Do You Need a Home Warranty?

Do You Need a Home Warranty?

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Yes, you need to purchase a home warranty!  No, you don’t need to purchase a home warranty!  Maybe you should purchase a home warranty!

A home warranty is an insurance policy to assist homeowners with the cost of repairing/replacing the “mechanicals” in a home or condo.

The home warranty is usually a one-year protection plan covering parts and components of your home’s electrical, plumbing, heating, and air conditioning systems as well as many other major appliances, Warranties range in annual costs of $475-$1,500 with a $100+ service call.  The cost depends on what type of coverage you need.

In the good all days before the wild housing market, most sellers automatically offered a home warranty as part of the sale.  That’s not true in today’s market.

Yes -you need to purchase a home warranty

First-time homeowner purchasing a home with existing appliances and HVAC and hot water heater?   A home warranty makes sense.  Even the best home inspectors can miss things during a home inspection and the warranty adds financial protection.  The home warranty offer owners advantage of flat-rate fees for fixes/replacements.  A flat or fixed rate limits the homeowner to pay a predetermined cost for everything.  Read the warranty details carefully.  Hopefully, your policy says you only need to pay $100 for repairs, and the warranty covers the rest of the costs- which can run from several hundred to several thousand dollars. (think new furnace and ac)

The only complaint I’ve heard about home warranty companies is about slow response time, repairing instead of replacing, and questionable quality of repair personnel.  When something breaks you contact the warranty company.  In turn, they contact local service providers who then report back to them about the issues and costs.  The process takes time to get approvals and if it’s 15 degrees outside and your furnace isn’t working- well need I say more?  On the other side of the coin getting a new furnace and ac for $100 to $200 might be worth the inconvenience.

Just remember a home warranty is not property insurance.  They don’t cover structural defects, leaky roofs, or basements.


No– you don’t need a home warranty!

An established homeowner already using a number of service people and money to pay them- no you don’t need a home warranty.

Maybe– you should buy a home warranty!

Even established homeowners run into problems.  Maybe purchasing a “fixer-upper” and you want some insurance against costly repairs or replacements. Or in the case the property you purchase had a lot of problems with the home inspection and you’re purchasing as-is.  Check the warranty policy carefully- many companies do not cover known pre-existing conditions.

Most of the local Real Estate companies have affiliations with 1 or 2 home warranty companies.  As the buyer of the warranty, you can comparison shop all the home warranty companies to find the best fit.  Your Realtor® will be happy to discuss the pros and cons with you.