Residential Service Companies, more commonly known as Home Warranty Companies, are licensed by Texas Department of Licensing and Regulation (TDLR) as part of its Service Contract Providers program. These companies offer residential service contracts (also known as home warranties) to consumers for services related to the mechanical failure or failure of an appliance or household system due to normal wear and tear of an appliance or household system. These contracts are typically offered at the point of sale of a home. The contract can cover a wide range of systems including appliances, plumbing, electrical, pools, and water heaters. Make sure you review each contract and its details before choosing one.  It’s important to note that a residential service company contract is not required when purchasing a home.

What is the difference between a residential service contract and a homeowner's insurance policy?

While a homeowner's insurance policy covers loss to your residence and your personal property as a result of things such as theft, weather-related perils (rain, hail, the wind), and fire, it will not typically cover loss to an appliance or household system due to mechanical failure or normal wear and tear. A residential service contract will cover those types of losses but it will not cover damage to an appliance or system caused by those perils typically covered by an insurance policy (theft, fire, rain, etc).