A home warranty (in contrast to homeowners insurance) is essentially a service contract that covers the repair or replacement of any important home system, components and appliances that break down over time. And while it can save you money, is it worth the cost in the long run? The short answer is that it varies from person to person, but it is useful to know your options when making the decision that will work out best for you in the long run.

To help, we are breaking down everything you need to know about home warranties so that you can make an informed decision when buying a new home (or getting coverage for your existing home!).

  • Peace of mind that if something major goes wrong at your house, you aren't going to be expected to shell out a fortune to get it repaired.
  • Relatively inexpensive, with most warranties costing less than $500/year, depending on the chosen coverage (your first year may even be free, so make sure to check with your realtor!).
  • Flexible coverage means you can tailor a warranty policy to fit the unique needs of your home.

  • You may not ever use it, particularly if your home is relatively new (famous last words!)
  • If you are handy with home repairs, you may be able to fix a lot of the repairs yourself for less money than your warranty.
  • Appliance and systems must be carefully maintained by you in order to qualify for the coverage of any necessary repairs.
  • Coverage of big ticket items (air conditioning, septic system, etc.) will likely bump up the overall cost significantly.
  • Inability to choose who handles the repairs, as the warranty provider will usually choose one from their list of service providers.
  • 'Pre-existing conditions' will not be covered by a warranty.
  • The warranty provider makes the ultimate decision on whether something is repaired or replaced entirely.

If you still have questions, ask your 360 agent for more information; we are happy to help guide you to the best decision for you and your family.