Home Warranty Worth-It Calculator
Decide if a home warranty pays off by comparing the annual premium plus service fees against the repairs you actually expect in a year.
How it works
Without = claims × avg repair · With = premium + claims × service fee + (uncovered claims × avg repair) · Savings = without − with
A home warranty is worth it only when the repairs it actually covers exceed the premium plus per-claim service fees. The catch is coverage: warranties routinely deny claims for pre-existing conditions, code violations or improper maintenance, so a realistic covered percentage matters more than the headline promise. This model charges you the service fee on every claim and the full repair on the ones that get denied — the way it really plays out.
Worked example
A $600 premium with a $100 service fee and 2 expected claims at $450 each: without a warranty you’d pay $900. With 70% covered, 1.4 claims cost only the service fee and 0.6 are denied, so you pay 600 + 200 + 270 = $1,070 — meaning the warranty actually costs you $170 more this year.
Frequently asked questions
When is a home warranty worth it?
When you expect several covered repairs a year on aging systems and appliances, and the plan’s covered percentage is high. For a newer home with reliable equipment, self-insuring with a repair fund usually comes out ahead.
Why does the covered percentage matter so much?
Because denied claims cost you the full repair plus a wasted service fee. A plan that covers 90% of claims behaves very differently from one that covers 50%, and the fine print — pre-existing conditions, maintenance requirements — drives that number.
How is this different from an extended warranty?
A home warranty is an annual, renewable service contract covering many systems and appliances in a house; an extended warranty typically covers one product past its manufacturer coverage. The break-even logic is similar, but the home warranty’s recurring premium and per-claim fees make coverage rate the deciding factor.
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This calculator is for educational purposes. Double-check important results before acting on them.