CONCORD, Calif.--(BUSINESS WIRE)--Home warranty sales for resale homes in 2009 surpassed the previous year supported by an increased number of foreclosures and short sales, underscoring that buyers of these properties also increasingly recognize the need for home warranties, the Home Warranty Association of California (HWAC) reports.
Billy Jensen, president of HWAC, reported that approximately 308,571 home warranties were sold in California during 2009, exceeding the figure for 2008 by some 8000 sales. He noted that many buyers in today’s market are joining sellers, the traditional buyers of home warranties, to increase overall sales.
“While the majority of home warranties continue to be purchased by home sellers, we attribute the overall increase in sales to a broadening recognition that home warranties provide peace of mind and financial relief,” Jensen said.
Jensen explained that when parties buy a house in California today, “they are often financially strapped because of new mortgage guidelines. They can ill afford a major expense for unplanned breakdowns of appliances or a home operating system following the close of escrow. That’s where home warranties are invaluable,” he stated.
Jensen emphasized that the acceptance of the value of home warranties is at a high level, underlined by what he said is the ongoing growth of home warranty renewal sales after the first year of occupancy. “Higher renewal rates are another indicator of the recognized value of home warranty contracts,” Jensen declared. He reported that renewal rates, on average, rise to up to 70 percent after the second year.
Typically, a home warranty covers a home’s major operating systems and appliances against breakdowns due to normal wear and usage for one year after the close of sale. Items covered include plumbing, heating and electrical systems, most built-in appliances, and water heaters. In addition, most HWAC member companies offer additional optional coverage for plan holders for such items as swimming pool equipment, washer/dryers and refrigerators.
About the Home Warranty Association of California
HWAC is a statewide organization of home warranty companies representing approximately 95 percent of contracts sold in California.
Member firms are 2-10 HBW Warranty of California, Inc., American Home Shield of California, Buyers Protection Group, Inc., Fidelity National Home Warranty Company, First American Home Buyers, HISCO/CRES Home Warranty Plan, and Old Republic Home Protection Co., Inc.