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The Ins and Outs of Home Warranties & Why You Need One

a blue, two-level home with a well-manicured garden in front

A few days before Christmas, your furnace gives out. You’re hosting the winter festivities this year, and it’s freezing temperatures outside. Without heat, it’ll soon be freezing inside as well. What do you do?

If you’re like our Digital Content Manager Susie, you jump onto your home warranty website and place a request for service. A home service professional arrives at the house on Christmas Eve to fix the heating system and saves the holiday – thanks to a home warranty.

Not sure if a home warranty is right for your house? We tackle the most frequently asked questions below to help you decide that yes, you probably should invest in home warranty coverage.

What is a home warranty?

a clean kitchen with stainless steel appliances and white cabinets
Kitchen appliances are generally covered in a home warranty.

A home warranty is a service contract that covers the cost of repairs and replacements of many appliances and the systems in your home. Though plans differ, most home warranties cover your heating, cooling, plumbing (hot water heater), and electrical systems. Some also include roof leaks and other structural damage. A majority of plans cover your everyday appliances, such as the refrigerator, stove, dishwasher, washing machine, and dryer.

You usually can purchase additional coverage that applies to a pool, spa, and more appliances.

How does a home warranty differ from homeowners insurance?

a stainless steel grill on a deck of a blue house
You can add a grill to your warranty if it’s not included.

Home warranties cover the wear and tear of your appliances and home systems. Homeowners insurance covers unexpected damages, usually from weather events or fire. If you have flood insurance and your home floods, then your insurance will cover the damage to your home, appliances, systems, etc.

However, if your refrigerator fan dies after eight years, then your home warranty will cover its replacement.

Essentially, a home warranty and a homeowners insurance policy complement each other and help to keep your home’s appliances and systems functioning.

How does a home warranty work?

a home service professional cleans an outside HVAC unit
A home pro will come out to service your appliance or system.

When your appliances or heating system stops working, you contact your home warranty company, such as Super Subscription Care. A qualified contractor – either from the home warranty company or one contracted by the company – will be dispatched to your home to inspect, assess, and ultimately repair your appliance or system if possible.

A home warranty plan usually has a monthly cost with a service fee with every call. The cost to repair and replacement parts are covered by the warranty company.

How long does a home warranty last?

Most home warranty service contracts last approximately 12 months and are renewed annually.

How much does a home warranty cost?

a dollar sits on a wooden desk
Price varies depending upon your plan.

Prices vary from the type of plan to the number of appliances in your home to the different companies. Home warranty coverage can start on major appliances in your home for as little as $25, but others – like PSE&G – provide a la carte services. This allows you to choose which appliances and systems you want covered by their plans, including but not limited to HVAC systems, gas fireplaces, and even natural gas grill protection. These types of plans can range from $2.95 a month to almost $20, depending upon the service and appliance.

Some companies even offer money off and your first month free, depending upon the service you choose.

Service fees also vary from company to company, with some as little as $60 and others as much as $125.

Are home warranty plans worth it?

a casserole cooking in an oven
You’ll be happy when your oven is working again.

That’s a matter of opinion, but they provide peace of mind to homeowners who fear maintenance and repair costs. Plus, having a home warranty is generally financially beneficial. According to HomeAdvisor, the typical dishwasher repair ranges between $50 and $600. If you pay $75 a month and then $80 service fee for repair with your home warranty plan, you save money on any repairs over $155. Larger repairs, such as gas furnace repairs, can cost upwards of $1,200.

On a personal note – all but one of our team’s homeowners have some sort of home warranty.

Do I need a home warranty?

Most banks will not provide a mortgage to a buyer without insurance, but a home warranty is different. It’s not a requirement for home buying or selling.

After getting a home inspection, we suggest you assess the wear and tear on your “new” home appliances and systems, and decide what is financially beneficial for your family.

When should I get a home warranty plan?

two women sit at a desk while one of them signs paperwork
Most people purchase a warranty when buying a home.

You can purchase a home warranty at any time when you own a house. Many people buy them as part of their home purchase, while some builders provide a warranty, which generally covers structural defects such as drywall and roofs.

Whether you’re buying a new or “new” home, check to see if the purchase includes a home warranty and if so, what it entails.

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