Here’s How My Home Warranty Is Saving Me Money — and Peace of Mind

When I saw my future house hit the market one morning a few years ago, I knew it had to be mine. My partner and I toured it that afternoon and put in our offer the same evening. The main reason we felt confident moving forward and going under contract so fast? The seller was offering a home warranty with the purchase.

A home warranty is a protection plan that covers minor and major systems within your home. It can be great for first-time homebuyers, especially those purchasing an older home with aging plumbing, electrical, or HVAC systems. Though if you’re buying a new-construction home or already have savings allocated for unforeseen repairs, a home warranty may not be a worthwhile investment.

Premiums on home warranties can be paid monthly, annually, or bi-annually, and there’s usually a small fee any time you submit a service request. Our premium is $48 per month, along with a $75 service fee every time we need work done. Our plan covers damage to the following:

• Central air conditioning
• Attic and exhaust fans
• Ceiling fans
• Central vacuum system
• Clothes washer and dryer
• Dishwasher
• Ductwork
• Electrical
• Garage door opener
• Garbage disposal
• Heating
• Instant hot water dispenser
• Kitchen refrigerator
• Microwave oven (built-in only)
• Oven/range/cooktop
• Plumbing
• Plumbing stoppages
• Trash compactor
• Water heater

We’ve renewed our warranty plan every year since we bought our house. In five years of homeownership, we’ve paid $2,304 in premiums and have used the warranty, on average, once a year. Here’s the breakdown of how it’s been working.

Our air conditioner wasn’t blowing air inside the house, and ice was collecting on the unit outside. The service technician replaced a part and provided a copy of the invoice. We paid the $75 service fee, but if we didn’t have the warranty, the full total would have been $255.

Total savings: $180

After hearing the sound of running water in the bathroom, even when all the faucets were turned off, we realized we had a pipe leak in the wall. The plumber had to tear through the wall and replace a portion of the pipe, which cost $681. The home warranty also covered the cost of the drywall repair: $160. Again, all we paid was $75.

Total savings: $766​​

Once we noticed water dripping from the ceiling in the kitchen, we knew we had another leak on our hands. The plumber had to cut yet another hole in the ceiling to fix the leak, totaling $850. The warranty also covered the cost to patch the hole: $210. I’m assuming this repair was more expensive due to the location of the leak.

Total savings: $985

Thankfully, we’ve had very few electrical issues in the house. After a particularly bad series of storms, all the bathroom outlets stopped working. The electrician replaced a couple switches in our circuit breaker box and did some minor rewiring for what would have cost us $176.

Total savings: $101

The pipe under the kitchen sink started leaking water at the connection point to the garbage disposal. It was a quick fix; the plumber was in and out in less than 30 minutes, but the total on that invoice came to $150, which was probably their minimum fee for the visit + labor.

Total savings: $75

We had another issue with the air conditioner when it stopped blowing cool air in the house. The same company that handled the last HVAC repair came back out, and the repair costs were much higher this time: $492.

Total savings: $312

If we didn’t have the home warranty, we would have paid a total of $2,974 for all of those repairs. Instead, we paid $2,304 for monthly premium costs, plus service fees.

The total I would have paid if I didn’t have my warranty: $2,974
My total home warranty premium costs over time, plus six $75 service fees: $2,754

So far, we’re just about breaking even, with around $200 saved overall. Still, as new homeowners, it’s been extremely nice to have the peace of mind associated with a home warranty. I didn’t have to worry about budgeting for unforeseen costs for repairs. It made sense for me to have a warranty for the first few years of homeownership — and I think it’s a great deal if you can negotiate the cost of the first year into the sale.