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Are Home Warranties a scam?​

Home warranties are often marketed as a way to protect homeowners from unexpected and costly repairs to their homes' major systems and appliances. However, many people wonder if these warranties are worth the cost or if they are just a scam. In this article, we will explore what home warranties are, how they work, and whether they are a scam or not.

Are Home Warranties a scam

What Are Home Warranties?

A home warranty is a contract between a homeowner and a warranty company that covers the repair or replacement of major systems and appliances in the home. These can include things like the heating and cooling system, plumbing, electrical, and kitchen appliances. The homeowner pays an annual or monthly fee for the warranty, and if something breaks down, they can call the warranty company to have it repaired or replaced.

How Do Home Warranties Work?

When a homeowner has a problem with a covered system or appliance, they call the warranty company to file a claim. The warranty company will then send out a contractor to diagnose and repair the problem. If the contractor cannot repair the problem, the warranty company will typically replace the item.

Home warranties typically have limits on the amount of coverage for each item and a deductible that the homeowner must pay before the warranty company will cover the repair or replacement. Homeowners should carefully read the terms and conditions of the warranty before signing up to understand what is covered and what is not.

Are Home Warranties a Scam?

The answer to this question is not straightforward. Some people find home warranties to be a valuable investment, while others feel that they are a waste of money. Here are some of the pros and cons of home warranties to help you decide if they are right for you.


  1. Peace of mind: A home warranty can provide peace of mind to homeowners who are worried about unexpected repairs to their home's major systems and appliances.

  2. Cost savings: Home warranties can save homeowners money on costly repairs or replacements, especially if multiple systems or appliances break down within a short period.

  3. Convenience: Homeowners do not have to spend time researching and finding a reputable contractor for repairs or replacements. The warranty company will typically handle all of that for them.


  1. Limited coverage: Home warranties often have limits on the amount of coverage for each item, and some items may not be covered at all.

  2. Deductibles: Homeowners must pay a deductible before the warranty company will cover the repair or replacement. Depending on the deductible amount, it may not be cost-effective to file a claim for minor repairs.

  3. Exclusions: Some warranties exclude coverage for certain types of damage, such as damage from natural disasters or neglect.


Home warranties are not necessarily a scam, but they are not right for everyone. Homeowners should carefully evaluate their options and read the terms and conditions of the warranty before signing up. It is also a good idea to research the warranty company and read reviews from other customers to ensure that they have a good reputation for customer service and honoring their contracts.

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