Should I Renew My Home Warranty? [Complete 2024 Guide]


Most new homeowners will acquire a home warranty that covers replacements of appliances, repairs on the structure, and coverage of other items like pool pumps and freezers. But after the initial period, which is usually a year, you might ask ‘should I renew my home warranty?’. The answer to this question isn’t as straightforward and simple as it seems.

To help you make an informed decision when revising your home warranty, we’ve compiled a guide to help you through the process. We’ll cover the following factors:

  • Home warranty definition
  • What to consider when renewing a home warranty
  • Questions to ask yourself when renewing a home warranty
  • Pros and cons of a home warranty
  • When to pass on a home warranty
  • FAQs

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What to Consider When Renewing a Home Warranty

At the end of this one-year contract, you are left with the option of either renewing your home warranty or canceling it. Here are a few things you have to consider when you decide to renew the warranty:

Cost and Additional Expenses

At first, you might not have been charged for a warranty, apart from an additional service fee. The one-year plan is usually included when you initially buy the house. After it expires, you might need to pay an additional monthly or annual fee for its renewal.

So, how much does a home warranty cost? Most home warranty companies have two primary costs: a monthly or yearly premium fee and a once-off service cost.

Monthly Cost

The monthly cost usually ranges between $28 and $85 depending on which company you decide on as well as which plan you choose.

Service Fee

The service fee is a once-off payment you incur every time a technician has to come to your home or whenever you submit a claim. This service fee ranges between $50 and $125 depending on your location and home warranty provider.

Do consider the additional fee expenses that you should pay for replacements and repairs. If it will cost you more for multiple service calls than just replacing an appliance, then you should reconsider the specific plan. Many home warranty companies will apply short-term solutions for fixing and repairing broken systems, instead of replacing the entire system that will result in a long-term solution. This will ultimately result in much more house calls and extra service fees. So, be careful when you choose a home warranty policy provider.

Condition of Appliances and Systems

Repairing and replacing old appliances and systems can be quite costly. Therefore, you should consider the condition of the electrical systems and appliances in your home. If they are worn out or are going to need maintenance soon, then it will be a good idea to get an extended home warranty.

Consider the condition of your HVAC systems that include the air conditioners, geyser, and heat pump as well as the pool’s filter motor, ceiling fan, ductwork, and garage door opener. Other systems that might be in a bad condition are the electrical gate opener, refrigerator, clothes washer and dryer, trash compactor, oven, and built-in microwave.

Should you buy an extended warranty on an appliance? If your appliances are still new, then they might not need extra coverage. New appliances like washers, dryers, ice makers, ovens, and cooktops may have their own warranties from manufacturers. In this case, you don’t need an extended warranty. But, if your appliances are old and not under warranty with manufacturers anymore, it’s best to extend your home warranty.

Depending on the condition of your systems and appliances, you can consider either getting a systems plan only, appliance plan only, or a combination of both appliances and systems plan from providers. Consider whether the system will need replacement or only maintenance within the coming year. Wondering whether you should replace your A/C unit? Check out this list of signs that it’s time to get a new unit.

House Age

Your property’s age is a major factor to consider. Older homes will most likely have older HVAC systems and A/C units. When these systems are older, they will increase your electrical bills and cost you a lot in service and maintenance fees.

So, are home warranties worth the money? Absolutely, if having that extra home warranty coverage will give you peace of mind that the plan will cover the costs of a complete reinstallation.

A home warranty renewal cost will be worth it in the long run. If you consider that an old A/C unit’s repairs can cost between $280-$1,000 per maintenance visit and a new system installation can cost $2,000 and higher, spending between $28-$59.99 per month on a home warranty is cost-saving.

Do keep in mind that if your current home warranty has expired, that you will have to wait up to 30 days for a new warranty to come into effect. This means that within this 30-day waiting period, you can’t make any claims.

Questions to Ask Yourself When Renewing a Home Warranty

There are a few questions you have to ask yourself if you want to renew your home warranty.

How Much Does a Home Warranty Cost?

The better the warranty company, the more it covers, and the bigger the cost. However, with most of them, you get to choose what you need coverage for. Here’s the list of the best ones, in case you decide not to renew the contract with your current one. Some of the top contenders are:

  • AFC Home Club: Monthly premiums between $43-$60 and service fees between $75-$125. Read the full review here.
  • American Home Shield: Monthly premiums between $50-$60 and service fees between $75-$125. Read the full review here.
  • Select Home Warranty: Monthly premiums between $36-$38 and service fees between $60-$75. Read the full review here.
  • Choice Home Warranty: Monthly premiums between $36-$44 and service fees between $60-$85. Read the full review here.
  • First American Home Warranty: Monthly premiums between $28-$43 and a service fee of $75. Read the full review here.

Should I Extend My Home Warranty if It Was Included in My New House Purchase?

This depends on the condition of your home systems and appliances and the age of the house. If you purchased a brand new home, it typically won’t have any pre-existing defects, whereas older homes might have some. In this case, you might not need to extend your home warranty – since all appliances and systems are still brand new.

If you haven’t used your warranty within the past year, you can consider the above-mentioned factors to decide whether a home warranty is worth it or not. Home warranties do give peace of mind. If you don’t want to pay large amounts for repairs and new HVAC system installations – then it’s worth the extra monthly fee.

Should I Extend My Home Warranty if I Didn’t Use It?

Home appliances and systems will deteriorate with time. Just because you haven’t utilized your home warranty within the past year, doesn’t mean you won’t need it in the future. A home warranty will save you money on repairs and installations. As well as saving you time finding a credible contractor who is qualified to help with the repairs you need.

Is a Home Warranty Worth It?

Yes, especially if you have an older home with aged systems and appliances, or need a quality company in a state with specific weather conditions, such as Alaska, then home warranty renewal is very worth it. Always compare the costs of replacing a system or appliance with the annual coverage paid to a home warranty provider.

Should I Renew My Home Warranty Plan Before It Expires?

Home warranty plans normally expire after a year. If you are satisfied with your current provider, then you can extend the warranty plan. But, if you would like to explore other options, then you should cancel the current plan and change your home warranty provider before your current plan expires.

If you’ve decided to change home warranty providers, you should take a close look at their terms and conditions. There might be some hidden fees when canceling your plan before it expires.

Some plans do take a few days, even weeks, to become active. After the plan has been activated, you might have to wait an additional 30 days before you can make a service call or claim. Make sure that you look at the fine print when signing a new home warranty contract to be sure of the activation date, especially if you have an older home.

Pros and Cons of a Home Warranty

With any type of coverage, there are definite benefits and downsides. Let’s take a closer look at home warranty renewal pros and cons:


  • Peace of Mind: Knowing that all your major appliances and systems are covered against everyday wear and tear will take unnecessary stress off your shoulders.
  • Saving Money in the Long Run: Paying minimum monthly fees will be worth it when a large HVAC system needs replacement.
  • Convenience: Home Warranty providers have contractors on call who will tend to any appliance or system breakdowns. This eliminates the tedious process of homeowners having to find repair and replacement contractors themselves.


  • Service Call Fees: Every time a technician is sent to your home, you have to pay a service fee. When you need more than one kind of technician, you will have to pay that service call fee to each of them.
  • Contract Specifics: Home warranty policy contracts are only as good as the provider you sign them with. There may be fine print in the contract that you missed that can result in dissatisfaction. Before you renew your policy, make sure you are completely aware of the contract specifics.

When Shouldn’t You Renew Your Home Warranty?

Even though home warranties are great safety nets to have, there are instances when you don’t need to renew them.

Brand New Home

If you’ve bought a home from a developer, it means that all the appliances and systems are still brand new. This also includes buying a newly constructed home. If you received a one-year warranty with the purchase of the home, then you don’t have to renew it after it expires.

You might only need home warranty coverage within a few years’ time, when the home has aged or if you want to resell it.

Not Satisfied With Current Service Provider

Don’t renew your home warranty if you aren’t happy with your current provider. Rather shop around for another provider and compare plans and pricing before renewing.

Wrap Up

A home warranty definitely gives a homeowner peace of mind. Having coverage for electrical appliances and home systems will save you money and time in the long run. Spending between $28-$85 per month on a home warranty renewal is better than spending hundreds of dollars on repairs, maintenance, and replacement costs.

Knowing that your home is protected against everyday wear and tear by renewing or extending your home warranty, is definitely worth it.


Will a home warranty replace old HVAC?

Depending on the plan and contract you choose, most home warranty service providers do cover the replacement of central heating systems, A/C units, mini-split systems, and heat pumps. However, they will try to repair them first, before replacing them.

Is a home warranty tax deductible?

Unfortunately, US residents don’t enjoy this benefit for their residential homes. Only when the property is an income-producing building like a business or an office, then the warranty is tax-deductible.

What does a $500 home warranty cover?

Paying $500 for home warranty coverage each year will typically include coverage for basic appliances like washers, dryers, refrigerators, and dishwashers. Also plumbing, electrical systems, and air conditioning.

Should I renew my home warranty?

This depends on a few factors that include the age of your house, the condition of your home systems and appliances, and your current home warranty provider.

1 Comment

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