When you buy a home, especially when it is not new, you will likely be offered a warranty for your home. It acts as a safety net for any unexpected and expensive repairs. It can be hard to choose a select home warranty and so you need to do your research. There is a lot that goes into this financial protection but is it something you need and how much will it cost you? This article will give you a little insight into what a home warranty is all about and whether you need one for your new home.

What is it?

A home warranty is not the same thing as home insurance. Home insurance covers large major perils like fires, crimes, and adverse weather. They often include your possessions as well as the structure of the building. A home warranty on the other hand is a contract between you as the homeowner and a home warranty company. They often provide discounted repairs and replacements on home components like you’re plumbing and electrical systems. Warranties tend to come with a basic component that has certain coverages. You will likely have the opportunity to add more to your coverage should you want to.

What does it cost?

Most home warranties tend to cost several hundred dollars per year. It is often paid upfront but can also be split into installments depending on the company that you go with. The cost of your plan will vary depending on your property type and what kind of plan you want to purchase. Fortunately, the price is unlikely to change due to your property’s age. One thing you should check is that any separate structures are covered like your garage and any outhouses that you have.


A home warranty is supposed to protect against expensive unforeseen bills and can help you rest easy knowing your home is protected. If you don’t have an emergency fund then a warranty can act as a good buffer. It is also good to have if you do not have the DIY skills to sort out things for yourself. They can be particularly beneficial if you do not have much information on the home’s components and how well they have been maintained. This is really good if you have just used all of your savings to purchase your home.


Not everything is good with home warranties though. One major problem is that not every item in your home is covered. If you have components that have not been properly maintained. However, properly maintained is a grey area and warranty companies may disagree with what you consider as properly maintained. You need to find a trustworthy company and that won’t try and use the improper maintenance clause as an excuse not to pay your claims.

Home Warranties

Home warranties are not the most perfect solution but can help you with risks and costs. It won’t hurt to have one, but it is not necessary. You should go around your home and investigate if it would be worthwhile for you to have one.