Home Warranty When Buying a House: Is It Worth It?

Short answer: No, you do not need a home warranty when buying a house. It is optional. The Federal Trade Commission says a home warranty is really a service contract that costs extra, and you decide whether to buy one. In Nevada, the law also says no one can require you to buy a service contract as a condition of approving your loan, so your mortgage does not depend on it.

Jennifer Rodriguez is a Realtor® and Military Relocation Professional (MRP®) in Northwest Las Vegas helping military families and first-time buyers make clear decisions.

A home warranty usually comes up near the end of a purchase, when you are tired and signing a lot of paper. Let's make this simple. Here is what a home warranty is, what it is not, how Nevada regulates the companies that sell them, and how to decide whether one is worth it for the house you are buying.

What is a home warranty?

A home warranty is a service contract. The FTC explains that despite the name, it is not a true warranty. It is a contract you pay extra for, and it typically covers repair or replacement of things like appliances and air conditioning systems for a set period of time.

The Nevada Division of Insurance describes a service contract the same way: something a consumer may buy for an additional cost that covers repair, maintenance, or replacement because of defects or normal wear. The Division also says a service contract is not an insurance policy.

Is a home warranty required to get a mortgage?

No. Nevada law, NRS 690C.220, says a person may not require the purchase of a service contract as a condition of approving a loan or a purchase of goods. If anyone tells you the loan depends on buying one, ask them to show you where that requirement comes from.

Ask your lender for its list of required items before closing. A home warranty is a separate, optional product, and it should not be on that list as a loan condition.

How is a home warranty different from homeowners insurance?

They cover different problems. A service contract, by the Nevada Division of Insurance's description, is for defects and normal wear, like an aging water heater that stops working. Homeowners insurance is an insurance policy, and it pays for the kinds of damage your policy lists.

Because the line between the two can get blurry, read both documents side by side. Look at what your homeowners policy excludes, then look at what the home warranty covers. The gap between them is what you would actually be paying for.

How is it different from a builder warranty on a new home?

If you are buying new construction, your builder may include a builder warranty. The FTC says a builder warranty comes with new construction, while a home warranty costs extra and typically applies to existing homes.

The FTC describes common builder warranty terms this way: one year for many items like siding, doors, drywall, and paint, two years for heating and cooling, plumbing, and electrical systems, and up to 10 years on some warranties for major structural defects. It also notes builder warranties usually do not cover household appliances, which may have their own manufacturer warranties. Terms vary by builder, so read yours before you decide whether a home warranty would add anything.

How does Nevada regulate home warranty companies?

Here is what most people don't realize. In Nevada, a company that sells service contracts has to be registered with the Nevada Division of Insurance. NRS 690C.150 says a provider may not issue, sell, or offer service contracts in Nevada unless it holds a certificate of registration.

Nevada law also sets some consumer protections for these contracts:

• Plain terms. NRS 690C.260 says the contract must be written in understandable language and list things like the price, the deductible, what is covered, the exclusions, and the cancellation terms.
• Backing. NRS 690C.170 requires a provider to show it can pay claims, through an insurance policy, a reserve account, or a large net worth. The contract must say how it is backed.
• A return window. Under NRS 690C.250, if you have not made a claim, you can return the contract for a refund of the purchase price within 20 days after the provider mails you a copy, or within 10 days after you receive a copy at the time of purchase, or within any longer period the contract allows. The provider must refund you within 45 days.

The Division has also issued cease and desist orders against companies selling service contracts without registering. In 2017 it warned Nevadans about one home warranty company it found selling contracts without a proper certificate of registration.

How do you check if a home warranty company is registered in Nevada?

Use the Nevada Division of Insurance's service contract look-up tool on doi.nv.gov. Enter the company name under provider and it shows active providers licensed to sell service contracts. The Division also keeps a list of service contract cease and desist orders. Check both before you sign.

Is a home warranty worth it when buying a house?

There's no one-size-fits-all answer. It depends on the age of the home's systems, what is already covered, and the contract itself. The FTC suggests asking these questions before you buy:

1. Will it save you money? Compare the price with the hidden costs, like the deductible or service fee you pay each time someone comes out.
2. What are the limits? Look for caps on what the company will pay, items that are excluded, and fees or rules for canceling.
3. Does it repeat coverage you already have? A newer appliance may still be under the manufacturer's warranty. A new build may have a builder warranty.
4. How do claims work? A slow or hard claims process cuts into the value of the coverage.
5. Who stands behind it? The FTC says a home warranty is only as good as the company responsible for the coverage. Search the company name with words like review or complaint.

Here's what I'd tell a friend. Get your home inspection first. The inspection report tells you how old the water heater, the air conditioning, and the appliances are. Then decide whether a service contract makes sense for that specific house.

Common mistakes with home warranties

• Thinking it is required for the loan. Nevada law says no one can make a service contract a condition of approving your loan.
• Treating it like insurance. The Nevada Division of Insurance says a service contract is not an insurance policy. You still need your homeowners insurance.
• Skipping the exclusions page. The coverage that matters is in the limits and exclusions, not the headline.
• Not checking registration. Look the company up with the Division of Insurance before you pay.
• Missing the return window. If you change your mind and have not made a claim, Nevada law gives you a set number of days to return it for a refund. Mark the date when you get your copy.

More on buying a home in Nevada

• What are the steps to buying a house in Nevada?
• Do I need title insurance when buying a house?
• What is the Nevada seller's real property disclosure form?

Sources

• Nevada Revised Statutes Chapter 690C, Service Contracts (NRS 690C.150, 690C.170, 690C.220, 690C.250, 690C.260)
• Nevada Division of Insurance, Service Contract Provider page
• Nevada Division of Insurance, Service Contracts Cease and Desist Orders
• Nevada Division of Insurance press release, July 25, 2017
• Federal Trade Commission, "So what's the deal with home warranties?" (February 24, 2023)
• Federal Trade Commission, Warranties for New Homes

Frequently asked questions

Do I need a home warranty when buying a house?

No. A home warranty is optional. The FTC says it is a service contract that costs extra, and you decide whether to buy one.

Can a lender require a home warranty in Nevada?

No. NRS 690C.220 says no one may require the purchase of a service contract as a condition of approving a loan.

Do I need a home warranty if I have homeowners insurance?

They cover different things. The Nevada Division of Insurance says a service contract covers defects or normal wear and is not an insurance policy. Compare your homeowners policy exclusions with the warranty's coverage to see what it would add.

How do I know if a home warranty company is legit in Nevada?

Nevada requires service contract providers to register with the Nevada Division of Insurance. Use the Division's service contract look-up tool and check its cease and desist list before you buy.

Can I cancel a home warranty in Nevada and get my money back?

If you have not made a claim, NRS 690C.250 lets you return the contract for a refund within 20 days after the provider mails you a copy, or within 10 days if you received a copy at purchase, or any longer period the contract allows. Check your contract for its cancellation terms after that.

Buying in Northwest Las Vegas and not sure what to keep or skip at closing? Send me your questions and we will go through them together. You can find me at homesbyjrod.com.

The information in this article comes from Nevada Revised Statutes Chapter 690C, the Nevada Division of Insurance, and the Federal Trade Commission, checked on October 29, 2026. Laws and contract terms can change, so read your own contract and confirm with the provider. This is general education, not legal or insurance advice.