You Might Need a Home Warranty

home warranty

If you own a property, you need a home warranty. At first glance, it may seem like just an additional expense. However, it will probably save you more money than you can imagine.

What is a Home Warranty?

A home warranty is essentially a comprehensive extended warranty for your appliances. You pay a fee coverage you request in an annual payment or monthly payments. If you make a service request, you will pay a fee directly to the service provider. The service provider will assess the situation and repair or replace the appliance.


Foreclosures, new builds, and existing properties are eligible and I’ve had a home warranty with each. Some homes even come with coverage at the time of purchase. That’s what happened when I bought my first property. It was a bank-owned foreclosure but it included the warranty for one year. I had no clue what a home warranty was, but my realtor encouraged me to renew it every year. I was able to use it for various repairs during the five years that I owned the home. While I lived there, I rented out my basement and was able to write off the home warranty and repair expenses on my taxes.

Existing Home

After I sold that property, I vowed always to have a home warranty. In my second home, I didn’t expect almost all of the appliances to break down within two years. Thankfully, I made good on my promise and was able to use the warranty. I’ve had to replace the washer, dryer, dishwasher, air conditioner fan motor, and garbage disposal. In each situation, I only had to pay $100 for the service fee, or my home warranty company offered a credit to buy a new appliance.

The average cost of a new washer and dryer is around “,000. A new dishwasher can cost between $400 and $700, so I will estimate $550. The cost of an air conditioner fan motor is between $300 and $600, so I will approximate $450. The cost of a new garbage disposal unit can vary widely so I will say $200. I will estimate one hour of labor for installation at $20 per hour for each item for an additional $100. The total is $2,300 based on average costs and a very conservative installation estimate. I might have spent $1900 for everything, including my annual fee. I also have a renter in this property, so I have reduced my tax liability again.

home warranty

New Build

In both of the earlier scenarios, the homes were about 30 years old. When I purchased a new build, it came with a 10-year homebuilder structural warranty through the same company I had been using for years. The structural warranty covers the foundation, framing, and load-bearing structures of the home. I was able to include the appliances for an additional $300 or so per year. As per my trend, this property also has a renter so that extra cost continues to reduce my tax liability while reducing my repair costs. I haven’t used it, but I will continue to renew it.

My situation may be unique, but my home warranty has proven to be priceless. I encourage you to research home warranty options and compare their costs to what you have been paying for repairs over the years.

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