Is a home warranty worth it?

Updated 5 months ago ​by Open Listings

What it covers: 
A home warranty typically provides coverage for air conditioning units, heating furnaces and other home appliances/systems like the oven or range if they fail due to normal wear and tear.

Additional coverage can be purchased to cover the swimming pool and spa pumps. Note that coverage typically lasts only one year.

Don't mistake home warranties for home insurance. 
Home warranty policies are often confused and conflated with homeowners insurance. 

While the former focuses coverage on appliances and systems, the latter can protect you in the event of major damage to your home. 

While the home warranty is often one more check that is folded into closing costs, few realize that it not always necessary and can just as easily be bought at a later date.

Who should pay - buyer or seller? 
While it’s a common practice for the seller to pay for a home warranty, excluding it or having the buyer pay might entice the seller. This is especially important in a competitive situation where the seller has received multiple offers.

How to choose a home warranty provider: 

  • Select a company licensed by the state, and check with the licensing agency about any registered complaints against the company (Yelp is great for this).
  • By following this strategy, you can compare the history of several warranty companies. 
  • Ensure that the policy covers the specific items you want protected. Certain policies might require a supplement to to cover a specific item, such as an air conditioner. 
  • Make sure to read the fine print of your policy to see if there are exclusions or caps.