Is an Appliance Extended Warranty Worth It?

Are you looking into an appliance extended warranty? Read this guide to learn about this type of coverage, its cost and how it differs from a home warranty. | Photo Credit: Adobe Stock

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An appliance extended warranty can help you save money on expensive appliance repairs or replacements if your item breaks due to normal wear and tear. This coverage builds on a manufacturer’s warranty, providing additional coverage for your appliance after the manufacturer’s warranty expires.

While an appliance extended warranty offers some helpful protection, a home warranty covers a broad array of major appliances and systems in your home. For comprehensive protection, we recommend American Home Shield, a home warranty veteran with more than 50 years of industry experience.


What Is an Appliance Extended Warranty?

Many homeowners get confused about the difference between an appliance extended warranty, a manufacturer’s warranty and a home warranty. Here is a summary of each type of coverage.

  • Appliance extended warranty—Extended warranties cover specific appliances in your home and are purchased before the original appliance warranty expires. The coverage details are similar to those laid out in a manufacturer’s warranty, though an appliance extended warranty can be purchased from third-party providers.
  • Manufacturer’s warranty—A manufacturer’s warranty is protection that is included in the purchase of a system or appliance. Its coverage is similar to a home warranty, though it typically expires after a few years.
  • Home warranty—While an appliance extended warranty and a manufacturer’s warranty cover a specific appliance or system, a home warranty provides comprehensive protection for a variety of items, including refrigerators, washing machines, ovens, ranges, dryers, water heaters and air conditioners.

Below is a quick comparison of the three different types of coverage.

CoverageManufacturer’s WarrantyAppliance Extended WarrantyHome Warranty
CostFree with purchase of an appliance or system$20–$120 per year$300–$600 per year
ProsCovers damages caused by design flaws or defectsProvides homeowners with additional coverage for a specific appliance after the manufacturer’s warranty expiresProtects a range of essential home systems and appliances and can be renewed year after year
ConsExpires after a certain period, typically within one year of purchaseDoesn’t cover additional systems and appliances in your homeMore expensive than an appliance extended warranty

Why We Recommend Home Warranties

While an appliance extended warranty can be helpful if you just bought a new appliance, we recommended choosing a home warranty policy for complete system and appliance protection. A comprehensive plan from a top home warranty provider protects a variety of important systems and appliances, including your air conditioning, dishwasher and refrigerator, regardless of their age.


What Does a Home Warranty Cover?

The systems and appliances that a home warranty covers vary from provider to provider. Here’s a list of the most common items protected under a company’s most comprehensive plan.

  • Air conditioning system
  • Heating system
  • Electrical system
  • Plumbing system
  • Water heater
  • Refrigerator
  • Oven/Range/Stove
  • Cooktop
  • Dishwasher
  • Built-in microwave
  • Garbage disposal
  • Clothes washer
  • Clothes dryer
  • Garage door opener

Many top home warranty companies also offer a list of optional coverage items that can be added to any plan for an extra monthly cost. Here’s a list of popular optional add-ons:

  • Garage doors and door tracks
  • Windows, walls and doors
  • Sprinkler systems
  • Window air conditioning units
  • Sump pump
  • Well pump
  • Septic system

How Much Does a Home Warranty Cost?

The cost of a home warranty varies from provider to provider, though all service plans can be broken down into two expenses: monthly rates and service call fees. While a monthly rate is the recurring cost of coverage, a service call fee is paid when a contractor is dispatched to your home to repair or replace a damaged item.

In general, monthly premiums run between $25 and $60, while service fees range between $75 and $125. It’s important to note that the cost of your monthly plan rate can decrease if you choose a higher service call fee and increase if you select a lower one.


How Does a Home Warranty Work?

If a covered home appliance or system breaks due to normal wear and tear, you can file a claim by calling your provider or filling out a claims form on the company’s website. Once the claim is processed, an authorized service technician will be sent to your home to evaluate your issue. At this time, a repair or replacement will be scheduled and you’ll owe the contractor your set service fee.

Typically, home warranty providers don’t place a limit on the number of claims you can file; however, many companies cap the amount of money available to you for covering a damaged system or appliance. For example, a provider may cap yearly air conditioning coverage at $2,000. If you have any air conditioning repairs that exceed this amount, you will be responsible for the payment.


What To Consider Before Buying an Extended Warranty

Before purchasing an extended warranty, consider the following factors:

  • Understand your existing manufacturer’s warranty—Most new appliances and systems include a manufacturer’s warranty. Check to see how long this included coverage lasts to determine if you should purchase additional protection.
  • Read a sample contract—Always read a contract’s terms and conditions before committing to an appliance extended warranty. All reputable providers will share a sample contract, which will list the coverage you’ll receive and the terms of your warranty.
  • Consider the cost of repairs—For smaller appliances, such as a microwave, it may cost more to pay for coverage than for out-of-pocket repairs or replacements.

Our Top Home Warranty Recommendations

A comprehensive home warranty gives you peace of mind that your home’s essential appliances and systems are protected if they break due to normal wear and tear. For quality coverage, we recommend American Home Shield, Select Home Warranty and Choice Home Warranty.

American Home Shield offers three comprehensive coverage plans, allows customers to select between three service call fees and has more than 50 years of experience in the industry. Select Home Warranty offers three affordable plans and is a great pick for those on a budget. Choice Home Warranty is best for people with aging homes, as the company doesn’t deny coverage based on the age of your systems or appliances.

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Frequently Asked Questions

Are extended appliance warranties worth it?

While an extended appliance warranty might be useful for homeowners who just need coverage for a single appliance, such as a refrigerator or dishwasher, we recommend home warranty coverage for those who want protection for all of their home’s appliances and systems.

How long does an appliance warranty last?

Appliance extended warranties typically last for one year and are renewable each year.

How do I find the best home warranty?

To find the best home warranty, it’s important to do your research and receive quotes from multiple providers. This will help you compare costs and coverage details in your area. In addition to receiving multiple quotes, look into potential providers’ service contracts, which detail important information such as coverage caps, service fees and contractor requirements.


Home Warranty Rating Methodology

To help you find the best home warranty, our reviews team researched numerous home warranty companies, analyzing their coverage plans, pricing and customer service, among other factors:

  • Coverage: Home warranty companies that provide extensive coverage and protect important systems and appliances, including your air conditioning, refrigerator and heating, scored higher than companies with minimal coverage.
  • Plan variety: A provider with more coverage plans allows for more flexibility among customers. In general, most home warranty companies provide an appliances-only plan, systems-only plan and combination plan.
  • Pricing: We scored providers based on their monthly plan prices and service call fees compared to the industry average pricing. Companies with more affordable coverage received more points than companies with more expensive plans.
  • State availability: Where you live will determine what companies are available in your area. Home warranty companies that covered more states received more points than companies with a limited state availability.
  • Trustworthiness: There are some home warranty companies that are scams and don’t follow through on their service agreements. We rated companies based on their years of experience, ratings on the Better Business Bureau (BBB) and customer reviews.

To keep our data current, our team regularly updates the data points for each company to ensure their coverage offerings, pricing and availability are accurate.

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