When we purchased our home, the seller included a home warranty as an incentive. A few months later when our water heater broke, we found out just how useless a home warranty is. During a repair, you generally have to use a contractor that has a relationship with the warranty company. In our case, that meant dealing with a plumbing company that did a pretty lousy job. The warranty did, technically, cover the cost of the replacement water heater, but the labor and additional parts used in the repair were not covered. As you may be able to guess, the charges for those items were hugely inflated (in one case $300 for a $40 part). In the end we spent just as much for the repair as we would have without the warranty had we been able to shop around for plumbing contractors. My advice: save the money you’d spend on a warranty in an “emergency fund” to use when you actually need it. The warranty was through American Home Shield.