Dave Ramsey And A Home Warranty: 4 Things You Need to Know

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Don’t you hate it when you just purchase something brand new in the house and all of a sudden it breaks?

Well, I do!

It can be annoying to deal with and worry about the cost of replacing it. Especially if it is something expensive you just purchased. That is why many people decide to get a home warranty to not have to worry about examples like that. So what does Dave Ramsey know about the home warranty? Let’s see what he has to say about it and go from there. 

Article Summary:

Dave Ramsey believes a home warranty isn’t worth it. If you do decide to get a home warranty, my favorite is American Home Shield as their plan covers up to 23 appliances. They also state that if they can’t repair your covered item, they will replace it. That said, you should also consider their reviews before you go with a home warranty solution.

What is a Home Warranty?

To discuss further home warranties, we need to understand what is a home warranty? A home warranty is an annual service contract to secure yourself from more expenses of replacing and repairing anything that has to do with your house. Such as broken appliances and repairs. For a home warranty, you usually pay a fee to protect your home. It is great to use if you have unexpected problems with any of your appliances. It is also known to help save you more time and energy trying to get some random guy to come over and possibly fix it.

Though, let’s not get it confused with home insurance. There is a difference between a home warranty and home insurance. The difference is home insurance is supposed to cover bigger issues of your house. For instance, fire, tornado, or flooding of your home. These issues are more known for damaging the structure. Most of the time home insurance is what is required for mortgages. Though the cost of a home warranty may not be your favorite thing to look into. 

What Do Home Warranty Cost?

The cost of a home warranty can vary. The plan can cost from $200-$1,700 annually. Though it can be divided into a monthly plan to pay it off. As well as a service fee from about  $75-$125 when you have to call someone for a repair. It kind of sounds fishy doesn’t it? You are already paying for the home warranty plan but on top of that a service fee too. 

Now it depends on the type of property you live on and what type of home warranty coverage plan you are looking for. You also have to think about the extra fees you will be having to pay. Even though the home warranty says they can cover it, the work for it can cost more and you will still have to pay out of pocket. For instance, if your dishwashing machine suddenly breaks, the warranty would probably cover maybe half of the amount it cost you to buy it. If you think about it, the home warranty isn’t fully covering as much they may advertise to you in the beginning. Which can be annoying to deal with have to still have the other half of the cost to get it replace or fix.  

What Do Home Warranty Cover?

When looking into potentially buying a home warranty, it is important to know what it should cover. A home warranty can vary on what it covers depending on what type of plan you want and how much you are willing to pay. 

Home warranty usually covers:

  • Electrical systems
  • Plumbing
  • Washer
  • Dryer
  • Refrigerator
  • Heating 
  • Cooling system (HVAC)
  • Furnace
  • Hot water storage tank
  • Swimming pool pump
  • Garage system

These are what most home warranty companies cover when purchasing a plan. Though the more you plan on having covered, the more expensive it will be. When you use your home warranty it is done through a report on what appliance of yours doesn’t work properly as it uses it. Then a contractor is sent to investigate and give feedback to the home warranty. Afterward, they send a service to help, though that’s when the problem comes in and you also have to pay for their service. You will have to pay a service fee that is not covered by your warranty. You will also get charged for another service feed when calling your warranty. This isn’t something you may like to deal with having to pay all these extra fees. Especially with what Dave Ramsey has to say about the home warranty.

Dave Ramsey On Home Warranty

So what does Dave Ramsey have to say about the home warranty? From Dave Ramsey’s perspective, he does not think it is worth it for any buyer and homeowner to get a home warranty. The thing is, a home warranty only covers the cheapest appliance you have. With the added cost and fees for service and still putting in your own money, it is not worth it. You are better off dealing with it yourself and calling the service on your own about it than paying extra. As well as use that money for emergency saving funds instead.

If you do decide to get a home warranty, my favorite is American Home Shield as their plan covers up to 23 appliances. They also state that if they can’t repair your covered item, they will replace it. That said, you should also consider their reviews before you go with a home warranty solution.

The only reason why you should ever get a home warranty is when you are a seller that needs a deal. It gains more audience attraction when selling a home adding the fact there is a home warranty on it. Anything else, Dave Ramsey does not want you to buy a home warranty…period! Dave Ramsey recommends other ways that are better alternatives than buying a home warranty. Such as, making an emergency fund worth three to six months.

This is also something you can do while working on Dave Ramsey’s 7 baby steps. Check out to see if the appliances that you have purchased have their warranty. Look into your appliances too to make sure everything is good. The lifespan of those appliances is important so it is a good idea to always maintain them and take good care of them. So, just stick with what you have for now and listen to Dave Ramsey on better opportunities instead. 


Dave Ramsey may not love home warranties or potentially even extended warranties, but the purpose of this article is to give you as much information to make the most informed decision.

Hopefully, you have the tools to make the most informed decision about a home warranty for your home.

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