Benefits of Having Home Warranty


The benefits of having a home warranty are numerous. Protection against disasters big and small provides both a sense of personal comfort and financial security so coveted in an unpredictable world.  Even under normal circumstances, however, accidents and issues occur inside a home. A home warranty helps protect against appliance breakdowns, electrical outages, water damage and more.

There are also benefits specific to buyers and sellers, respectively. While largely financial, the presence of a home warranty can make or break final sales by providing an extra level of value for both sides during negotiations. This, of course, also benefits the real estate agents brokering the sales.

Home warranties provide added protection for repairs and replacements not covered by homeowners insurance policies. They do not cover everything, however, and cannot be relied on as the only source of coverage protection for your home. Read on to learn more about the benefits of having a home warranty, what one costs and what providers are the most popular. 

What Is a Home Warranty?

A home warranty is an official agreement between the warranty provider and the person or persons owning the home. There is a difference between a home warranty and homeowners insurance. Insurance covers damage and/or theft affecting the entire construction of the home and possessions within it. A home warranty offers reduced pricing for repairs and replacement of principal systems within the home such as heating and air conditioning, electrical and plumbing. Some home warranties also cover various major appliances.

The home warranty provider also has agreements with specific service technician providers and repair specialists. This makes it easy for homeowners, buyers and sellers alike to find qualified repair technicians. Conversely, this does limit available options if the repairs or replacement items are to be covered by the warranty. Once a repair or replacement is determined and agreed to be necessary, the cost to the warranty holder is usually limited to a nominal service charge. The actual cost of the repairs or replacements is covered under the warranty. 

How a Home Warranty Benefits Buyers

Buying a home is one of the biggest decisions you make. Many important details are considered when making such a large purchase, not the least of which is your budget. Considerations for the down payment, mortgage payments, closing costs, job security and general monthly expenses are all paramount. Knowing there is a home warranty helps prevent major budget issues in the event of sudden repairs or replacements in the home.

Additionally, most home warranties include around-the-clock customer and technician service support. There is usually no limit on the amount of available requests. Finally, the stress of finding the right repair service is eliminated because the warranty provider already has agreements with qualified technicians.

How a Home Warranty Benefits Sellers

Having a home warranty helps sellers maintain and potentially even increase the market value of their homes. The majority of last-minute issues no longer pose a threat to the selling process. Sales close on time without threat of postponements due to systems or appliances breaking down mid-sale. Financially, buyers are more comfortable putting their best offers on the table, which leads to higher sales prices and more profit for the sellers.

How a Home Warranty Benefits Real Estate Agents 

Real estate agents also benefit from the presence of a home warranty on their listed properties. When the buyer and seller are both comfortable and happy, home sales transactions are smoother and generally more financially beneficial for all involved. Listing a home including a warranty attracts more buyers, knowing they can have confidence placing bids. The real estate agent also engages in more confident sales pitches, knowing any potential or unexpected issues are covered by the home warranty.

What Do Home Warranties Cost? 

The cost of a home warranty is affected by various factors. Most providers do not readily list those costs on their websites and instead provide contact information where potential customers can email or call to request custom quotes. Homeowners can expect to pay an average annual premium of several hundred dollars in addition to service fees ranging from $75 to $125 or more. Service fees are charged each time a service technician makes a trade call, whether or not anything is actually repaired or replaced as a result.

Factors affecting the cost of a home warranty annual premium include the type of home being covered by the warranty and the type and depth of plan purchased. Home warranty plans also have upgrades and extended options. Similar to plane tickets, home warranties can generally be purchased in tiers of economy, business and 1st class prices.

Most Popular Home Warranty Providers 

As with most industries, certain home warranty providers stand out above the others as consumer favorites.

  • Amazon Home Warranty is consistently in the mix due to having a strong reputation among consumers. This warranty provider has over 950 customer reviews on the BBB and averages 4.5 stars and a solid B rating.

  • AMC HOME CLUB (AMERICA’S 1ST CHOICE) is not only popular, but also considered one of the best warranty providers in business. The company boasts being accredited with the BBB and named as an Inc. 5000 company in 2018. AMC HOME CLUB also offers club benefits, which include assistance with raising credit scores, financial advice, assistance with emergency services and more.

  • AMERICAN HOME SHIELD also consistently makes a showing in consumer ratings, in no small part to its selection of popular coverage plans. For a company carrying a popular reputation for reliability, turn to First American Home Mortgage. Consumers trust this warranty provider to be reliable in repeatedly providing quality coverage.
On top of the list for most affordable pricing is CHOICE HOME WARRANTY. Choice offers better prices than most of its competition in the business and provides services in 47 states.