A residential service contract or home warranty is usually purchased when a house sells in the resale market. A home under warranty may be more attractive to prospective buyers. It covers major appliances and systems which are in proper operating condition at the time of closing and usually carries a one-year service agreement. It is an agreement on the part of the issuer (the residential service company) to repair or replace certain named components or systems within a home that fail due to normal wear and tear during the contract term. A service fee (a deductible ranging from $35 to $125) may be charged for each service call, and the homeowner is protected against the costly expense of a major breakdown or multiple breakdowns which can occur when a change of ownership and lifestyle subject the equipment to different usage.
Most residential service contract companies provide similar coverage, at a similar cost. Each company will have its own plans and optional coverages. Additionally, many companies offer coverage to sellers during the term of the residential listing agreement.
The Residential Service Company Act (Article 6573b, Vernon's Texas Civil Statutes) has been administered by the Texas Real Estate Commission since 1979. It provides for the licensing and regulation of residential service companies who provide residential service contracts, also known as home warranties, to the public.
Below you will find policy information from different residential service companies who have provided links to those policy specifics.