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10 Things to Look For in Home Warranty Contract

October 23, 1994

Responding to mounting interest in home warranty contracts (now part of over 65% of existing home sales in California), industry officials have released a 10-point checklist to aid home buyers and sellers contemplating the purchase of a home warranty.

First, said Marty Wool, president of the Home Warranty Assn. of California (HWAC), 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. Structural items are generally not covered.

Wool advised home buyers and sellers to consider these 10 key questions when purchasing a home warranty:

1--Which components of the home will be covered by the warranty?

2--Is additional coverage available for swimming pool, air conditioner and other items?

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 Insurance?

6--What hours is the customer service department available to answer questions and process 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 Assn. of California? HWAC member companies abide by a professional code of ethics and monitor themselves, ensuring established standards of practice throughout the industry, Wool declared.

HWAC members are responsible for about 98% of the home warranties written in California.

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