insurance contract or home warranty, generally for one year, covering the plumbing, mechanical, and electrical systems of a home. It is available in most areas upon the purchase of an existing home. Either the buyer or the seller can pay for the contract.
an insurance contract or home warranty, generally for one year, covering the plumbing, mechanical, and electrical systems of a home. It is available in most areas upon the purchase of an existing home. Either the buyer or seller can pay for the contract.
Example: Ricky and Rebecca Miller purchase a home. The sellers paid $500 for a residential service contract. Three months later, the air-conditioner compressor breaks and costs $800 to repair. The Millers must pay the $100 deductible, and the contract covers the balance of the cost of repair.
