What is a Home Warranty?
2026
For $300 to $500 a year, depending on where you live, a home warranty covers the costs of repairing or replacing most any malfunctioning system in your home.
For example, let’s say your dishwasher starts leaking and your clothes dryer conks out. If you had a home warranty, you wouldn’t have to call around to get repair estimates. You wouldn’t have to pay to get it fixed, either.
Instead, just call your home warranty provider. The company would then contact the appropriate repair company it has an arrangement with. The repair company would call you to arrange an appointment. Next, they’d send someone to your house to fix the problem or replace the malfunctioning appliance, if necessary, with a new one. Your home warranty covers the costs, though you may have a co-pay of about $50 per incident.
Should you buy a home warranty?
Home warranties are particularly ideal for first-time Gen X /Y and Millennial home buyers who’ve been renters. They’re used to calling the landlord when there’s a problem, and a home warranty company takes over that role. Also, these homeowners typically work long hours and might not have the time to find a plumber or an electrician, let alone wait around for the noon to 4 p.m. window for the repairman to show up.
Are you buying or do you own a 15- to 20-year-old home (or older)? Does your home have aging appliances and systems? If so, a home warranty—which you can buy at any time—might be worth the money. Many appliances and systems start to falter after 15-20 years, and you don’t want them all falling apart on you around the same time. Your real estate agent can give you referrals, and you can read reviews of home warranty companies on the Home Warranty Reviews site.
Home warranties are also recommended for investors or “accidental landlords,” people who rent their homes because they needed to move but didn’t want to sell until the market grew stronger. If you’re not an experienced investor and don’t have a network of repair folks, it may be easier to buy a home warranty.
Shopping for a home warranty? Ask each company exactly what’s covered. If something isn’t covered (such as the plumbing system), find out if you can add on coverage and if so, at what cost?
