Residential Insurance Home-Renters

State of California Department of Insurance 23 Home Protection Contracts (commonly called home warranties) protect homeowners from repair costs that aren’t covered by homeowners insurance. Home protection contracts cover such things as the plumbing, heating, electrical, and major appliances. Structural items are generally not covered. Home protection contracts will usually cover malfunctions of major appliances such as washers, dryers, ovens, and refrigerators. In some cases, or for additional fees, the warranty might extend to air conditioning units, garbage disposals, doorbells, ceiling fans, garage-door openers, water softeners, trash compactors, and built- in microwaves. It is important to note that a home protection contract is not an insurance policy. However, for the protection of consumers, home protection companies are regulated by the CDI and must be licensed by our Department. These contracts, sometimes described as service contracts, typically last one year, and cover the repair or replacement of major home systems and appliances that break down due to normal wear and tear. Home protection contracts don’t overlap or replace the homeowners insurance policy. For example, if your hot water heater burst and destroyed a wall in your home, the warranty would repair the water heater and your insurance would pay to fix the wall and any floor damage. The age of your home usually doesn’t matter, as far as home protection coverage is concerned. You can obtain a contract as long as the covered items are in good working order at the start of the contract. Generally, home protection contracts cost about $350 to $400 a year, plus $35 to $50 per service call. If your home’s plumbing, heating and electrical systems and major appliances are new or have been recently upgraded, the expense might not be necessary. On the other hand, when you do need to pay for repairs in an aging home, the costs can mount quickly. Home Protection Contracts