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CONTACT: James Armstrong (800) 831-8200
Art Ansoorian (818) 881-1183

FOR IMMEDIATE RELEASE

ASSOCIATION PROVIDES CONSUMER GUIDE
FOR SELECTING A HOME WARRANTY COMPANY

By James Armstrong
President
Home Warranty Association of California

With an eye toward assisting home buyers and home sellers during a period of historically high interest in home warranties, the Home Warranty Association of California (HWAC) has established the following guidelines for selecting a home warranty company.

The first thing consumers need to know is that the home warranty industry in California is regulated by the State Department of Insurance. Prospective buyers and sellers can call the department at (213) 897-8921 to learn whether a particular home warranty company is in compliance with their regulations.

With that as background, HWAC suggests the following steps to assist home buyers and home sellers in securing a reputable home warranty firm.

• Inquire of your local real estate professional or Board of Realtors® for sample warranty plans.
   
  
• Consult your neighbors. Since home warranties have achieved such a high level of market acceptance in California (nearly 9 out of every 10 home resales include a warranty today), a majority of homeowners have experienced the benefits of warranty coverage.
   
  
• Call HWAC (818-881-1183). The association establishes guidelines that assure consumers that member companies are licensed and abide by a strict industry code of ethics. Also, visit our Web Site at www.warrantyassn.com.
   
• Shop for key items including: coverage, company stability, price and service fees. In California, the cost of basic home warranty coverage can range from $225 for a mobile home or condominium to $255 for a single family residence under 5000 sq. ft. Service fees for trade calls typically range from $35 to $55.
   
• Don't hesitate to ask questions about coverage. Make certain the coverage you purchase is compatible with the type of home you are acquiring. Be aware that when purchasing an older home (10 years or more), there's a good chance that changes in building codes could involve additional costs to accommodate modern systems which may not be covered by the warranty.
   
• Read the contract of the home warranty company recommended to you and make sure the coverage applies to you. Take note of limitations and exclusions.
   
• Confirm that the warranty company has the state-mandated minimum reserves. By law, 40 percent of premiums received on active contracts sold during a given year are required to be held in reserve.

Typically, a home warranty covers a home's major operating systems from breakdowns due to wear and tear for one year after the close of escrow. Items covered include plumbing, heating and electrical systems, most built-in appliances, and water heaters. In recent years, most HWAC member companies have provided additional coverage for homeowners for such items as air conditioners, washer/dryers and refrigerators.

HWAC is a statewide organization of home warranty companies representing approximately 93 percent of warranty contracts sold in California.

Member firms include American Home Shield Corporation, AON Home Warranty Services Inc., Buyers Home Warranty Company, Fidelity Chicago National Home Warranty Company, First American Home Buyers Protection, and Old Republic Home Protection Company, Inc.

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10/16/02