What is a Home Warranty?  

A home warranty is a service contract, normally for one year, which helps protect home owners against the cost of unexpected covered repairs or replacement on their major systems and appliances that break down due to normal wear and tear. Coverage is for systems and appliances in good working order at the start of the contract.

How Do They Work?

• Although specific plans provide for specific types of coverage, most operate the same way.
• If a home system or appliance breaks or stops working, the home owner calls the home warranty company.
• The home warranty company calls a provider with which it has a business arrangement.
• The specific provider calls the home owner to make an appointment.
• The provider fixes the problem. If an appliance is malfunctioning and cannot be repaired, depending on contract coverage, the home warranty company will pay to replace and install the appliance.
• The home owner pays a small trade service fee (normally less than $100).

Who Pays for the Home Warranty?

Now, whether the seller pays for the home protection plan and home warranty coverage or whether the buyer pays for it, will depend on your local customs. It varies. In many locales, it's normal for a seller to pay for the coverage because it's a seller benefit. Why? Because then the buyer won't be calling the seller after closing if something breaks. Many real estate companies offer it to any client they are representing.

How Much does a Home Warranty Cost?

They are fairly inexpensive, typically ranging from $250 to $400, depending on coverage. Home warranty companies sometimes run special sales and either discount policy prices or offer additional coverage for the same price. The policies are prepaid for a year in advance, at which time they expire or can be renewed.

What is Covered?

The coverage usually includes the following items. Also find out if the policy is for the full replacement/repair cost of an item.

• Plumbing
• Electrical systems
• Furnace
• Water heater
• Heating ducts
• Water pump
• Dishwasher
• Garbage disposal
• Stove/cooktop/ovens
• Microwave
• Refrigerator
• Washer/dryer
• Swimming pool (may be optional)

What is Not Covered?

• Outdoor items such as sprinklers
• Faucet repairs are not covered under all plans
• Not all plans pay for refrigerators, washers & dryers or garage door openers
• Spa or pools, unless specific coverage requested
• Permit fees
• Haul aways

What Can Cause Denial of Payment?

• Improper maintenance
• Code violations
• Unusual wear and tear
• Improper installation

Because coverages vary from state to state and from policy to policy, ask to see a sample copy of a policy before you commit.

See below some of the Home Warranty Programs that are available:

Home Security of America, Inc. 
http://www.onlinehsa.com/ 
800-367-1448

American Home Shield

www.ahsservice.com

800-827-4636

Old Republic Home Protection

http://www.orhp.com/

800-972-5985