Are Home Warranties Worth It?

Forbes

04-08-2025

In order to find out more about the value of a home warranty plan and how homeowners feel about their policies, we surveyed 1,800 homeowners in March 2025 who have purchased a home warranty in the past year. We found some key insights that may help inform your decision on if a home warranty is worth it, especially in these key situations. You Value Financial Peace of Mind
When asked, 64% of people in our survey said peace of mind was a major driver for taking on a home warranty, the most common answer that homeowners gave. A home warranty can offer great peace of mind if you're concerned about upfront repair or replacement costs. For example, a broken fridge typically costs about $250 to fix, while refrigerator replacement can climb to $2,000. Home warranty policies can help you avoid paying for a pricey repair on the spot and instead limit your cost to a monthly premium and a service fee if the repair is covered. Your Appliances and Systems Are Getting Old
When your appliances are nearing the end of their lives, they may need more frequent repairs or even replacement. Forty-four percent of people surveyed said they require coverage for aging systems and that was one of their reasons for opting for a home warranty. Home warranty plans are typically more valuable for older appliances and systems because of their tendency to break down while also no longer being under the manufacturer's warranty.
However, some home warranty plans have age limits or restrictions on preexisting conditions, so be sure to ask about these if this is your main reason for getting a plan. You Don't Need To Choose Your Own Technician
Unless you have a roster of great technicians, it can be a job in itself to find a contractor you trust who is in your budget and available to perform a repair. In fact, 40% of homeowners surveyed said they wanted to have a single service for arranging repairs and that was a reason they opted for a home warranty. With home warranty plans, you typically submit a request for a repair and the company will assign an approved contractor without you needing to do the legwork.
However, if you do have pros you trust, you can still find a home warranty plan that will allow you to work with your own contractors, but there may be preapprovals required and other restrictions. Budget Management and Potential Savings
Homeowners know that home maintenance can quickly add up, especially in older homes when repairs on and replacements of multiple items seem to pile up all at once. Home warranties can come in handy when budgeting because instead of factoring in the variable costs of multiple repairs or replacements, you can better anticipate what you'll pay with set premiums and service fees. You can also save money because even one repair without a home warranty can greatly exceed the cost of your monthly premium. It tracks then that 35% of those we surveyed said budget management was a plus of a home warranty plan.
Keep in mind that not all home repairs will be covered, whether because of the reason for the repair, coverage limits or the item not being a part of your plan, but a home warranty can help give you some control over common repairs on your most important appliances and systems. You Lack the DIY Skills To Do Repairs
While you may have some DIY skills, there's no shame in being unfamiliar with or intimidated by repairing certain home appliances or systems. In fact, we'd recommend you leave more dangerous tasks to the pros. Having access to a network of trusted contractors with a home warranty plan can be a serious perk and relieve the stress of trying to repair something yourself. Reduces Stress for New Homeowners
Home warranties often come with a new home, but if your closing didn't come with one, it can still be a wise purchase for a new homeowner. The first year of home ownership can be daunting as you get used to unexpected repairs, especially in an older home. A home warranty plan can give you a resource to check out any interesting sounds coming from your dishwasher or flickering lights in your basement. Selling a Home With a Home Warranty Included
The housing market can be tough, so adding a home warranty as part of the deal can be a smart way to make your home more attractive. Additionally, some home warranty plans can protect your home during the listing period, which can come in handy to ensure everything stays in tip-top shape.