The Home Owner Warranty, or HOW, is a type of insurance that covers most home systems and appliances. This warranty pays for repair or replacement of covered items that break down due to normal wear and tear. It can save much of the expense, time, and frustration of dealing with unexpected repairs.

Mechanical systems, electrical systems, and appliances don’t last forever. In its Home Repair and Remodel Cost Guide, Marshall & Swift L.P. estimates that the average life expectancy of nine critical home systems and appliances is 13 years, and that the chance of failure in a given year is 68 percent.

The Consumer Expenditure Survey of the U.S. Census indicated that homeowners spend an average of $900 each year to repair home systems and appliances (routine maintenance not included).

A Home Owner Warranty can protect home sellers and home buyers from unexpected repair expenses. For sellers, it adds value to their home, and it’s a sensible financial protection to have while a home is on the market and being shown to prospective buyers.

For buyers, it’s “peace of mind,” knowing that home systems and appliances are covered for one or two years after purchase of the home.

Here are some of the items that are covered by a Home Owner Warranty plan:

• Heating systems

• Air conditioning systems

• AC Freon recapture

• Plumbing

• Whirlpool

• Water heater

• Electrical systems

• Microwave

• Dishwasher

• Garbage disposal

• Range, oven

• Trash compactor

• Refrigerator

• Washer, dryer

Here’s how most of these plans work: When something breaks, call one number provided by the HOW plan, and they will send a reliable, pre-screened contractor to repair or replace the covered broken item. A nominal service fee is charged for each repair visit.

How much do these HOW plans cost? For a single-family dwelling under 5,000 square feet, they run anywhere from $400 up to $1,100 depending on the coverage, and whether it’s a one- or two-year plan.

How much should you pay for one of these plans? Possibly not a single cent! If you’re a seller, maybe your real estate agent will include a warranty plan when you list your home. If you are a buyer, a Home Owner Warranty would be a thoughtful closing gift from your agent.

Larry Stoller is the broker-owner and Realtor with Real Estate Five of the Lowcountry. or