To Buy or Not to Buy a Home Warranty?

About 50 years ago, the real estate market was booming, and everyone was eager to buy their own property. Having a home for yourself or leasing it became the new rich, and its assets were priceless. People were concerned about securing their expensive appliances. What if something broke, and they didn’t have the budget for the moment to repair it? What if it wasn’t fixed in time?  Maintained appliances turn home into a comfortable place to stay, and no one likes waiting days to get them fixed. They wanted it to be fixed at the moment! And so it did. American Home Shield was the first company to provide home warranties, and from it, a new market emerged, but how does the US home warranty market currently work? 

Short reviews of the top market’s providers

Homeowners who purchase home warranties benefit by having their home systems and appliances repaired at a fixed price, regardless of the cost of the damage. However, as in any other industry, doubts about the effectiveness of home warranties lurk over it. Homeowners who paid for a home warranty but never used it are mad for not having the option to get their money back. Others are grateful for being able to afford expensive repairs and replacements. Today we bring more details on home warranties, but before discussing what it’s like having and not having a home warranty, let’s first discuss how it works.

How Does the Home Warranty Work? 

How home warranty works can be explained shortly like this: Homeowners select a company that provides affordable rates and covers most of their items and home systems. Their annual plans give customers the right to call the company whenever an appliance breaks down. Then, the company finds available contractors to visit the household and repair or replace the broken item. Even though it’s not only about appliances (dishwashers, refrigerators, dryers, etc.), but also home systems such as air conditioning, water heating, and plumbing systems, the contractor might repair based on the scale of damage or replace it.  In either case, the homeowners pay a service call fee each time the repairman visits, which is within a fixed range depending on the appliance or system type. Such fees range from $50 to $100 and save you hundreds on expensive repairs. 

What’s Like Not Having a Home Warranty?

Life in the 21st century walks at a fast pace. Always with something at hand, we talk fast, walk fast, and change our clothes often. Picture an average day in a working family. All family members return from work or school and throw their clothes in the washing machine.  Imagine if the washing machine and clothes dryer stop working for a day? You were grouping clothes by color, weight, and style and throwing them into the washing machine in under a few minutes. Then, you went about your busy day.  Now, it would take you hours to gather all your laundry, fabric softener, detergent, and other products and send them to the laundromat. Then, it means waiting for the washer to finish its cycle and then the drying process. Simply commuting would take hours from your day.  Let’s say that your job pays at least $15/hour. Spending two to three hours for the entire process of washing the clothes at a laundromat means losing $30-$45 from your day.  

With Home Warranty

On the other hand, imagine your washing machine breaking down while you’re on a home warranty contract. The hassle of searching for a reasonable maintenance specialist who doesn’t charge an arm and a leg to examine it is gone. Call your home warranty provider, and they will arrange a licensed technician to visit your place and repair or replace the washing machine.  Regarding regulations, the Service Contract Industry Council (SCIC), which works with lawmakers in the US to establish uniform and fair rules for the protection of consumers, states that federal laws don’t regulate home warranty companies. These companies apply different rules depending on the state. It makes each of the 50 states have its laws regarding home warranties.   Across these 50 states, we have three main types of home warranty coverages: system plans, combination plans, and appliance plans. Here are characteristics that accompany them:

  • System plans. These plans cover entire systems such as heating, electrical systems, plumbing, garbage disposal, ceiling fans, plumbing, water heating, doorbells, air conditioning, and ductwork. 
  • Appliance plans. As the name implies, these plans provide coverage for appliances such as dishwashers, ovens, clothes washers and dryers, ranges, freestanding ice makers, built-in microwaves, and garage door openers. 
  • Combination plans. This plan offers coverage for both appliances and systems. A few companies give customers the option to customize the list of appliances and home systems they want to be covered by the contract. Also, for those who want to cover their second appliances, spas, pools, or other miscellaneous appliances exists the option to select an optional coverage.      

To be more aware of the characteristics of driving companies, look here 


Purchasing a home warranty for your property seems doubtful at first. What if you don’t receive the promised service? What if you don’t use it at all? Remember that a home warranty is an extra layer of security against the deterioration of your appliances and home systems. 

Moreover, it’s an investment at first, but unlike other investments, the probabilities of losing are smaller. Combining it with homeowners insurance protects your property’s assets and quickly recovers them.