You will see a lot of varying opinions on these, but overall it's mostly negative if you do your research. On average, they cost around $475-$550 plus a $100 deductible. Many have limited coverage, and do not cover preexisting conditions to the property. When you have an issue they send out the cheapest contractors and fix the problem as cheap as possible.
Then there is the problem of timing, getting someone out can be a couple days. I just read a story of someone who had a pipe leak. The warranty company told them to turn the water off and the earliest they could get someone out there was 4 days from then. No water for 4 days? No thanks, and they ended up calling their own plumber and paying for the fix themselves.
Then there are limitations. HVAC is a big one, and an expensive item when it needs replaced. You need to make sure you read the fine print on this one for home warranties. Some will only cover a maximum of $1000 or $2000 toward a new unit, and some will cover the whole thing. It can be a battle in itself just to convince them you need a new unit.
Roof leak? Your homeowners insurance should cover that. Appliances? Those are more common items that can go out. An oven or dishwasher costs about $350-$600 for basic models, so a $500 a year warranty won't save you any money there. Washer/Dryers can be included or excluded depending on the policy, but those cost as much as the policy costs per year as well.
Overall, I seldom recommend home warranties to buyer clients because of these reasons.
When is getting a home warranty worth it?
In my opinion, only if someone else is paying for it. Some agents will offer it to their buyer clients as a thank you item for using them. Some sellers occasionally offer one upfront with the purchase of their home. Additionally, its pretty common when making an offer that you ask the seller to pay for it if you want one. It can bring (some) peace of mind for the first year when you move into your first home and have lots of moving/home expenses getting established. First time home buyers are one of the largest groups that want a warranty. Beyond that, save your money.
At the end of the day, think of all the times you have been offered extended warranties on TVs, electronics, vehicles, phones, appliances, and even small gadgets. Had you purchased many of these warranties you would have spent hundreds or even thousands of dollars and made maybe 1, or no claims during the warranty period. You are better off keeping your money in your bank account and paying for it when something breaks.
If you have any questions about home warranties or wish to share your home warranty story (good or bad) please contact me.