Monday, February 9, 2009
Most homeowners have never used a home warranty. In fact, some have never even heard of these policies, which are designed to cover the kinds of mechanical breakdowns that regular home insurance doesn't: clogged pipes, furnace failures, appliances that go on the blink.
The popularity of these policies, though, seems to be on the rise, especially as home sales slow and buyers need additional inducements to make an offer.
These home warranties, which are designed to cover existing or "pre-owned" homes, are different from the builder's warranties that typically come with a new house. In California, the policies are ubiquitous: Nine out of 10 existing homes in the Golden State are sold with a one-year warranty, according to the Home Warranty Association of California, compared with estimates of less than one in five nationally. Warranties in California are typically purchased by home sellers or their real estate agents to avoid lawsuits if something breaks in the first year. The policies also can give peace of mind to buyers who otherwise
Written By Liz Pulliam Weston