In a relatively short period of time, home protection plans have grown dramatically in popularity. Today, the plans are almost standard in California, where eight of every 10 home sales are covered. Home protection plans, also called home warranties, are essentially service contracts or an insurance policy that cover a homes's major systems and appliances. Buyers have peace of mind and protection against costly home repairs. Real estate professionals report more satisfied clients and less liability for all parties.
Buyers have more confidence in buying a resale home.
Sellers can be protected against costly repairs during the listing and escrow period. Home warranty contracts cover mechanical systems such as plumbing, heating, electrical, water heater, and most built-in appliances. Structural components are typically not covered. Some policies cover garage door openers and roof repairs up to a specified limit. Contracts normally run for a year, but they may be extended at the owner's option for a renewal fee.