A total of 404,567 home warranties were sold during 2000, representing 86.1% of the 469,583 existing home sales during the year as reported by Dataquick Products. This compares with 386,490 home warranty sales in 1999, or 81.3% market share.
“The dramatic increase in home warranty sales last year is attributable to greater awareness on the part of homeowners of value received,” said Dan Langston, president of HWAC. “Increased frequency of home warranty contract use is also an issue here.” He explained that approximately two claims are filed per year on home warranty contracts.
“Each time this occurs, the consumer experiences value, carrying the potential of a new water heater, furnace, or other electrical or mechanical product or system. Once you experience this as a homeowner, a home warranty becomes mandatory when you purchase another home.”
Typically a home warranty covers a home’s major operating systems for one year after the close of escrow. Items covered include plumbing, heating, and electrical systems (air conditioning optional); most built-in appliances; and water heaters.
Publication date: 04/16/2001