Things You Need to Know Before Purchasing a Home Warranty
*Updated July 8th, 2025
Have you thought about buying a home warranty for a property you’re about to purchase or already own? Home warranties can offer valuable financial protection, covering unexpected repair or replacement costs for major home systems and appliances.
However, not all home warranties are created equal, and it’s essential to understand the details before committing to one. From understanding home warranty coverage and exclusions to knowing the warranty cost and service processes, asking the right questions upfront can help you avoid surprises and ensure the home warranty plan meets your needs. Here’s what you need to know before you purchase a home warranty.
What Is a Home Warranty?
A home warranty is a service contract that covers systems and appliances that break down through normal wear and tear. It’s a contract between you and the warranty provider that promises to cover the repair or replacement cost of a covered home system or appliance.
A home warranty plan may cover just appliances, just systems (like HVAC or plumbing), or both. The more it includes, the higher the home warranty cost, but the more protection you gain.
Most home warranty companies have specific rules about maintaining the appliance or home system and what’s excluded. Because each home warranty policy varies, it’s important to shop around and compare coverage before you buy a home warranty.
How Do Home Warranties Work?
When you get a home warranty, you pay an annual premium—often all at once or in monthly installments. This is the base warranty cost, even if you don’t file any claims.
If a covered home system or appliance breaks, you pay a service fee and file a claim with the home warranty company. They’ll send a technician to assess and, if approved, repair or replace the item. If a repair isn’t possible, the company may offer a replacement—though it may not match the exact make or model.
Why Home Buyers Should Consider a Home Warranty
Peace of Mind for Home Buyers
When you buy a home, especially an older one, you may not know the full condition of your home. A home warranty can help protect you from surprise home repairs, such as a broken HVAC system or water heater. This kind of protection offers peace of mind, especially for home buyers who may have just spent their savings on a down payment.
No Emergency Fund? A Warranty Helps
If you don’t have a large emergency fund, even a single major appliance or home system failure could be financially draining. Home warranties let you plan for the worst with predictable costs—an annual premium and a set service fee per claim.
Buying a Home with Older Appliances
Purchasing a home with older appliances or major home systems? A home warranty at closing can shield you from immediate repair costs. Real estate agents often recommend a home buyers warranty for this very reason.
Selling? Include a Home Warranty
Homeowners looking to sell might include a home warranty in the sale. It’s an attractive perk for potential buyers, showing that the seller cares about the home’s future condition. This strategy can help your home stand out and sell faster.
Landlords Benefit Too
If you’re a landlord, a home warranty policy can help streamline home maintenance. Instead of managing repairs yourself, your warranty provider arranges the home warranty service, keeping tenants happy and costs controlled.
Top Questions to Ask Before You Buy a Home Warranty
1. What Does the Home Warranty Cover?
Don’t assume your home warranty plan covers everything. Ask whether it includes appliances like your refrigerator, washer, or stove and systems like HVAC, plumbing, or electrical. Some home warranty companies offer tiered plans, so list what’s important to you and ask about each covered item.
2. How Long Do Repairs Take?
Ask how quickly they typically handle claims and repairs. Even if you file a claim immediately, you may be without your appliance or home system for several days. Choose a reputable home warranty provider that works with reliable technicians.
3. What Are the Warranty’s Exclusions?
Most home warranties don’t cover:
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Pre-existing conditions
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Improper installation or lack of maintenance
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Damage from natural disasters (covered by homeowners insurance instead)
Make sure you understand what the warranty doesn’t include.
4. Which Contractors Do They Use?
Since the warranty provider chooses who performs the repair, find out who they work with. Confirm the contractors are licensed, insured, and reputable in your area.
5. What Is the Cost of a Home Warranty?
The cost of a home warranty includes the annual premium and the service fee per repair visit. Expect to pay $300–$800 annually, depending on coverage. Some companies, like Liberty Home Guard, offer flexible pricing options and add-ons.
6. How Much Are the Service Fees?
You’ll pay a service fee each time you call for a repair or replacement. Some plans offer low premiums but higher service fees, while others are the opposite. Decide what balance fits your budget.
7. How Are Claims Handled?
Do they accept online claims? Are they available 24/7? These factors matter when a system or appliance breaks on a weekend or holiday.
8. What Is the Waiting Period?
Most home warranties have a 30-day waiting period after enrollment. Be aware of any delays in coverage, especially when you’re buying a house.
9. What Maintenance Is Required?
Some warranties require regular maintenance (e.g., annual HVAC servicing). Failing to maintain a home system or appliance could void coverage.
10. How Do You Cancel or Transfer Coverage?
Some policies allow you to transfer your warranty when selling your home. Others charge a cancellation or transfer fee.
How to Buy a Home Warranty
Step 1: Choose the Right Coverage
Do you want coverage for just appliances, just systems, or both? Think about your needs and budget. A warranty typically includes options for custom plans.
Step 2: Compare Warranty Companies
Look at premiums, home warranty coverage limits, and customer reviews. Explore trusted providers like American Home Shield® home warranty or Liberty Home Guard.
Step 3: Understand Coverage Caps
Know how much each covered item is capped at—some warranties only pay up to a certain amount per repair or replacement.
Step 4: Read Reviews and Contact Customer Service
Check Better Business Bureau, TrustPilot, and more. Test the provider’s support before signing up.
Step 5: Purchase Your Warranty
Once you’re satisfied, complete the enrollment. Some providers let you get a home warranty online; others require a phone call. Be sure to read the fine print.
Final Thoughts: Are Home Warranties Worth It?
For many home buyers, a home warranty is worth the cost—especially if you’re moving into an older home or lack a large emergency fund. A home warranty can help protect your investment and reduce the stress of managing home repairs.
Whether you’re preparing to buy a home, considering a home warranty at closing, or looking to protect your home after years of ownership, this type of service contract can be a practical tool.
Remember: a warranty is a service, not a guarantee. But with the right plan, reliable provider, and a good understanding of the terms, home warranties can be a smart part of your long-term home maintenance strategy.
FAQ: What You Need to Know About Home Warranties
Q: What is the purpose of a home warranty?
A: To provide financial protection for appliance or home system breakdowns due to normal wear. It covers repair or replacement costs after a service fee is paid.
Q: Is a home warranty the same as home insurance?
A: No. Homeowners insurance protects your home against disaster-related damage. A home warranty covers appliances and systems that fail from regular use.
Q: Do real estate agents recommend home warranties?
A: Yes. They often encourage sellers to pay for a home warranty to attract home buyers and provide extra value.
Q: Are home warranties worth the cost?
A: It depends. If you have aging systems or appliances—or limited savings for home repairs—a home warranty may save you money and offer valuable coverage.
Additional Home Warranty Resources
- Home Warranty Cost Guide
- The Top Benefits of a Home Warranty
- Does Your Home Warranty Cover Roof Leaks?
Anna has over six years of experience in the home services and journalism industries and serves as the Content Manager at MyHomePros.com, specializing in making complex home improvement topics like HVAC, roofing, and plumbing accessible to all. With a bachelor’s degree in journalism from Auburn University, she excels in crafting localized, comprehensive guides that cater to homeowners’ unique needs. Living on both coasts of the United States has equipped her with a distinctive perspective, fueling her passion for turning any house into a cherished home through informed, personalized decision-making.
