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Home Warranty or Extended Warranty: Important Things You Need to Know


If you have multiple expensive appliances at home, it’s only natural to avoid paying a large amount of money for their repair. But the risk of even the best tech breaking down is very high, so this might be unavoidable.


One of the possible solutions is to cover these items with a warranty that will either reduce or completely pay for any fixes. All brand-new devices today come with a manufacturer’s warranty and some other legal protections. However, those will run out, usually within 6-24 months, depending on the device.


Extended and home warranties offer you a chance to extend that coverage not only in time but also protect you in cases of breakdowns not caused by the appliance’s defects (this is what a manufacturer warranty is focused on). However, as both these protection options have some severe limitations, some people might not need either of them.


Differences Between a Home Warranty and Extended Warranty

Home and extended warranty plans are similar in principle. Both of them offer coverage for appliances in case of a breakdown. However, an extended warranty acts as an extension of the manufacturer’s warranty.


This means that it makes that original protection longer and can cover types of breakdowns not included in it initially. Extended warranties can be offered by manufacturer’s retailers or independent service providers.


But you need to understand that due to the nature of this policy, it only covers a single item. This means that to protect all appliances in your home, you will need to purchase a separate extended warranty plan for each of them.


A home warranty plan, on the other hand, is comprehensive. It can not only cover a wide range of appliances, from fridges to AC units and heaters, but also important home systems, like plumbing, ventilation, etc.


These plans vary greatly, so it should be possible to find or create one that will be a perfect fit for your home. The latter is possible because many providers offer optional coverage for a variety of items so homeowners can customize the protections for their property. However, looking at cost breakdown, you will see that adding optional items to the plan can change its price significantly. Therefore, you need to make sure that you really need all of them covered.


It might be tempting to protect every appliance and system within your home. But is it really necessary?


Home Warranty Vs. Extended Warranty: Do You Need Either?

First of all, you need to decide whether a home warranty or an extended warranty plan will suit you best. In this contest, home warranties win by a large margin. Extended plans are highly inefficient and purchasing several of them will result in a total that will, likely, exceed the yearly cost of a premium-grade home warranty plan. You will also get boggled up with paperwork if you need to manage over a dozen plans.


Therefore, a home warranty is a definite favorite for homeowners who want to get some protection in case of unexpected breakdowns of their home systems and appliances. But you should understand that these plans have limitations too. In fact, even the Better Business Bureau warns US residents that while beneficial, home warranties aren’t for everyone.

The main reasons for this are:

These plans have payout limits, which aren’t that high. This means that they will cover only a fraction of expensive repairs and might not cover replacements at all.
Home warranty premiums can get too high, depending on the type and condition of the systems and appliances you want to cover with the plan.
You might feel like you are wasting your money when none of the breakdown of the covered items.
Some home warranty companies cannot be trusted and they won’t honor the contract, thus leaving you to pay for repairs out of pocket. This means you will waste even more money.


To avoid wasting your money, you should study home warranty plans very carefully and only buy the one that has reasonable coverage maximum limits. The company you purchase this protection from also needs to be trustworthy, so you should study many professional and independent reviews.


But even a good plan from a reliable provider won’t be much good if your home isn’t a suitable fit for a home warranty. People who definitely cannot benefit from it are those living in older houses and using appliances that aren’t in top shape. In this case, not only will your premiums get high, but you will also need to accept that some necessary repairs, induced by wear and tear, might not be covered by the plan.


This plan makes much more sense if your property and appliances are new and repairing them will be expensive. However, as durability is one of the priorities for modern tech manufacturers, you might never need to use that home warranty coverage. Therefore, you’ll be paying that annual fee for nothing.


Now, think about your personal situation, is this expense worth reducing the risk of paying for a big repair? If you believe so, consider buying a home warranty plan. But if you aren’t sure, hold off to do more research on the subject.


Author’s bio: I’m Agatha, owner of blog and a mother of two. I’m also one of those people who love their homes dearly. I always stay open to new ideas and expertise to make my writings handy and captivating for you.


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