HWAC Providing 10-Point Checklist for Californians on Home Warranties

February 28, 2006

Reportedly responding to a high level of interest in home warranty contracts, which are now included in more than 90 percent of home resales in California, and growing consumer inquiries about warranties, the Home Warranty Association of California (HWAC) has issued a 10-point checklist of items designed to aid homebuyers and sellers contemplating the purchase of a home warranty.

“First and foremost, consumers should understand what warranties cover and what they do not cover. Typically, home warranties are one-year contracts that cover a home’s mechanical systems, including plumbing, heating, electrical, water heater, and most built-in appliances that break down due to normal wear and tear,” said Mark Lightfoot, HWAC president.

HWAC advises homebuyers and sellers to consider these 10 key questions when purchasing a home warranty:

1. What is included in the basic warranty?
2. What additional options are generally available?
3. How much is the fee for a service call?
4. What are the total dollar limits on the warranty, and what are
the limits for individual items?
5. Is the company licensed by the California Department of
6. Is there 24/7 customer service available for processing
emergency claims?
7. Will licensed insured contractors be used to make repairs? How
long is the warranty on repairs or replacements?
8. What is the typical turnaround time for a claim to be dispatched
and completed?
9. Can the warranty be renewed at the end of the first year?
10. Is the company a member of the Home Warranty Association of

“This last point, notes Lightfoot, is significant in that HWAC member companies abide by a professional code of ethics and monitor themselves, ensuring established standards of practice throughout the industry. It is important to understand your home warranty contract, including its coverage, exclusions and limitations. For example, home warranties only cover those items that fail through normal wear and tear. Items that were already broken before you purchased the contract, or items that fail due to lack of adequate maintenance, similar to a car engine breakdown due to a failure to change the oil or filter, are typically not covered.”

In this connection, Lightfoot explained that although home warranties are not insurance policies, home warranty companies are licensed by and regulated by the California State Department of Insurance for the consumer’s protection. HWAC members are responsible for approximately 95 percent of the home warranties written in California, and subscribe to a code of ethics.

Member firms are American Home Shield of California, Buyers Home Warranty Company, Fidelity National Home Warranty Company, First American Home Buyers Protection, HISCO Home Warranty Plan, Old Republic Home Protection Co., Inc., and 2-10 HBW Warranty of California Inc. C.

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