Home warranties offer you protection for a specific period of time (e.g., one year) against potentially costly problems, like unexpected repairs on appliances or home systems, which are not covered by homeowner's insurance. Warranties are becoming more popular because they offer protection during the time immediately following the purchase of a home, a time when many people find themselves cash-strapped.
The National Association of Attorneys General lists home-improvement scams as one of the top-ten consumer problems. The most important thing to remember to have a written, signed and properly executed contract before any work is begun on your home or property. In particular, make sure the following information is contained in the contract: A complete description of the work to be done and the materials to be used; A provision requiring written approval for ANY changes; A statement that explains the builder’s or contractor’s guarantee on the work that he or she will perform; A starting date and a completion date; A complete description of the cost of the job, full disclosure of the payment terms, and the financing costs; Your signature and the contractor’s signature.