The home warranty industry in the United States began in the 1970s. At that point, the real estate sector experienced solid growth, and a variety of home insurance companies began offering contracts of coverage for home systems and appliances. The industry evolved over time, and these insurance options became known as home warranties.
Nowadays, millions of homeowners across the United States have opted for home warranty plans to protect the systems and appliances in their homes. These include AC units, plumbing systems, electrical systems, and heating, as well as washers and dryers, dishwashers, microwaves, garage door motors, Jacuzzis and the like.
Each state has specific rules and regulations vis-à-vis the licensing and coverage plans provided by home warranty companies. Given that the home warranty industry in the US was established 50 years ago, there is a myriad of companies offering their services to homeowners. For the most part, individual states have their own providers of home warranty plans, and it is incumbent upon the homeowner to find a plan that best meets their requirements.
However, it should be noted that the big companies – the national companies – operate across the US. It may be more beneficial for homeowners to seek coverage from home warranty providers in their area. Localization is arguably the best way of securing comprehensive home warranty coverage.
Be advised that home warranty plans (home service contracts) in individual states will offer limited coverage and repair work to broken systems owing to normal wear and tear. The home warranty acts came into being before 1990. Since then, the industry has blossomed across the US.
The First US Home Warranty Company
The first company to provide home warranty coverage in the US was American Home Shield. It is incumbent upon all home warranty companies operating in the US to comply with federal and state guidelines.
In the US, however, the term home warranty does not necessarily have legal connotations as a warranty. Instead, it is a service agreement to repair/replace damaged, faulty or defunct parts of home appliances and systems. There is no standardized system across home warranty contracts in the United States. For starters, coverage includes basic coverage for certain systems and appliances, and additional coverage for washers and dryers, etc. If an appliance has not been correctly maintained, the home warranty plan will not cover the repair and replacement costs.
It is essential for customers to read the fine print when it comes to home warranty plans, to ensure that they understand what is covered and what isn’t. These are known as exclusions and limitations.
How Do Home Warranty Options Vary from State to State?
In the state of New Jersey, for example, homebuilders must provide a home warranty to anyone buying a new home. These home warranty plans are different to plans offered to existing homeowners.
In certain states such as Texas, residential service contracts and appliance warranty plans are regulated, and in Florida, much the same is true. State regulations will mandate what companies are legally allowed to do vis-à-vis repair and replacement and maintenance of systems and appliances. Full licensing and regulation is essential at the state level to ensure that customers do not get taken for a ride by shady operators.
In most US states, the home warranty industry is regulated by the Commissioner of Insurance. This guarantees that customers will be protected against malpractice, fraud or other misdemeanors committed by home warranty companies.
All 50 states offer varying degrees of coverage when it comes to home warranty plans. For example, those who seek for home warranty in Ohio will find a variety of options available. Most homeowners in Ohio have home warranty coverage. Real estate agents typically recommend that buyers and sellers provide for home warranty coverage to sweeten the proverbial deal. Some of the leading home warranty companies in Ohio include Select Home Warranty, Choice Home Warranty, and Total Home Protection.
Some 67% of people in Ohio own their homes, and the typical home warranty plan is available for around $450 per year. It may be possible to use the same home warranty provider when moving from one state to the next in the US if they have operations in both states.
It is interesting to point out that several home warranty companies offer coverage across multiple states, or even nationwide. Nationwide providers of home warranty plans may not always be the best option, given that they don’t tailor their services to local market conditions. By shopping around, you can save a bundle on home warranty coverage and evaluate local options and nationwide carriers.
Have you ever had a home warranty? If so, what has been your experience with it?