when I purchased my first home. I was in heaven the ideal little home, just the right size, and plenty of DIY aspirations. But about half a year later, my water heater just failed. One shivering shower experience and I was looking at a repair bill that made my stomach turn. At that time, I wished I’d had something anything to assist with the expense. That’s when I first took a serious look at home warranties.

Home warranties may seem like one of those “maybe later” costs when you have all the other expenses of homeownership on your plate. But if you’ve ever been surprised by an unexpected repair bill, you realize how fast those costs can add up. In this article, I’ll outline five important reasons why a home warranty may not only give you peace of mind it could save you thousands.

What is a Home Warranty?

Before we get to the whys, let’s define what a home warranty really is. It’s not homeowner’s insurance. Insurance insures against fire, theft, or damage caused by the weather. A home warranty, however, insures the appliances and systems in your home such as your HVAC, plumbing, electrical, and major appliances — when they fail from ordinary wear and tear.

Here’s how it works: you pay an annual or monthly subscription, and when something malfunctions, you pay a minimal service charge to have an expert visit and fix or replace it. Simple enough, right? But is it worth it? Let’s delve deeper.

Reason 1: Appliances and Systems Always Break (At the Worst Time)

I recall one time when my friend’s furnace just died during the middle of a snowstorm. They had to hustle to find an emergency repair person, pay top dollar to get someone to come out on short notice, and then shell out almost $2,000 for repair. Ow.

The truth is, systems and appliances do have a lifespan. Your dishwasher ain’t gonna last forever, neither will your water heater, your air conditioner, nor your washer and dryer. When they fail, they tend to do it when you least want them to and when your budget’s already stretched thin.

A home warranty provides you with a safety net. Rather than freak out, you just call your warranty company, pay a known service fee, and have the issue taken care of.

Reason 2: You Can Prevent Large Upfront Expenses

When my water heater failed, replacement was about $1,200. I hadn’t planned on it, so I had to tap savings I’d set aside for another purpose (hey, delayed vacation).

With a home warranty, much of this is included under your policy. Rather than shelling out the entire replacement or repair cost, you simply pay the service call fee usually between $60 and $100. That may be the difference between a painless expense and a headache.

Another friend of mine told me how they skipped paying close to $3,000 for an HVAC replacement since their home warranty paid for it. Without the policy, they confessed they’d have had to take a loan.

Reason 3: Makes It Easy to Get Trustworthy Contractors

If you’ve ever frantically searched for a reliable plumber, electrician, or HVAC repair person, you know how anxiety-inducing the experience is. You’re scouring the web, reading reviews, praying you’re not going to get ripped off.

With a home warranty, the company typically has a list of pre-approved service technicians. You put in one call (or fill out an online form), and they take care of it. You don’t have to go searching for a contractor or worry about being ripped off.

I found this feature appealing when my dishwasher began to leak. Rather than inquiring around or Googling continuously, I phoned my warranty firm, and they arrived in less than 24 hours. One less hassle in already busy week.

Reason 4: Adds Value to Your Home’s Resale

While I was looking for a house, I saw that listings with “home warranty included” made a positive impression. It’s pleasant assurance for the buyers, especially the ones concerned about what could go wrong after closing.

If you’re planning to sell your home in the next year or two, having a home warranty can make your property more attractive. It signals to potential buyers that you’ve been proactive about maintenance and that they’re protected if anything fails shortly after they move in.

One of my neighbors informed me that when they sold their house, including a one-year home warranty was what convinced a hesitant buyer to buy. It’s an inexpensive investment that can accelerate your sale and perhaps even make a slightly higher asking price worthwhile.

Reason 5: Peace of Mind

This is the most difficult to measure, but it’s also the most worthwhile. Having the assurance that you’ll never see enormous surprise repair bills means you can sleep better at night as a homeowner.

I know for me, once I purchased a home warranty, I felt at peace. It didn’t cover everything under the sun, but it meant that I wasn’t always dreading the possibility of the next appliance breakdown costing me an arm and a leg. That reassurance allowed me to enjoy my home instead of worrying about it.

How to Choose the Right Home Warranty

Not all home warranties are equal. Here’s a quick step-by-step guide to choosing the right one for you.

Step 1: Evaluate Your Home

Examine the age and health of your key systems and appliances. If they’re mostly old, a home warranty might be worth the money. If they’re all new and still under manufacturer warranty, you might wait.

Step 2: Shop Around

Different providers offer different levels of coverage. Some cover only appliances, others cover systems, and some cover both. Make sure to read the fine print know what’s included, what’s excluded, and what limits apply.

Step 3: Check Reviews

Look up reviews and ratings for the warranty companies you’re considering. Pay attention to customer service, claim approval rates, and ease of use.

Step 4: Understand the Costs

Besides the yearly premium, check the service fee you’ll pay for each claim. Balance the cost of the warranty with how much you’d potentially save on repairs or replacements.

Step 5: Ask Questions

Don’t be afraid to call and ask the provider specific questions about their coverage. Clarify gray areas now rather than later when you’re facing a problem.

From my own experience and from the experiences of countless friends and neighbors I’ve discovered that a home warranty isn’t a separate bill. It’s a resource that can shield you from financial shock, provide peace of mind, and make homeownership easier to handle.

If you’re a new home buyer, or if you’re nervous about your older appliances and systems, it’s something to consider. You’ll never need it but if you do, you’ll thank yourself that you have it.