What exactly is home warranty insurance?
A Home Warranty is an insurance policy that is supposed to save you from large unexpected expenses.  You can read a more in depth definition here.  Although a home warranty is supposed to provide piece of mind, unfortunately the entire industry is surrounded by controversy.     Many consumers report that thier home warranty company makes it difficult to receive payment for repairs, and to get decent service technicians to respond.  Many home buyers receive a home warrenty from companies such as HSA and AHS.

The Upside

• You are able to predict the costs to repair appliance and major systems in your home.
• Your home warranty company will cover all costs other than your deductable.
• Most of the time, the person that you purchase your home from will cover the cost of the first year of the Home Warrenty, so you can have the coverage with no out of pocket expense.

The Downside

• You will pay a deductible for each repair incident that you file.
• Most companies do not allow you to report multiple problems under one incident.  This means that you will have several out of pocket expenses potentially.   In some cases you are better off by not involving home warranty company which is a good reason to explore alternatives to a home warrenty
• If you are not likely to need system replacements, you can save money by hiring contractors directly

And the Ugly Side

• Read the contract carefully.  Expect surprises.
• It is not likely that your home warranty company will pay to replace a system.  Pay attention to the repair estimates to avoid unexpected costs.

Always remember, most of the contracts do not cover system or appliance failures due to lack of maintenance.  Since you likely have not owned the house since it was built, one of the common excuses not to pay for repairs is lack of maintenance.