Plain-words guide

Is your home warranty worth renewing? Do the math they hope you skip.

The renewal letter arrives with a deadline and a higher price. Before it renews by default, run the three numbers that decide it — most holders never see them side by side.

Number 1: What you actually paid

Premium for the year (the average household pays around $684/yr, per ConsumerAffairs' 2025 figure) plus every service fee ($65–$150 per claim visit) plus anything you paid out of pocket above a cap. That's your true annual cost — not the monthly number on the letter.

Number 2: What the caps would pay on YOUR systems

List your five oldest systems and appliances. Beside each, write the plan's per-item cap and the real replacement cost. Where the cap is a fraction of the cost (a $500 appliance cap against a $2,500 refrigerator), the plan isn't insuring that item — it's discounting it. The caps page has the published limits by company.

Number 3: What self-funding looks like

The honest alternative: bank the premium. Two renewal-free years at the average premium is roughly $1,400 in a repair fund — which covers many single failures outright, with no waiting period, no cap, and no appeal. Self-funding loses when several big systems are all near end-of-life at once; it wins when your systems are mid-life and your plan's caps are thin.

The decision

Renew when: multiple major systems are old, the caps genuinely approach replacement costs, and your evidence file is built so claims will pay. Switch when: another seller's caps fit your systems better — compare per-item caps, not premiums. Self-fund when: the caps are thin, the systems are young, or a denial taught you the file matters more than the plan. The kit's renewal worksheet runs all three numbers on one page, filled in from your own bills.

Go deeper

Included in the $39 WarrantyDecoded Kit

The evidence-file system — the day-one baseline file (photos, serial numbers, inspection report) that makes 'pre-existing' hard to claim
Maintenance logs organized by denial reason — each log page names the denial it defeats ('not maintained' dies when the records exist)
The claim-call script — what to say when you call a claim in, and the things to never say on a recorded line
The denial-appeal ladder — written appeal, escalation, your state's correct complaint door, and the arbitration/small-claims routing your contract actually allows
The cash-out worksheet — their 'actual cost' check vs. the real replacement price, so you know the gap before you accept it
The renew-or-cancel worksheet — caps against the replacement cost of YOUR oldest systems, with the numbers filled in

Get the WarrantyDecoded Kit — $39

One payment. Yours to keep. For any home warranty company, any plan.