Do You Need a Home Warranty?

When you buy a home, it’s easy to get swept up in the excitement of new keys, a new space, and new possibilities. But right alongside all those dreams of decorating and relaxing comes something more practical: the responsibility of maintaining your home’s systems and appliances. That’s where a home warranty might come into play.

For many buyers, a home warranty is included in the purchase, giving you peace of mind during that first year of ownership. After that, though, you’ll need to decide whether keeping that coverage makes sense. So, do you really need a home warranty? Read on to take a closer look.

A home warranty is not the same thing as homeowners’ insurance. Insurance typically covers major losses from events like fire or storms. A home warranty, on the other hand, is a service contract that covers repairs or replacement for specific systems and appliances that fail due to normal wear and tear.

Most standard home warranties cover heating and cooling systems, electrical systems, plumbing, water heaters, ovens, dishwashers, and washers and dryers. Some plans also offer optional coverage for items like pool equipment, refrigerators with ice makers, or even a second HVAC system. These policies are designed to ease the cost burden when something mechanical breaks down.

It’s common for home warranties to be included in a home sale, particularly in competitive markets or with older properties. Often, the seller will purchase a one-year home warranty on your behalf. This is seen as a gesture of goodwill and an extra layer of confidence for you as the buyer. If something breaks soon after move-in, you don’t have to worry about out-of-pocket expenses on top of everything else you just paid for. This coverage can be especially helpful during your first year living in a home, when you’re still getting to know its quirks.

Once that initial year is up, you’ll receive a renewal notice. This is where you need to make a decision: do you want to continue with the warranty or let it lapse?

Start by evaluating how useful the warranty was in the first year. Did you use it? Was the process smooth? Were the repairs completed quickly and effectively? Some homeowners feel the warranty pays for itself after just one or two covered issues. Others might be frustrated by limitations, deductibles, or slow service.

Next, consider the age and condition of your home's systems and appliances. If you bought a newer construction home, many components may still be under manufacturer warranties. On the other hand, if your furnace is over 10 years old or your dishwasher is showing signs of wear, you may be more likely to benefit from continued coverage.

Before you renew or buy a home warranty, it’s important to understand what’s excluded. Every policy has limitations and exclusions, and they can vary from one provider to the next. For example, most warranties won’t cover pre-existing conditions, improper installation, or items that haven’t been maintained properly.

You may also find that cosmetic issues or non-essential features (like refrigerator lights or spa jets) aren’t included. Plus, nearly all plans have coverage caps — meaning they’ll pay up to a certain amount per item or per year. Reading the fine print can save you from surprises later on.

A typical home warranty plan ranges from $400 to $800 per year, depending on the level of coverage and add-ons. You’ll also pay a service fee (often around $75–$150) each time you request a repair. The idea is that this predictable cost helps you budget more easily and avoids the sting of unexpected repair bills.

To decide whether the cost is worth it, think about your risk tolerance and your ability to cover surprise expenses. Would a major repair set you back financially? If so, a warranty might give you peace of mind. On the flip side, if you have an emergency fund and prefer to pay only for services you use, self-insuring might be a better choice.

If you decide to purchase or renew a home warranty, don’t just go with the first option that comes up. There are dozens of companies offering various plans, and the differences between them can be significant. Some offer faster response times. Others are known for better customer service or more generous coverage.

Be sure to read online reviews and compare what’s covered, the service fees, claim limits, and any upgrade options. Pay close attention to how claims are handled — some companies allow you to file online, while others require phone calls during business hours. The more seamless the process, the more likely you are to feel confident about the investment.

Ultimately, the choice to carry a home warranty comes down to your priorities. Are you looking for convenience and predictability? A warranty could give you peace of mind. Do you value control over service providers and trust your ability to handle emergencies? In that case, you may be better off self-insuring and handling any issues as they arise.

There’s no one-size-fits-all answer. What matters is finding the balance that fits your comfort level, budget, and lifestyle. And remember, you can revisit this decision each year — you’re not locked into it forever. Before you sign up or renew, take a look at your home, your habits, and your comfort level with repairs. The right decision is the one that gives you confidence in managing your home, with or without a warranty.

For expert guidance as you achieve your homeownership goals in Rockville, MD, reach out to Argent Realty.