What Are the Benefits of a Home Warranty?

When you buy a new home, there are a ton of things you have to take care of. You need to get pre-approved for a home loan, figure out what you want in your next house, and find the right neighborhood. 

Among all of the decisions you have to make, you also need to decide if you want to invest in a home warranty. But what is a home warranty and what does it cover? How much do home warranties cost?

We’re here to help answer all of your questions. Keep reading for everything you need to know, including all of the benefits of a home warranty.

What Is a Home Warranty?

It’s easy to confuse home warranties with home insurance policies. However, the two are distinctly different.

A home insurance policy will cover the costs in the event of a fire, flood, theft, or other disasters. It will not, however, cover the expense of failing appliances or any other major components in your house. 

This is where a home warranty comes into play. Home warranties can be purchased for your house to help cover the costs of preparing or replacing faulty appliances. For example, if your HVAC unit suddenly stops working, the home warranty will pay to repair or replace it, once you contribute the deductible. 

So, what are the benefits of a home warranty?


One of the most important benefits of a home warranty is your ability to pick the right plan for your circumstances. Home warranty plans are quite flexible and can be renewed or changed each year.

For example, basic home warranties can cost as little as $35 a month. However, you can alter your plan by opting for more coverage and dictating how much you want to pay in deductibles  Click here to learn more about the types of home warranties.

Lower Costs

Your next question is probably “How much do home warranties cost?”  

As a homeowner, studies suggest you can expect to pay anywhere from 1% to 4% of your home’s total value each year on home maintenance and repairs. For reference, if your home’s value is $225,000, that’s $2,250 to $9,000 a year. 

If you opt for the basic $35 a month plan listed above, that’s only $420 a year, plus any deductibles you had to pay. Either way, it will be far less than paying for everything out-of-pocket. 

Peace of Mind

Finally, aside from lower costs and flexibility, one of the best home warranty benefits is peace of mind. A home warranty is basically a type of insurance on your home’s major components and appliances. 

If one of them should suddenly stop working or start malfunctioning, you won’t need to panic. Sure, you may need to have costly repairs done or replace the unit entirely, but it won’t be out of your pocket (aside from your deductible). You can call the repairman without frantically calculating the bill and worrying about how much money you’ll need to take out of savings. 

Want to Experience the Benefits of a Home Warranty for Yourself?

Do you need a home warranty? Well, ultimately, that’s up to you.

However, if you like paying less for appliance repairs and replacements and enjoy the peace of mind of extra coverage, we think it’s a good idea. The benefits of a home warranty definitely outweigh the costs. 

And if you’re looking for more homeownership or investment advice, check out some of our other articles while you’re here. Our blog is full of valuable information for people from all walks of life. 

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