ASSOCIATION ISSUES LIST OF FREQUENT QUESTIONS AND ANSWERS ABOUT HOME WARRANTIES

BURBANK, CA, Nov. 5, 1998 -- With home warranty contract sales for existing homes in California having now been part of approximately eight out of every 10 home sales for three consecutive years, the Home Warranty Association of California (HWAC) has issued a 10-point list of frequently asked questions and their answers to assist home buyers and sellers contemplating the purchase of a home warranty.

Ray Adams, president of HWAC, emphasized that consumers should understand what warranties cover and what they do not cover.

Adams advised home buyers and sellers to consider these 10 key questions and answers when purchasing a home warranty.

Q- Which components of the home will be covered by the warranty?

A- Typically, home warranties are one-year contracts that cover a home’s mechanical systems, including plumbing, heating, electrical, water heater and most built-in-appliances. Structural items are generally not covered.

Q- Is additional coverage available?

A- Yes. Warranty coverage can be extended to cover pool or spa equipment, air conditioner and well pump. Consult your warranty company for details.

Q- How much is the fee for a service call?

A- Between $35 and $50.

Q- What are the total dollar limits on the warranty, and what are the limits for individual items?

A- Generally there are no limits, except for certain items, such as concrete encased plumbing lines.

Q- Is the warranty company licensed by the California Dept. of Insurance?

A- All member firms of HWAC are licensed.

Q- What hours is the customer service department available to answer questions and process claims?

A- Usually 24 hours a day.

Q- Will licensed insured contractors be used to make repairs? How long is the warranty on repairs or replacements?

A- All HWAC member warranty companies strive to use licensed, insured contractors. Most contractors will guarantee their work, and for a period of time following completion of work. In the event a component is replaced, the manufacturer’s warranty takes effect.

Q- What is the typical turn-around time for a claim to be dispatched and completed?

A- When a homeowner makes a claim during a normal business day, the contractor is dispatched the same day. For emergencies at night, weekends or holidays, most warranty companies offer emergency service.

Q- Can the warranty be renewed at the end of the first year?

A- Usually the homeowner is offered a renewal subject to policy of the individual warranty company.

Q- In the event the homeowner is not satisfied with the work, is there a consumer complaint department?

A- Yes. The Department of Insurance hotline. For its part, HWAC monitors its member firms’ adherence to a professional code of ethics, ensuring established standards of practice throughout the industry.

HWAC member companies are responsible for about 98 percent of the home warranties written in California.

Member firms are American Home Shield Corporation, Buyers Home Warranty Company, Continental Home Warranty, Inc., Fidelity National Home Warranty Company, First American Home Buyers Protection, and Old Republic Home Protection Co., Inc.