What is a Home Warranty Policy?

A home warranty policy is a one-year service contract that protects a new homeowner against the cost of repairs or replacement of major household systems and appliances that may break down as a result of normal usage. Coverage is also available for sellers during the listing and escrow periods to protect them against unforeseen repairs which might cause a delay in the escrow closing. A wide range of coverage is available, including plumbing, heating, and electrical fixtures, appliances, air conditioning, spas and swimming pools. For a modest one-time premium, the insured is protected from the high cost of home repair and is connected by the warranty company to a network of local, qualified technicians who will do in-home repair by appointment. A home warranty policy is not related to hazard insurance coverage.

If the purchase contract states that a home warranty policy will be provided for the buyer, it is typically ordered by the real estate agent during the escrow and the premium is paid at the close of escrow. A copy of the contract is provided to the buyer by the agent or by the escrow officer as a part of the closing document package.

To place a service request, contact the home warranty company directly. Most home warranty companies provide online information about their products and will process service requests electronically as well as by phone.