Knowing the Benefits of a Home Warranty Plan


Buying a home is one of (if not THE) largest investments of your life. However, it does not have to be the most stressful investments of your life. It helps to be aware of certain steps that can be taken to help give you peace of mind throughout the home-buying process.

A home warranty plan is one way to safeguard your budget against unexpected and expensive system and appliance failures. With a home warranty plan, you can invest in a home with the knowledge that covered repairs will be resolved efficiently. It is important to note that home warranties are not insurance policies. They’re service contracts – essentially a company’s agreement to pay for fixing (or replacing) specified home components.

A basic home warranty plan costs around $350 to $500 a year. Sellers generally offer a year’s coverage as an incentive to potential buyers. As a buyer, it is important to remember that when you purchase a previously owned home, you are also purchasing used appliances and home systems that have accumulated normal wear and tear. Protect yourself against unexpected costs by carefully reading through the warranty plan offered by the seller. While tedious, doing so may save you a lot of money! A standard plan generally offers coverage for the following: heating systems, ductwork, plumbing, limited pest control, electrical, garage door opener, central vacuum, dishwasher, trash compactor, kitchen exhaust fan, oven, range, cook-top, microwave oven. The photo below (taken from Old Republic Home Protection) shows the average out-of-pocket costs for repairs or replacements for systems or appliances.


If you do experience a problem, always contact your warranty provider before hiring a service provider (such as a plumber, technician, etc). Warranty providers have their agreements with their own network of qualified service providers and may not provide compensation if other contractors are used.

There are a few other general conditions that are helpful to be aware of:

  • Coverage is normally effective upon close of sale for a one-year term.
  • The damage must have become inoperative due to normal wear and tear
  • Only systems and appliances specifically mentioned are covered
  • The appliance must have been functioning in a safe and proper manner on the effective date of the contract
  • They must be properly and permanently installed and located within the main foundation of the occupied living space of the home and/or detached garage
  • The appliance must be designed for residential use
  • Home warranties charge a service call fee (also called a trade call fee) every time the warranty holder requests that a service provider come out to the house to examine a problem (whether the service is covered or denied)

*Be sure to double-check your specific plan, as each varies to some degree.*

In conclusion, a home warranty can provide reassurance to a homebuyer who has limited information about how well the home’s systems have been maintained. A warranty can also be helpful for someone who has just spent a large portion (if not all) of their savings to purchase a home and want to avoid any additional expenses. Warranty plans and providers are not perfect, but can save home owners a significant amount of money! Be sure to know what is included and covered in your plan!

One thought on “Knowing the Benefits of a Home Warranty Plan

  1. Matthew

    I’m typically the kind of person who never buys a warranty for just about anything. The majority of them out there are just realistically not worth it at all. For something like a personal electronics such as a video game system you have to pay almost $100 for something that is only worth $300 and that is the only thing that you get covered.
    All in all, a home warranty is just a smarter deal to make. As long as you are taking care of your appliances and know your plan then you should have nothing to worry about. I’ve had my provider, Service America, for about 3 years at this point and they have repaired both my refrigerator and my AC. I live in Florida, so having those things are kind of a must. The only seasons here are “on fire” and “slightly less on fire”. They’ve been amazing to me and luckily fixed them without a hassle. Just for the reasons of protecting you from the hassle, I’d recommend getting a home warranty plan. And if you’re in Florida, I suggest you check out Service America’s website:

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