Home warranty ads make a big promise: when the dishwasher quits or the water heater gives out, somebody else pays the bill. Consumer Reports has looked closely at these contracts, and its advice comes down to one thing, which is to read the fine print before you sign. Here are 10 costs and rules to check first.
Think of this as a checklist for the kitchen table. Some items are about money, some are about what a company is allowed to refuse, and one is about a letter that may land in your mailbox.
You May Already Have Protection You Forgot About
According to a 2019 Consumer Reports guide, appliances in a newly built home are usually still covered by manufacturer and builder warranties, as consumer lawyer Edgar Dworsky points out. A home warranty, the guide says, is more worth considering for older homes and older appliances.
Your credit card may help too. Consumer Reports notes that some cards extend warranties, and that many American Express cards add up to 24 months of coverage on top of a manufacturer’s warranty of two to five years.
Prices Swing From One Town To The Next
Consumer Reports describes three kinds of plans: one for a single appliance, one for all appliances, and one for appliances plus plumbing and electrical systems. Prices vary by location and provider.
The guide gave American Home Shield examples from 2019. Major appliances ran about $480 a year in central Ohio and close to $600 with electrical and plumbing added, while in Westchester, N.Y., the same plans were $900 and $1,020. Your own quote will differ, but the gap shows why you should compare.
The Yearly Price Is Not The Whole Bill
Consumer Reports warns of extra costs, including a copayment of $60 to $125 each time a contractor does covered work, depending on the job. A couple of service calls can add real money to the premium.
Its 2026 consumer advice repeats the point: ask for the total cost, including service fees, before you agree to anything.
Your Refrigerator May Be Covered But Not The Ice Maker
This is where plans get tricky. Consumer Reports gives examples of gaps: a refrigerator may be covered but not its icemaker, and a hot-water heater may be covered but not the tank.
An oven may not be covered if it fails in self-clean mode or from a power surge. Katherine Hutt of the Better Business Bureau told Consumer Reports that most complaints come from people who misunderstand their coverage.
Skip The Upkeep And The Claim May Be Denied
Consumer Reports found that providers may deny claims for poor maintenance, improper installation, or a preexisting problem. That last one can apply even when you had no idea about the problem when you bought the plan.
Chuck Bell of Consumer Reports says providers build in “wiggle room” that makes denials easier. Keep your service records and installer paperwork in one folder.
A Replacement May Be Paid At Depreciated Value
If a repair costs too much, the provider may offer to replace the item instead. Consumer Reports cautions that the payment may be based only on the depreciated value of what you had.
In that case you would pay the difference to get the same model back. Ask in advance whether the company repairs or replaces, and how it figures the amount.
Payout Limits Can Cap What You Get
Limits depend on the plan and provider. Consumer Reports offers one example: over a 12-month membership term, America’s 1st Choice Home Club pays up to $2,000 to access, diagnose, repair, or replace each covered item.
A limit like that may or may not cover a new appliance. Find the number in your contract before something breaks.
Windows And Walls Are Usually Not On The List
Consumer Reports says plans generally leave out nonmechanical items such as windows or the structure of the home. Ads may promise protection that homeowners insurance lacks, so it pays to read the actual terms.
The guide describes home warranties as service contracts that pay for repair or replacement of covered items, such as appliances, plumbing, and heating and air conditioning, when they stop working. That is a narrower promise than many people hear.
A Letter Saying Your Warranty Is Expiring May Be A Scam
In a 2026 report, Consumer Reports warned about official-looking letters claiming your home warranty is about to expire, even if you never had one. Some list your mortgage company to look real.
Do not call the number on the letter. Contact your lender or warranty company at a number you know is genuine, and never share personal or financial information in response.
Consumer Reports Suggests Paying Yourself Instead
Consumer Reports has long recommended self-insuring: put the money you would spend on warranty premiums into a savings account set aside for repairs and replacements. You can also add it to your general emergency fund.
If you do buy a plan, ask what is covered, what is excluded, how much it pays, and whether items are repaired or replaced. A few minutes with those answers can save a lot of frustration later.
More Stories You May Like
- Thrift Store Prices Keep Creeping Up, So Check What The Item Costs New Before You Pay For A Deal That Is Really A Rip Off At The Register
- The Buyer Who Overpays By Check And Asks You To Send The Difference Back Is Running A Scam And Here Is How It Works
- Home Organizer Let Her Husband Take The Lead On Decluttering Their House And He Went Straight For Her Beloved Book Table