📊 Is a home warranty worth it compared to self insuring?

Deciding whether to buy a home warranty or self-insure with cash is a major financial choice for homeowners. This calculator helps you compare the true cost of a home warranty against just self-insuring with an emergency fund. As Sarah (Budget Girl) explains, the theoretical savings vanish when you account for extreme delays and hidden costs.

Home warranties charge an upfront annual premium plus a service fee every time a technician comes out. While minor fixes initially seem like a bargain, the ongoing costs add up quickly.

As Sarah (Budget Girl) puts it, renewing her home warranty at her own cost which would be eighty-five dollars a month or a thousand twenty dollars for the year. And every time you do a service request you have to pay a 75 fee.

Estimate how many things will break in your house this year. Minor fixes like a garbage disposal or unclogging a drain might cost $250 out of pocket if you hire a local pro. Major replacements like a fridge, washer, or AC component can easily be $1,500+.

As Sarah (Budget Girl) notes, she would rather just spend 1500 bucks next time to get a new fridge then go through all of that.

This is the real catch. Warranty companies source their own parts globally and are notorious for dragging their feet. As Sarah (Budget Girl) notes, the moment that you venture over into replacement or having to order any parts for something, you're screwed.

During those three weeks they were without a fridge, they spent a thousand dollars on eating out. When her AC broke, she ended up having to cancel that acs request and call a local ac person and pay 350 bucks.

Based on content by Sarah (Budget Girl) on Budget Girl (YouTube).

Original: Are Home Warranty companies worth it or a ripoff?-- my American Home Shield nightmare and victory!