Home Warranty Sales on the Rise

A total of 801,255 home warranties were issued in the United States in 1995, according to the National Home Warranty Assn., up from 745,809 in 1994 and 640,000 in 1993.

Home warranties--a kind of insurance or service contract often purchased by sellers through their real estate agents--range in cost from $250 to $600, depending on coverage.

The policies typically cover the mechanical workings of an existing house for one year. That includes items like the air conditioning system, furnace, water heater, interior plumbing and electrical systems and built-in major appliances.

The largest market is in California, where about three-quarters of all houses sold carry a warranty, the St. Louis-based trade group said.

For every policy sold, 1.6 claims were paid last year, the warranty group said.