With the joy of homeownership also come many responsibilities. Over time, home appliances and systems wear down and stop working. Naturally, these costs often fall on you when you’re the homeowner. Thankfully, there’s a solution that can help. With a home warranty plan, you can help protect your finances and avoid costly, unexpected repair bills that may not be covered by your homeowners insurance plan.
According to ConsumerAffairs, homeowners spent an average of $13,667 on home improvement, maintenance and emergency repairs in 2023. As homes continue to age and costs of repairs and replacements rise, you may be asking yourself, “Do I need a home warranty?”
Let’s review some of the basics of home warranty coverage and explore some scenarios where home warranty plans are particularly beneficial. By the end of this article, you’ll be able to firmly decide whether you need a home warranty plan.
Is a Home Warranty Required?
No. Although a home warranty plan is not required, many homeowners are turning to home warranty companies to protect their appliances and home systems. Home warranty coverage* offers peace of mind when your essential appliances and systems stop working. You’ll know exactly who to call to fix them while potentially avoiding hefty expenses.
So, When Do You Need a Home Warranty?
Home warranty plans may help save any household from the pain of expensive repairs and replacement costs, but there are specific scenarios where home warranty coverage can be particularly beneficial. Here are some of those instances and why you can benefit from having a home warranty plan:
1. When Buying a House
This is especially true if you are buying an older home where the appliances and systems have experienced significant wear and tear. Let’s face it: even the most honest seller might miss some issues with home appliances during the sale. Having the right home warranty plan may help protect you from expensive repair bills popping up after you’ve moved into your new home.
Additionally, when you’re less worried about having extra money stashed away for unexpected expenses, you can have more to spend on valuable upgrades to your new home. According to the US Census Bureau, approximately 61% of owners of older homes started a home maintenance and improvement project between 2019 and 2021, spending a median of $4,100 on all during that time. With a home warranty plan in place for your new home, you can worry less and focus instead on improving your home — a valuable investment.
2. When Selling Property
According to the Service Contract Industry Council, sellers that provide home warranty coverage sell their homes for $2,300 more on average, and their properties spend 11 days less on the market. Having a home warranty plan is a strong selling point that could persuade home buyers to choose your home over someone else’s.
3. When Your Appliances Are Aging
Appliances age and wear down over time. Various factors can impact how long an appliance or home system stays working in optimal condition. When your AC system, refrigerator or washer and dryer starts to give you issues, the right home warranty will potentially save you money on repairs and, in some cases, replacements. As your appliances age, it is wise to get protection so you’re covered before they stop working.
4. When Your Emergency Budget is Tight
Just like with most types of insurance, you pay for home warranty coverage to lessen the financial blow in emergencies and/or unforeseen situations. You know your household budget best, and unexpected repairs can be a significant setback to your savings. Imagine your family’s vacation fund lost to a broken HVAC system. If you have a home warranty plan, you can get things back up and running without sacrificing your budget.
5. When Owning Rental Properties
Home warranty plans may save you lots of money if you own rental properties. When something breaks, it can be a hassle to find a trusted repair person. If you have home warranty coverage, you can rest assured that you have a network of vetted service technicians who will be there to diagnose and fix the issue.
Not only will this help protect you from unexpected costs, but it’s also an easy way to get help so your renters don’t have to live long without an essential item.
Do You Need a Home Warranty if You Have Home Insurance?
This is one of the most common questions about home warranties. The short answer is it depends on your situation. Unlike homeowners insurance, home warranties are not required by mortgage lenders, but having both is the best way to protect your home from the unexpected.
Although very important, homeowners insurance does not offer the same protection as home warranty coverage. There is a big difference: homeowners insurance protects you from catastrophic disasters, such as fires, affecting your home, while home warranty plans protect your appliances and systems from normal wear and tear. This includes items such as your microwave, refrigerator and HVAC systems.
How Much Can You Save from a Home Warranty?
According to a report from insurance firm Hippo, homeowners spent an average of $6,000 annually on maintenance and repairs in 2022, with emergency home repairs averaging $1,953.
Meanwhile, the average cost of a home warranty plan ranges from $40 to $70 per month for a standard plan. Service fees range from $75 to $125 per visit.
So, as you can see, having a home warranty plan may be worthwhile.
Should You Get a Home Warranty? Other Things to Consider:
Coverage options
Home warranty plans come in a variety of options. Every home has different and specific needs, and most home warranty providers have plans that can fit with your budget and needs. Be sure to ask about coverage options and read the fine print.
Your location
If you are in a place with an extreme climate, specific systems and appliances can be at greater risk of breaking down. Although it is good to look at the average lifespan of your appliances, your systems and appliances might be more susceptible to issues in certain locations. Having proper coverage can help save you from costly repair bills. Additionally, the cost of plans can differ based on state regulations.
Deductibles/service fees
Like with insurance, you can choose to have higher deductible plans or plans with higher monthly or yearly premiums. Ensure you choose a plan with a deductible that fits your coverage needs and budget.
How to Use a Home Warranty Plan
Getting help when something breaks is easy. Here’s how it works:
- Review and understand your coverage.
- File a warranty claim and request a service visit.
- The company will send a technician to diagnose and fix the issue.
- Pay the service fee (deductible) and any uncovered repair expenses.
When you have the right coverage, you can save time, money and stress — instead, enjoy the peace of mind knowing that you have a plan to get your appliances and systems back in working order.
Discover the Best Home Warranty* Plans with Cinch Home Services
Cinch Home Services offers various plans for you to choose from.
We have won 6 ConsumerAffairs Buyer’s Choice Awards over the last two years based on real customer service feedback. At Cinch Home Services, we aim to be as transparent as possible — we don’t hide anything in the fine print — so you’ll completely understand your home warranty coverage and exclusions.
Check out our home warranty plans and find the one that’s right for you. Get an instant quote online and secure the best home warranty contract with Cinch Home Services today.
*For NJ residents: The product being offered is a service contract and is separate and distinct from any product or service warranty which may be provided by the home builder or manufacturer.
The information in this article is obtained from various sources and offered for educational purposes only. Furthermore, it should not replace the advice of a qualified professional. The definitions, terms, and coverage in a given policy may be different than those suggested here. No warranty or appropriateness for a specific purpose is expressed or implied.
