Rocky Economy and Extreme Weather Drive More Need For Homeowners Insurance and Home Warranties

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The continued challenges in the effort to rebuild a struggling economy have left many Americans with little savings and no extra cash on hand for an emergency expense.This year’s unusual weather patterns, notably the widespread and extreme heat waves of last summer, made things worse for the average American household budget as home appliances and systems had to work harder, resulting in breakdowns to big- ticket items like air conditioning units. These factors add up to an increasing importance of insuring against unexpected losses, yet homeowners often discover the limitations of their homeowners insurance policy the hard way — when they experience a loss and file a claim for an item or failure that is not covered. Many homeowners don’t know about home warranties, which can fill an important insurance coverage gap.

Many homeowners don't know about home warranties, which can fill an important insurance gap.

In states like Nevada, Florida and California which rank among the top five in national home foreclosures — seasonal threats like extreme temperatures increase the risks for families that already have little or no savings.

The continued challenges in the effort to rebuild a struggling economy have left many Americans with little savings and no extra cash on hand for an emergency expense. This year’s unusual weather patterns, notably the widespread and extreme heat waves of last summer, made things worse for the average American household budget as home appliances and systems had to work harder, resulting in breakdowns to big- ticket items like air conditioning units. These factors add up to an increasing importance of insuring against unexpected losses, yet homeowners often discover the limitations of their homeowners insurance policy the hard way — when they experience a loss and file a claim for an item or failure that is not covered. Many homeowners don’t know about home warranties, which can fill an important insurance coverage gap.

“A home warranty plan can pick up where homeowners insurance leaves off,” said Sandra Finn, president of Cross Country Home Services (CCHS), one of the country's leading providers of home warranty products and maintenance plans. “This type of additional coverage protects homeowners against the high costs of repairing or replacing major home systems and appliances in the event of a mechanical failure caused by normal wear and tear. For example, if the household hot water heater breaks, insurance will cover the costs to repair a water-damaged floor, but it won’t cover the high cost to replace the water heater unit. A home warranty will.”

According to a recent study by the National Foundation for Credit Counseling, 64 percent of Americans don’t have even enough cash for a $1,000 emergency expense. The 2012 Consumer Literacy Survey conducted by Harris Interactive showed that families with no non-retirement savings whatsoever grew in 2012 to 39%, leaving millions vulnerable to financial disaster. A home warranty is critical to protecting a homeowner’s savings and offers a hedge against a household financial crisis.

“In states like Nevada, Florida and California which rank among the top five in national home foreclosures — seasonal threats like extreme temperatures increase the risks for families that already have little or no savings,” added Finn. CCHS received a 54% increase in customer service calls over a one week period in June during the record-breaking heat wave experienced throughout the southern states, central region and entire east coast.

Many homeowners don’t understand that most insurance policies do not protect against normal wear-and-tear damage to major appliances and systems, such as heating, cooling and plumbing. Home insurance plans generally cover the structure and contents of the house against specified perils. These generally include theft, fire, windstorm, lightening, hail, falling objects and smoke. Home warranties cover household appliances and systems that sustain a mechanical failure due to normal wear and tear, not catastrophic events. Covered items may vary by company and plan, but typically include heating, ventilation and air conditioning system (HVAC), electrical system, plumbing system, water heater, kitchen appliances such as refrigerator, stove/oven/range, dishwasher, microwave, garbage disposal, trash compactor, clothes washer and dryer, garage door opener and coverage for pools, spas, and well pumps.

Over the past few years, the number of homeowners who recognize the need for warranty coverage is increasing. The National Home Service Contract Association (NHSCA) recently released data that states in 2011, U.S. households purchased approximately three million home warranty plans. CCHS recently issued a white paper to educate consumers about home warranties titled, “Savvy Home Service Companies Adapting to Meet Consumer Needs.” It explains how, for an average cost of $300 to $500 per year, a home warranty is an integral tool in home and budget management. The white paper can be downloaded for free on their website.

According to the National Association of Realtors®, within the next 12 months, there’s a 60 percent chance that a key home system, such as the furnace, air conditioner or major appliance will fail, and the cost of the repair will average $900. Not only can home warranties mitigate these repair costs, but in the case of CCHS, they provide access to a national network of over 40,000 qualified, independently-owned and operated service providers. These professionals are available not just for major emergencies, but also for minor repairs. Many families today are one paycheck away from a financial crisis and the most important benefit with home warranties is that they provide peace of mind.

For more information, please visit http://www.cchs.com.

About Cross Country Home Services
Cross Country Home Services, Inc. (CCHS) is dedicated to making home management easy by offering a full selection of hassle-free, cost-effective home solutions, including warranty products and maintenance plans. Since 1978, the company has built a reputation for excellence and today is one of the nation’s leading providers of these products and services. Consumers can buy home warranties and home maintenance plans directly from CCHS or through select affinity partners in mortgage, banking, insurance, real estate and utilities industries. Products include some of the industry’s best known brands, including TotalProtect Home Warranty, Home Protect Warranty and HMS Home Warranty. The company’s customer care staff is available 24 hours a day, 365 days a year and is dedicated to ensuring the highest level of service. Homeowner needs are quickly resolved through a national network of over 40,000 service providers, the largest in the industry. Headquartered in Ft. Lauderdale, Fla., CCHS is a member of the Cross Country Group. To learn more about CCHS, please visit http://www.cchs.com.

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Jennifer Sullivan
O'DONNELL AGENCY
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