Home Warranty
Company Trends & Facts
Home-warranty companies offer protection for mechanical breakdowns in appliances and systems in the home, breakdowns that happen as a result of daily use. Home warranties provide peace of mind to homeowners for an event such as clogged pipes, and experts agree home-warranty coverage is a growing phenomenon.
Identification
A home-warranty company sells warranty programs to homeowners. The contract is designed to reduce expenses associated with an unexpected event and guarantee homeowners against loss or harm tied to the breakdown.
Features
The guarantees offered are for items that were working properly at the start of the contract. A host of systems are covered including plumbing, heating and electrical systems in addition to major appliances.
Expert Insight
Home-warranty coverage varies from state to state. In California, 90 percent of pre-owned homes are sold with a one-year home warranty vs. less than 50 percent of homes sold nationwide, according to MSN Money.
Warning
Beware of isolated scams. Before purchasing a home-warranty package, ask detailed questions such as where the company is based and whether it is part of the Better Business Bureau. Vague responses should be considered a warning flag.
Considerations
Most home-warranty contracts are annual and do not cover pre-existing problems, according to Consumer Affairs and Business Regulation for Massachusetts. Consumers looking for more expansive coverage might request additional options for itemized fees.
