Back to Summer 2020 Issue

WRC Agency Benefits and Services: Equipment Breakdown Coverage vs. The Home Warranty

Summer 2020 Issue

Do your agents find that their clients are looking for further ways to protect their home investment? Are they worried about an unexpected expensive repair or replacement of a main appliance or system that services their home?

Clients have many options to save on costly repairs, from equipment breakdown to home warranty contracts. The difference between these two options can be drastic. What each company is willing to cover can vary, but the biggest difference is that for coverage to apply under equipment breakdown, losses must be sudden, direct and accidental. The home warranty offers coverage for normal wear and tear, but accidental damage is not covered.

In the strictest legal sense, a warranty of any kind within the United States must adhere to guidelines set at the state and federal levels. A home warranty is a contract to provide discounted repair and replacement services to the buyer. The term “home warranty” is not always used explicitly to mean a legal warranty is being conveyed. At least in the United States, a home warranty is not really a warranty at all, but a home service contract that covers the repair and/or replacement costs of home appliances, major systems such as heating and cooling, and possibly other components of a home, structural or otherwise. Typically, a home service contract covers home systems such as the home’s plumbing or electrical, and appliances like dishwashers that fail from old age/normal wear and tear. Coverage varies significantly across home warranty companies.

The WRC Agency has teamed with Safeco to offer your clients a home warranty product through American Home Shield in Wisconsin, South Dakota, Arkansas, Illinois, Missouri and Minnesota. According to “10 Best Home Warranties of 2019” by, American Home Shield rates No. 1 in the industry. They have paid over $2 billion in claims in the past five years and have a nationwide network of more than 14,000 contractors and over 1.7 million customers.

American Home Shield (AHS) offers four types of warranty plans:

  • Appliances
  • System components
  • Combination (both appliances and systems)
  • Build your own (choose specific appliances and/or systems).

A client can add on optional coverages for an additional fee. However, this is a product that cannot be purchased 30 days before or after the close date and is limited to single family homes of less than 10,000 square feet. It is an annual contract and clients can pay monthly or annually.

Covered appliances include:

  • Refrigerators
  • Ranges/ovens/cooktops
  • Clothes washers
  • Clothes dryers
  • Dishwashers
  • Built-in microwave ovens
  • Trash compactors
  • Free-standing ice makers
  • Garage door openers
  • Built-in food centers

Covered system components include:

  • Air conditioning with ductwork
  • Heating with ductwork
  • Electrical
  • Doorbells
  • Smoke detectors
  • Ceiling fans
  • Plumbing including stoppages
  • Water heaters
  • Garbage disposals
  • Instant hold/cold water dispensers
  • Central vacuums

Optional coverages:

  • Pool only
  • In-ground spa only
  • Pool/in-ground spa
  • Additional spa
  • Well pump
  • Septic pump and septic sewage ejector
  • Pump (only available in the first year of contract)

The annual cost varies depending on the systems covered, optional coverages and the service fee level. Customers have the choice of $75, $100 or $125 per visit.

If a loss occurs, your client should contact AHS either by calling the 24/7 toll-free number or by going online to submit a service request. AHS then would assign a qualified local repair professional from their network of providers.

This is an exciting opportunity for your agents to expand the products they can offer to their clients. For more information, please contact the WRC Agency at