contracts. Learn what’s covered, what’s not covered, and the plan’s coverage limits (how much the home warranty company will pay for certain repairs).

Related: Learn more about First American home warranty plan coverage limits.

Find the Home Warranty That’s Right for You

If you want to protect your budget when essential home appliances and systems break due to normal wear and tear a home warranty could be a good choice for you. It can simplify the repair and replacement process and save you the time and effort of finding help on your own.

Learn more about the benefits our comprehensive coverage provides and get a quick, no-obligation quote today.

FAQs About Buying a Home Warranty

Should I buy a home warranty if I'm a first-time home buyer?

Home warranty for new homeowners is a smart way to manage your finances in your first few years of homeownership. It offers budget protection and peace of mind when covered home appliances and systems break due to normal wear and tear. Get answers to common home warranty questions and learn more about coverage and benefits.

Do I need a home warranty if I already have homeowners insurance?

Home warranties and homeowners insurance cover different types of risks, so one doesn’t replace the other. A home warranty covers everyday breakdowns, such as when your dishwasher breaks, whereas homeowners insurance covers major events like floods, fires, and theft. Homeowners often have both types of coverage as part of their home protection plan.

Does a home warranty cover plumbing?

Home warranties can cover systems including plumbing, electrical, and HVAC. They provide a convenient way to get your home systems repaired or even replaced when they stop working properly. Coverage can help reduce stress and costs associated with unexpected breakdowns.

When is the best time to purchase a home warranty?  

When should you buy a home warranty? It depends on whether you’re a home buyer, seller, or current homeowner. Buyers can ask their agents to include home warranty coverage in their home purchase so they’re covered on day 1 of homeownership. Agents can order the seller’s home warranty coverage as soon as a home is listed on the market. Existing homeowners can purchase a home warranty at any time to help manage their budgets.

*In some instances, Homeowner and First American may agree to payment of cash in lieu of repair or replacement. Payment will be made based on First American’s negotiated rates with its suppliers, which may be less than retail. Please review the sample contract for specific coverage, terms, and limitations.