What is a Home Warranty?
A home warranty (also known as a home service contract or a home protection plan) is an annual service contract that covers repair or replacement of certain important appliances and system components that break down due to normal wear and tear.
It's a good idea to get a home warranty when you buy a pre-owned home, especially if you're a first-time home buyer with little experience in maintaining a home.
With a home warranty, you always have to pay a service fee for each service call, but you don't have to pay the full cost of repairing or replacing items that are covered. There are exclusions and limits to policy coverage.
There is a provision in the Texas One to Four Family Residential Contract (Resale) that addresses the policy. This provides a platform to negotiate the payment of the policy, which must be prepaid for a year in advance.
7.H. RESIDENTIAL SERVICE CONTRACTS: Buyer may purchase a residential service contract from a residential service company licensed by TREC. If Buyer purchases a residential service contract, Seller shall reimburse Buyer at closing for the cost of the residential service contract in an amount not exceeding $___________ Buyer should review any residential service contract for the scope of coverage, exclusions and limitations. The purchase of a residential service contract is optional. Similar coverage may be purchased from various companies authorized to do business in Texas.
It can normally be renewed by the homeowner in future years at a slightly higher cost.
You should review the coverage, cost, and exclusions before selecting a provider.
Here are Some Home Warranty Companies
This is a partial list of providers and is not intended to serve recommendations of any company.