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Home Warranty
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Homeowners Insurance vs. Home Warranty
These two sound like they may be interchangeable, but they protect completely different issues.
Homeowners insurance covers events that may happen to your home, such as theft, accident, or natural disaster, but not normal system failures that happen over time.
Think of it like car insurance — If you get in an accident, your insurance will take care of it; however, if you need new brake pads, you are on your own.
Home warranties protect occurrences insurance does not, such as home system failures due to normal wear and tear.
Through the years, home systems like heating and cooling; gas, electric, and water lines; and water heaters will start to fail from normal use.
When an item protected by a home warranty plan becomes inoperable and can not perform the way it is intended to, you can call your home warranty provider to get the repair process started.
Tips to help keep your appliances in tip top shape:
Water Heater
Drain the tank twice a year to flush out sediment and improve efficiency.
Lower the temperature setting to 120 degrees Fahrenheit.
Insulate your pipes.
Ensure you place your water heater tank in the right position.
Heating and Cooling Systems
Clean and replace your air filter regularly based on the manufacturer’s recommendation.
Ensure your thermostat is set to the ideal temperature settings for the season.
Check weather stripping and insulation to ensure no outside air is getting in.
Close curtains in rooms that receive direct sunlight and close vents and doors to unused rooms when operating the heating or cooling system.
These simple tasks can make a big difference in how well (and how long) your systems run.
Home Warranty companies are regulated and licensed by:
California Department of Insurance (CDI)
Here is what the CDI does for consumer protection:
Licensing: All home warranty companies must be licensed by the CDI to legally sell "home protection contracts" in California. This ensures companies meet strict financial requirements and helps prevent poorly capitalized companies from operating illegally.
Investigating complaints: The department investigates consumer complaints about home warranty companies, which can include issues with delayed repairs or unfairly denied claims.
Reviewing company track records: The CDI posts information about home warranty companies on its website, allowing consumers to investigate a company's performance and complaint history before purchasing a contract.
Enforcing regulations: California law requires home warranty contracts to specify covered items, exclusions, limitations, and service fees in a clear and conspicuous manner. The CDI enforces these and other regulations.
For assistance or to file a complaint against a home warranty company, you can contact the CDI directly.
2024 California Code
Insurance Code - INS
DIVISION 2 - CLASSES OF INSURANCE
PART 7 - HOME PROTECTION
CHAPTER 1 - Definitions and Licensing Section 12740.
Comparing Home Warranty Companies:
"Overall Popular" Choices:
To compare home warranties for SoCal properties:
1. Compare quotes and key plan details
Get multiple quotes: Contact several companies to get detailed quotes for your specific property.
Compare plan costs: Note the total cost for different plan tiers, including both the annual premium and the service call fee (or deductible).
Identify Southern California-specific coverage: Check that plans cover essential items for the climate, like air conditioning, which is a must-have in Southern California.
2. Read the fine print
Request sample contracts: Obtain and read sample contracts from each company you are considering to understand the full terms.
Watch for coverage limits: Be aware of the maximum amounts the warranty will pay for covered repairs. Some companies may have higher limits for key systems like HVAC, plumbing, and electrical.
Check for exclusions: Pay close attention to any items or parts that are explicitly not covered, even if the overall system is included. For example, some plans may cover a fridge but not its ice maker.
Understand cancellation policies: Look into any potential cancellation fees and other costs you might be responsible for.
3. Research customer satisfaction and service
Read customer reviews: Look beyond the numerical ratings and read authentic customer reviews to get insights into service quality, response time, and how companies handle claims.
Check for accreditation: Look for companies that are accredited by the Better Business Bureau (BBB) and check their ratings, such as Fidelity National Home Warranty.
Look for workmanship guarantees: Some companies, like Liberty Home Guard, offer guarantees on the work performed by their contractors.
All information is deemed reliable but not guaranteed.
Buyers and sellers should conduct their own due diligence and consult with qualified professionals before making decisions.
What Do Home Warranties Typically Cover?
Household appliances like refrigerators, dishwashers, washing machines and dryers to home systems like plumbing, electrical systems, and HVACs, home warranties ensure you can affordably repair, maintain and potentially replace home systems and appliances.
This protects you from unexpected repair or replacement costs.
What Home Warranties Typically DO NOT Cover?
As aforementioned, home warranties are beneficial for repairing and replacing household appliances and home systems; however, the extent of the coverage depends on the warranty company and what level of coverage you purchase.
Here, note some common items generally excluded:
Structural issues in foundations, walls, paint and flooring
Commercial-grade equipment or systems
Pre-existing conditions
Normal wear and tear
Rust, corrosion and sediment problems
Improper maintenance, installation, design, manufacturer defect or previous repairs outside of the contract
Detection and removal of asbestos, radon gas and mold
Building and zoning code violations
When procuring a newly built home, your warranty coverage will likely come from two sources:
a builder's warranty for new construction defects; and
an optional, separate home warranty for appliances and systems.
These warranties are often confused, yet cover very different items.
Here, a builder's warranty is to be included with new construction, provided by the builder to cover defects in the construction, materials, and workmanship of the new home, as well as covering structural components, electrical, plumbing, and HVAC.
California law provides built-in protection: California law, specifically the Right to Repair Act (SB 800), provides a builder's warranty for all new residential construction. This covers a range of items, from the "fit and finish" for one year to major structural defects for up to 10 years.
Review your builder's specific warranty: While the law sets minimums, your builder may offer additional or different warranty terms. Always get the specific warranty details in writing to understand the coverage, exclusions, and claim process.
Appliances are often separate: Manufacturer warranties typically cover appliances, not the builder's warranty. Be sure to collect and understand all manufacturer warranty information for your new appliances.
Consider an optional home warranty: You can purchase an additional home warranty to cover your appliances and systems beyond what the builder provides. These cover common issues that arise from normal wear and tear.
Understand the fine print: Both builder and optional home warranties have limitations and exclusions. Read the contracts carefully to understand what is not covered and what your responsibilities are, including any maintenance requirements.
Maintain your home: Both types of warranties can be voided if you neglect proper maintenance. Be sure to follow all guidelines for upkeep.
Know your rights if a claim is denied: For home warranty issues, you can file a complaint with the California Department of Insurance. For builder warranty disputes, California law requires a "right to repair" process before you can pursue legal action.