Appliance repairs are expensive. Fixing your washing machine may cost as much as $450, and replacing complex parts, such as refrigerator compressors, may run up to $1,250, according to home-services website Angi. A home warranty could offset those expenses, but it’s important to understand what it includes and whether purchasing one makes sense for you.
A home warranty is a service contract that covers the cost of repairing and replacing major appliances that have been damaged by wear and tear. Some contracts also cover your plumbing, electrical, and heating, ventilation and air conditioning (HVAC) systems. These costs aren’t typically covered by homeowners insurance, which pays for damage to your home’s structure or your personal property. Premiums vary, ranging from $25 to $150 a month, depending on the level of coverage, says Viktoriya Cully, director of underwriting, warranty and specialty risk at AmTrust Financial.
In addition to the premium, you can expect to pay what’s known as a trade service call fee, which is a fixed charge you incur every time you request a service call. This fee, which is similar to an insurance deductible, averages $75.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Should you buy a home warranty?
A home warranty may be beneficial if the manufacturer’s warranties on most of your appliances have expired or you have older appliances that break down often, says Robert Washington, a real estate broker with Savvy Buyers Realty in St. Petersburg, Fla. However, if you have a newly built home or brand-new appliances that are still under the manufacturer’s warranty, a home warranty probably isn’t worthwhile. You should also consider whether you’re better off putting the money you would spend on premiums in an emergency fund, which would earn interest and be available for other expenses, too.
Because home warranty providers send service technicians to you, you won’t have to worry about finding someone to make repairs. That can be a drawback, however, if you’re not happy with your provider’s technicians. In addition, warranty companies often impose limits on the amount they will pay for repairs and replacements, so you may end up with a lower-quality appliance than you would buy on your own.
If you decide that purchasing a home warranty may be worthwhile, you can search for providers and check customer reviews on the websites of the Better Business Bureau, Angi, BestCompany and Trustpilot.
Most contracts require you to wait 30 days from the time you obtain the warranty before filing a claim. This measure is designed to prevent customers from filing a claim for a preexisting problem. When you file a claim, the warranty company will typically send a technician within two days to diagnose the problem. If it’s a minor issue, the technician will usually fix your appliance on the spot. If more work is required, you’ll have to schedule follow-up visits, and you’ll be charged a service fee for each one.
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
Related content
-
Ask the Editor — Tax Questions on the New Senior DeductionAsk the Editor In this week's Ask the Editor Q&A, we answer tax questions from readers on the new $6,000 deduction for taxpayers 65 and older.
-
These Summer 2025 Back-to-School Tax-Free Weekends Are Starting NowSales Tax Over a dozen states offer back-to-school shoppers a sales tax holiday this summer.
-
Do You Need Flood Insurance? I'm an Insurance Expert, and Here's Where You Can Get ItStandard homeowners insurance does not cover flood damage, so you might need separate flood insurance, which you can get either through FEMA or private companies. Here are the details.
-
I'm an Investment Professional: These Are the Three Money Tips I'm Giving My College GradCollege grads can help set themselves up for financial independence by focusing on emergency savings, opting into a 401(k) at work (if it's offered) and disciplined, long-term investing.
-
3 Things Dave Ramsey Says to Stop Buying — and 2 That Are Worth ItDebt-free living starts with smart choices. Here's what Ramsey says to avoid and where your money is well spent.
-
Five Big Beautiful Bill Changes and How Wealthy Retirees Can BenefitHere's how wealthy retirees can plan for the changes in the new tax legislation, including what it means for tax rates, the SALT cap, charitable giving, estate taxes and other deductions and credits.
-
This is the Best CD to Get Amid Rate UncertaintyThis CD helps you earn more than 4%, with quick access to your cash if you need it.
-
Is It Time to Cut the Cord on Your Landline?With rising costs and evolving technology, many are rethinking their home phone service. Here's how to decide if it's time to let go.
-
Can AI Help With Your Finances?ChatGPT and other artificial-intelligence tools will streamline certain tasks, but don't count on them to get everything right.
-
Neglecting Car Maintenance Could Cost You More Than a Repair, Especially in the SummerWorn, underinflated tires and other degraded car parts can fail in extreme heat, causing accidents. If your employer is ignoring needed repairs on company cars, there's something employees can do.
