A home warranty is a service contract designed to cover the repair or replacement of major home systems and appliances that fail due to normal wear and tear. It differs from homeowners insurance, which typically covers damage from events like fire, flooding, or storms. Instead, a home warranty kicks in when everyday items like your HVAC system, refrigerator, dishwasher, or plumbing stop working.
Most plans include core systems, such as electrical, plumbing, and heating, and offer options for covering appliances or add-ons like pool equipment or a second refrigerator. If your HVAC breaks down mid-summer or your washing machine gives out right after you move in, the right warranty plan can help you avoid a surprise expense and get things running again quickly. That said, coverage limits, exclusions, and service fees vary widely by provider, so it’s crucial to read the fine print.
Keep reading to learn more about what a warranty entails and how to choose the right coverage for your needs.
A Home Warranty Is Often Part Of The Deal
When you’re buying a home, especially in a competitive market like Los Altos, your real estate agent might suggest negotiating a home warranty into the purchase contract. It can be a compelling way to sweeten the deal for both the buyer and seller. For buyers, it offers reassurance that they won’t be on the hook for costly appliance repairs right after they get the keys. For sellers, including a warranty can make their home more attractive without significantly cutting into the bottom line.
This is especially common in older residences, wherein the appliances or systems may not be new. The warranty offers valuable peace of mind during the first year of homeownership. So, once that initial year is up, you’re left with a question: should you keep paying for coverage?
This is especially common in older residences, wherein the appliances or systems may not be new. The warranty offers valuable peace of mind during the first year of homeownership. So, once that initial year is up, you’re left with a question: should you keep paying for coverage?
Evaluating Whether To Renew Your Coverage
After the first year, you’ll likely get a renewal notice, but is continuing the plan worth it? That depends on a few key factors.
Start by evaluating the age and condition of your home’s systems and appliances. If your furnace, water heater, and air conditioning system are already a decade old or more, a warranty might save you money. These extensive, essential systems can be expensive to repair or replace, and one claim could outweigh the cost of a year’s coverage.
On the other hand, if your home is newer or you've recently replaced key systems, the odds of needing warranty coverage may be low. At that point, the monthly or annual premiums — plus the per-incident service fees — might not justify the cost. Take time to list what’s covered, compare it against the age and reliability of each item throughout your home, and weigh how likely you are to need repairs in the coming year.
Start by evaluating the age and condition of your home’s systems and appliances. If your furnace, water heater, and air conditioning system are already a decade old or more, a warranty might save you money. These extensive, essential systems can be expensive to repair or replace, and one claim could outweigh the cost of a year’s coverage.
On the other hand, if your home is newer or you've recently replaced key systems, the odds of needing warranty coverage may be low. At that point, the monthly or annual premiums — plus the per-incident service fees — might not justify the cost. Take time to list what’s covered, compare it against the age and reliability of each item throughout your home, and weigh how likely you are to need repairs in the coming year.
Understanding Plan Options And Costs
Not all home warranties have the same benefits. Some providers specialize in lower-cost plans with more exclusions, while others offer comprehensive coverage with higher price tags. A basic plan may only include core systems like plumbing and electrical, while more robust options can extend to kitchen appliances, laundry machines, or even garage door openers.
You’ll also need to consider the service call fee. Most home warranties require you to pay a fixed amount — typically between $50 and $150 — each time a technician is sent to your home. Even if the problem isn’t fixed, you still pay that fee. Over time, those charges add up, especially if you’re dealing with frequent issues. Be sure to ask about caps on repair costs, replacement values, and whether the provider guarantees their contractor’s work.
Also, compare annual premiums, depending on the coverage level. If you're considering renewing, request a breakdown of your past claims and weigh them against what you've paid. If you haven’t made any claims — or if your claims were denied — you might want to reconsider keeping the plan.
You’ll also need to consider the service call fee. Most home warranties require you to pay a fixed amount — typically between $50 and $150 — each time a technician is sent to your home. Even if the problem isn’t fixed, you still pay that fee. Over time, those charges add up, especially if you’re dealing with frequent issues. Be sure to ask about caps on repair costs, replacement values, and whether the provider guarantees their contractor’s work.
Also, compare annual premiums, depending on the coverage level. If you're considering renewing, request a breakdown of your past claims and weigh them against what you've paid. If you haven’t made any claims — or if your claims were denied — you might want to reconsider keeping the plan.
Benefits Of Keeping A Home Warranty
There are situations where a home warranty offers tangible value, even beyond the first year. If you're not confident with repairs or don't have a trusted network of repair professionals, having one number to call when something breaks is convenient. Home warranty companies typically have vetted contractors in their network, which can save you the time and effort of finding someone on short notice.
For homeowners who like predictability in their budget, a warranty can also help with financial planning. Instead of bracing for a $2,000 bill when the air conditioner fails, you know you’ll pay a set fee and possibly a service call charge. That predictability is especially helpful if you're managing other household expenses or simply prefer that peace of mind.
Finally, for homeowners with multiple aging systems or appliances throughout the property, a home warranty can reduce the risk of multiple costly breakdowns hitting at once. If your dishwasher fails in June, the water heater leaks in August, and the dryer needs replacement in October, your warranty could pay for itself several times over the course of the year.
For homeowners who like predictability in their budget, a warranty can also help with financial planning. Instead of bracing for a $2,000 bill when the air conditioner fails, you know you’ll pay a set fee and possibly a service call charge. That predictability is especially helpful if you're managing other household expenses or simply prefer that peace of mind.
Finally, for homeowners with multiple aging systems or appliances throughout the property, a home warranty can reduce the risk of multiple costly breakdowns hitting at once. If your dishwasher fails in June, the water heater leaks in August, and the dryer needs replacement in October, your warranty could pay for itself several times over the course of the year.
Reasons You Might Skip Renewing
Despite those benefits, home warranties aren’t always a great fit. Some homeowners find the coverage too limited or the service inconsistent. If your claim is denied because the issue is deemed a “pre-existing condition” or due to a coverage loophole, you may end up paying out of pocket anyway, plus the service fee.
Furthermore, if you prefer to vet your own contractors, the restrictions of a warranty provider’s network might be frustrating.
Another reason to opt out of renewal: if you’ve invested in newer, energy-efficient appliances with manufacturer warranties still in place. In that case, you’re potentially double-paying for coverage. Instead, you might put the money you would have spent on a warranty into a separate savings account for emergency repairs.
Furthermore, if you prefer to vet your own contractors, the restrictions of a warranty provider’s network might be frustrating.
Another reason to opt out of renewal: if you’ve invested in newer, energy-efficient appliances with manufacturer warranties still in place. In that case, you’re potentially double-paying for coverage. Instead, you might put the money you would have spent on a warranty into a separate savings account for emergency repairs.
How To Vet Providers And Plans
If you’re deciding whether to renew or switch to a new provider, research is key. Read reviews from other homeowners in your area, and look for patterns of customer satisfaction or complaints. Focus especially on whether the provider is responsive, honors claims, and has reputable contractors.
Pay close attention to the exclusions, as these are often where warranty companies limit their liability. For example, some plans exclude items that haven’t been maintained properly, even if wear and tear is the cause of the failure. Others might cap the total coverage amount per year, meaning you could hit your limit quickly with just a few claims.
Also, see if your plan offers flexibility. Some providers allow you to customize coverage so that you’re not paying for items you don’t own. If you don’t have a pool, why pay for a warranty that includes it? Tailoring your coverage to your home’s specific features is one way to make a warranty more worthwhile.
Pay close attention to the exclusions, as these are often where warranty companies limit their liability. For example, some plans exclude items that haven’t been maintained properly, even if wear and tear is the cause of the failure. Others might cap the total coverage amount per year, meaning you could hit your limit quickly with just a few claims.
Also, see if your plan offers flexibility. Some providers allow you to customize coverage so that you’re not paying for items you don’t own. If you don’t have a pool, why pay for a warranty that includes it? Tailoring your coverage to your home’s specific features is one way to make a warranty more worthwhile.
Final Thoughts On Whether It’s Worth It
Ultimately, deciding whether to keep a home warranty is about understanding your risk tolerance, evaluating the condition of your systems and appliances, and calculating how often you’re likely to use the coverage. You’ll want to approach the decision like any smart homeowner would: with clear expectations, detailed comparisons, and a sense of your home’s specific needs.
Take a closer look at your home’s needs, compare your options, and weigh the pros and cons. When you have all the information, you’ll feel confident in your choice — and that peace of mind is something every homeowner deserves.
If you’re ready to buy a home in Silicon Valley and want expert guidance through warranties and beyond, connect with The Campi Group.
Take a closer look at your home’s needs, compare your options, and weigh the pros and cons. When you have all the information, you’ll feel confident in your choice — and that peace of mind is something every homeowner deserves.
If you’re ready to buy a home in Silicon Valley and want expert guidance through warranties and beyond, connect with The Campi Group.
