Home Warranty plans are greatly encouraged in Texas.  Here, warranty companies are regulated by the state and pay licensing and bonding fees as a safeguard of their performance and financial strength.

Most warrantees may be better thought of as a residential service contract, payable in advance of the start of the policy/contract term and running for a 1-year term which is usually renewable.

In Texas, new home builders must generally provide a one year warranty, and often a "2-10 Warranty" covering years 2 through 10 but usually limited to structural problems.  Warrantees are only as good as the provider (either the builder or a third party insurance firm) and can disappoint the consumer when certain problems arise.  In short, warrantees are nice to have but consult your policy or a lawyer to fully understand your position and rights.

Coverage: Be sure to examine the list of covered and not covered features on the company brochures.  Covererage includes most mechanical items (ex.: dishwasher, heater), but not structural items (ex.: frame, siding and roof). Some failures are excluded from coverage plans such as rust-through of a cooler cabinet within the fist few months of the original policy inception date.  Certain mechanical items are excluded from coverage in some policies, or separate coverage may be available at extra cost. For example, on some policies, garage door opener motors are excluded from coverage unless an additional premium is paid.  Last, pool mechanical equipment is not covered unless an additional premium of about $150 is paid.

Deductable: Most plans require a deductable of about $50 per incident or per call, payable to the technician at the door.

Service Providers: Each warranty company has a process in which the homeowner must call a toll free number for authorization of repairs, and for the dispatch of an approved service technician.  The technician may need to communicate with the policy provider from the work site for final approval of repairs.

Who is Covered? The traditional use of these policies had the policy protecting the buyer for 1-year after closing.  Very often the home seller offered the warranty as a sales incentive and paid the $350 cost of the policy.  This process overlooks a great benefit of these policies and that is the addition of six months seller's coverage for an additional premium of about $90.  Seller's coverage provides up to six months of coverage during the home marketing process.  The cost of seller's coverage tends to be a bargain at about $90 for up to six months.  Compare this to the cost buyer's coverage at $350 for 1-year. 

We believe that both seller's and buyer's coverage make sense. These policies can help both buyers and sellers avoid unexpected expenses during marketing, inspections, and after the sale.  Both sides of the transaction can feel more comfortable with the sales and purchase process knowing they have some protection from high repair expenses.