What does a home warranty really get you?

Major home appliances are costly to repair and expensive to replace. That's why many people spend hundreds of dollars a year to buy a home warranty, sometimes called a service contract.

Home warranties are supposed to provide peace of mind.

Cheryl Reed with Angie's List says plenty of people are happy with their warranty company and the service they get. But many others wind up disappointed and frustrated when something breaks.

"The ones who are not happy are the ones that didn't understand how the warranty worked and when they went to use it, they were disappointed when their expectations weren't met."

Reed says that expectation gap can often be eliminated if the homeowner reads the warranty to know what's covered and how the process works.

For example:

  • You don't get to pick the repair technician, the warranty company does. If you have a trusted plumber, electrician or appliance service, a home warranty may not be for you.

  • You don't get to decide whether the broken appliance is repaired or replaced - they do.

  • There's also a charge, normally $50 to $100 for each service all.

For more information

Home warranties don't always provide peace of mind

National Home Service Association: Frequently Asked Questions

Angie's List: 4 tips to avoid warranty woes

Angie's List: 'Whats covered in a home warranty?