A Home Owner Warranty (HOW) is a type of insurance that covers most home systems and appliances. This warranty pays for repair or replacement of covered items that break down due to normal wear and tear.

It can save much of the expense, time and frustration of dealing with unexpected repairs.

Mechanical systems, electrical systems and appliances don’t last forever. Marshall & Swift’s cost guide, “Home Repair & Remodel,” estimated that the average life expectancy of nine critical home systems and appliances is 13 years, and that the likelihood of failure in a given year is 68 percent.

Consumer Expenditure Survey, U.S. Census, indicated that homeowners spend an average of $900 each year to repair home systems and appliances (routine maintenance not included).

A HOW can protect home sellers and homebuyers from unexpected repair expenses.

For sellers, it adds value to their home, and it is sensible financial protection to have while a home is on the market and being shown to prospective buyers.

For buyers, it’s “peace-of-mind,” knowing that home systems and appliances are covered for one or two years after purchase of the home.

Here are some of the items that are covered by homeowner warranty plans:

  • Heating systems
  • Air-conditioning systems
  • AC Freon recapture
  • Ductwork
  • Plumbing
  • Water heater
  • Electrical systems
  • Hot tub
  • Microwave
  • Dishwasher
  • Garbage disposal
  • Range and oven
  • Trash compactor
  • Refrigerator
  • Washer and dryer
  • Well pump
  • Swimming pool
  • Removal of systems

Here’s how most of these plans work. When something breaks, call one number provided by the home warranty plan, and they send a reliable pre-screened contractor to repair or replace the covered broken item.

A nominal service fee is charged for each repair visit.

How much do these homeowner warranty plans cost? For a single-family dwelling under 5,000 square feet, they run anywhere from $400 up to $1,100 depending on the coverage and whether it’s a one- or two-year plan.

How much should you pay for one of these plans? Possibly not a single cent. If you’re a seller, perhaps your real estate agent will include a warranty plan when you list your home.

If you’re a buyer, a HOW would be a thoughtful closing gift from your agent.

Larry Stoller is a broker and Realtor with Real Estate Five of the Lowcountry. Larry@ RealEstateFive.com or www.RealEstate Five.com