Are home warranties worth it? A cost analysis



If you own a home, you have probably asked yourself whether a home warranty is worth it. You also may wonder which kind of home warranty makes the most sense for you and your home. 

Most often, we think of home warranties as something for newly purchased homes or if you live in an older home, and that’s true. However, home warranties also provide protection for people who want to limit out-of-pocket costs, plan to put their home on the market soon and want to attract home buyers or just don’t want to spend the time tracking down the right repair person. 

Home warranty companies are all different and offer varying warranty structures and benefits. However, as a homeowner, there is more to consider than just direct costs when making the best decision for you and your home. This article will take you through those important considerations and how to select the best home warranty company for you.


What are home warranties?

Let’s start by talking about what a home warranty is and how it functions. Home warranties are annual service contracts. When you sign up for one, the warranty will help cover the repair or replacement of major appliances like washing machines, refrigerators and dishwashers. Depending on which option you choose, though, it can also cover systems like your plumbing and HVAC systems. If you don’t have a home warranty, you’ll pay out of pocket for anything that goes wrong in your home and, often, pay too much, as well. 

Similar to homeowners insurance, home warranties typically require a monthly or annual payment along with a deductible at the time of service. However, it’s important to note that home warranties are not the same as homeowners insurance. Home insurance is typically required by mortgage lenders before they issue you a mortgage policy, and it generally covers personal property, the interior and exterior of the home, and general liability insurance. Home warranty coverage is optional and generally limits coverage to non-property damage.


Repair costs vs. warranty costs

One of the first things to consider with a home warranty is the cost of the warranty versus the cost to repair or replace items in your home without a warranty. It might help to make a list of everything you depend on in your home, like major kitchen appliances, water heaters and plumbing systems. In addition to their age, keep track of their condition, normal wear and tear and any existing manufacturer’s warranty or extended warranties that would apply.

From there, you can determine how likely you think each item will require repair at some point and the urgency to repair it. For example, you might be able to live without a dishwasher for a bit, but could you live without your furnace in the middle of winter or air conditioning in the middle of summer? Then, compare the cost of a warranty versus the cost of replacing something outright and the service fee involved. Repair costs can be expensive, but you can often save yourself money over the long term with the right warranty.

Home repair cost examples

When you start putting your list together, you’ll want to know the average prices to repair or replace major appliances and systems in your home. There are a few sites that can help with this, but we’ve listed some common, big-ticket items below:

Even if you’re looking to repair an item rather than replace it, the costs can add up: Nationally, appliance repairs range anywhere from $50 to $350.

Affordable home warranty coverage options

Companies often divide home warranties into different coverage options. The right option can make a warranty very affordable for your budget.

Cinch Home Services has three different coverage levels for you to consider:

  • Appliances: Our Appliances Plan will ensure protection for everything from your microwave to your washer and dryer.
  • Built-in Systems: With this plan, the warranty covers system components like your heating system and air conditioning systems, plumbing, water heaters and much more.
  • Complete Home: You can have the best of both plans with our Complete Home Plan, which covers major appliances and in-home systems.

No matter which plan you choose, you won’t find any confusing fine print regarding exclusions. You’ll know exactly what your warranty does or doesn’t cover. You also get the guarantee of a job well done. Our 180-day workmanship guarantee means that if the problem isn’t solved, our service providers keep working on it. We also cover unknown pre-existing conditions that you might find after moving in, and we offer discounts on the purchase of new appliances. We’re also accredited with the Better Business Bureau (BBB) with an excellent rating. You can find out more about our home warranty costs here.


Is a home warranty worth it?

For most people, a home warranty is worth it. Unless you’re a highly skilled repair technician, you’ll need to hire out for a repair or replacement at some point. Besides the cost-savings benefit, you also need to consider the peace of mind that comes with a home warranty and the time it will save you over the long run.

Peace of mind

The last thing you want to do is come home to a broken water heater on a cold night or realize your dishwasher is no longer functioning during a holiday party. But if it does, a home warranty can provide peace of mind that someone is there to help. Instead of having to hunt down a repair service, a home warranty allows you to make a service call quickly and easily at any time of the day.

Eliminate large, unexpected repair bills

Having a home warranty can save you money on unexpected repair bills. The right plan will include consistent monthly or annual payments. It will act as a buffer and prevent you from taking money out of an emergency fund or pushing a credit card limit for covered items.

Discounts on appliances and homeowners insurance incentives

Some warranty providers, like Cinch, even offer discounts on appliances as part of their home warranty contract. Some also offer additional benefits, like a deductible reimbursement on homeowners insurance policies.

Knowing you’ll always have a trusted technician

When something breaks, having a home warranty can save you time vetting the right repair company or technician. A home warranty company does the work for you, so you don’t have to worry about who’s coming into your home. With a Cinch home warranty, when you make a service request, we’ll match your request with one of our more than 18,000 network professionals.

Ability to keep repair history in one place

Having a home warranty plan, like Cinch, can also provide you with the tools to keep your repair history in one place. With our platform, you can log into your account at any time to find all the information you need right at your fingertips.


Discover your perfect home warranty with Cinch

You never know when something in your home will stop working. Having a home warranty provides many benefits. The right home warranty company and plan can help you save money and time when something breaks. A warranty from Cinch can give you the peace of mind that when you need a repair, you’ll be covered. Find out more about what Cinch has to offer and get a quote today.


Is a home warranty worth the cost? Find out more about the benefits that come with the right home warranty.