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How home warranties work (and why they’re worth it)

how home warranties work


If you’ve bought a new home of your own, congratulations: You’ve achieved a major part of the American dream! A house is a big purchase, and you want to protect your investment accordingly. Although lenders want to see a homeowners insurance policy for additional protection, some people don’t realize that this coverage typically extends only to damage of your property from things like natural disasters, theft and accidents — not a home system or major appliance that simply stops working.

This is where a comprehensive home warranty plan can help. When shopping around for home warranties, you’ll find many options available. As a result, you probably have questions about the types of warranties available, the price of various warranty options and the extent of coverage needed. Read on for a quick primer to get the facts you need.


How home warranties work

A home warranty protects major home appliances and built-in systems in case of damage. It helps cover the cost of repairing or replacing everything from washing machines to air conditioning (A/C) systems. The warranty is a contract between you, the homeowner, and a home warranty company. Exactly what items and damages are covered depend on your service contract details.

So, how do home warranties work? Again, the details depend on your provider and home warranty contract. However, here’s a basic overview of what the process generally looks like:

  • An appliance or system covered under your warranty breaks.

  • You contact the home warranty company to inform them and request a service provider. At this time, you usually pay a deductible upfront which may be applied to the cost of the repair or replacement.

  • The home warranty company contacts a service provider in your geographic area.

  • The service provider contacts you to set up and/or confirm the appointment.

  • The service provider fixes the problem, if possible. 

  • If a fix isn’t possible, the home warranty company may offer a replacement model with similar features or provide funds to allow you to purchase a unit of your choice (up to a certain amount). 

Again, the amount of the deductible will depend on the contract details. You can get an idea of what you may have to pay by checking out leading home protection plans from Cinch Home Services.

What a home warranty covers

Home warranty plans have different categories of protection. An appliance plan covers select, predefined major appliances, like a freestanding ice maker, washer/dryer, dishwasher and refrigerator. A built-in systems plan covers your major systems in your home, like heating and cooling, plumbing, electrical, garbage disposal and garage door openers. Finally, the third plan covers both major appliances and home systems.

You can also request optional coverage and add-ons for more comprehensive coverage. Do your research and read the fine print before signing any paperwork. You can get an overview of Cinch’s home protection plans online to start assessing the possibilities.

Home warranty plan costs

In general, the more comprehensive a warranty’s coverage, the more costly the plan. That said, pricing depends on various factors, from the size of your home to the number of major appliances covered. Ultimately, you want a home warranty that provides the coverage you anticipate needing based on the condition and age of your built-in systems and major appliances.

Some companies offer flexible deductibles, so you can pay a higher monthly premium but have a lower deductible to pay out of pocket at the time of service. Although you’ll have a higher monthly overhead, you won’t be caught off guard by high surprise fees when something does break.

To find out more about possible payment options, contact Cinch to get an instant quote.


Why home warranties are worth it

Although a home warranty plan is an optional coverage when owning a home (unlike home insurance), it’s a smart investment that can save you big bucks in the long run. Here are some advantages of home warranty coverage:

  • Protect against exorbitant out-of-pocket costs when a major home appliance or system breaks.
  • Get fast repairs covered quickly, thanks to 24/7 services.
  • Keep your home in top shape, maintaining its resale value if you want to sell it later.
  • An existing home warranty can be a selling point for listing agents or home buyer’s agents.
  • Enjoy peace of mind knowing that your major systems and covered appliances are protected.

When you take these advantages into account, the expense of a home warranty is well worth it.

Home warranties can save you money long term

As mentioned, a home warranty can save you money in the big picture. By investing now, you’ll save money in the future. This is especially important for new homeowners who aren’t yet familiar with the costs that come with fixing and maintaining major home appliances and systems.

Here’s a rundown of what some basic items you use regularly cost to replace or repair:

  • Air conditioner: $394-$5,859
  • Furnace: $311-$4,696
  • Water heater: $592-$1,250
  • Dishwasher: $230-$970
  • Refrigerator: $400-$1,500
  • Oven: $220-$2,000 

Paying for the full cost of a repair or replacement as described above can be a big financial drain. What’s more, such failures are impossible to see coming. You can’t know if you’ll be in a position to pay these fees when the time comes or not. You don’t want to go months without a working HVAC system or clothes washer because you can’t afford a replacement.

In contrast, a home warranty allows you to make low, predictable monthly payments upfront that you can budget for. A quality home warranty can even cover multiple repairs or replacements. All Cinch home protection plans provide a 180-day workmanship guarantee guarantee where you only pay the deductible once if the initial repair doesn’t work.

Home warranties can be an added benefit when buying or selling your home

As a first-time home buyer, you might not think too much about your new home’s major appliances because you’re used to being a renter who called the landlord when something broke down. However, when you get a new place, you’ll be responsible for an appliance when it breaks down, and you can’t be sure how old the appliances and systems are or what their state is. Even with a thorough home inspection report, you might not be able to get the full details of an appliance’s pre-existing conditions. A home warranty is a big bonus if a major appliance breaks down shortly after you move in and with normal wear and tear. 

Similarly, having a standing home warranty can help you later sell a home. If you invest in a home warranty throughout the listing period, you can ensure the property is always in a top-quality state. You don’t want potential buyers to stop by for a real estate viewing only to discover the A/C has broken or the washing machine has flooded, for example. A home warranty allows for prompt repairs, so you can always show your property in its best state.

Home warranties provide peace of mind

Last but not least, a home warranty can provide you with valuable peace of mind. As mentioned, you can never know when a major appliance might break or fail. The costs when this happens can be high. Having to face such unexpected fees on your own can create a significant financial burden. 

With a home warranty, you can rest easy knowing that such damages will be covered, at least in part. Whether it’s the A/C or washing machine, you can count on quick help, ensuring you and your loved ones can remain happy and comfortable at home.


Find the best home warranty for you with Cinch

Don’t let your valuable property investment go unprotected. A home warranty can help safeguard your important home systems and major appliances. Get the one-of-a-kind coverage you deserve with Cinch. You can view the different home protection plans offered online. Have more questions? Check out the Cinch FAQ. You can also get an instant quote for affordable home warranties from the leading home warranty company.


A home warranty helps cover repair and replacement costs in case major appliances or systems are damaged. Here’s how a home warranty works.