What is a Home Warranty?

  A home warranty policy protects you from the expense of major repair or replacement caused by unexpected mechanical failure of a major system or appliance. 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 in escrow for a year in advance. You can acquire a policy which protects your for one full year after closing from major repair or replacement bills.

Most policies have a $50 to $100 deductible, and you generally contact the warranty company for service technician. These policies are offered by several different companies in our marketplace.

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 (less than $100).