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Over 86% Market Share in 2000
LARGEST HOME WARRANTY SALES JUMP IN FIVE YEARS RECORDED

VAN NUYS, CA -- Mounting awareness among California’s homeowners, many of whom have now purchased homes, sold them, and acquired new ones all with home warranties in place, has sparked a groundswell of perceived value responsible for the largest annual jump in home warranty sales in five years, according to the Home Warranty Association of California

(HWAC).
HWAC officials report that 404,567 home warranties were sold during 2000, representing 86.1 percent of the 469,583 existing home sales during the year as reported by Dataquick Products. This compares to 386,490 home warranty sales in 1999, or 81.3 percent market share.

“The dramatic increase in home warranty sales last year is attributable to greater awareness on the part of homeowners of value received. Increased frequency of home warranty contract use is also an issue here,” said Dan Langston, president of HWAC. Langston explained that approximately two claims are filed per year on home warranty contracts.

“Each time this occurs, the consumer experiences value, carrying the potential of a new water heater, furnace or other electrical or
mechancial product or system. Once you experience this as a homeowner, a home warranty becomes mandatory when you purchase another home. In the process, a significant number of consumers now familiar with the value of home warranties has been built.

“Fifteen years ago you had to explain what a home warranty was. Not any longer,” Langston said. He added that a concerted program of education by HWAC member firms, notably Department of Real Estate accredited courses, along with the training of new real estate agents by the professional brokerage community, have also had an impact in increased sales.

Typically a home warranty covers a home’s major operating systems 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 garage door openers, washer/dryers and refrigerators.

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

Member firms include American Home Shield Corporation, Buyers Home Warranty Company, Chicago Home Warranty, Inc., Fidelity National Home Warranty Company, First American Home Buyers Protection, Old Republic Home Protection, Inc., and 2-10 HBW Warranty of California.

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