First American Products

First American provides you with large selection of products and services needs as a homeowner including home warranty and homeowner's insurance. Find out more about these services below to select the right coverage for your needs.

Home Warranty

For many new owners, this is a great way to gain peace of mind about problems that they used to call the landlord to fix: ones that often aren't covered under their homeowner's insurance.
But you need to read your contract carefully to see what is covered, and make sure the company offering the warranty is one you can trust to make sure your water heater gets fixed when it breaks at 11pm on a Friday night.

• How It Works:
• You purchase or receive a home warranty policy upon the purchase of your home.
• An appliance or system of your home that is covered under the warranty breaks.
• You call the company that manages the warranty.
• They send a pre-screened serviceman (plumber, electrician, air conditioner repairman, etc.) to fix the problem or replace the appliance.
• You are charged a standard service call fee, regardless of the cost of the repair.
• When your original warranty expires (or one year after buying a home), you will likely receive brochures from a number of home warranty companies seeking to either extend your policy another year, or sign you up for a new one.
  
  
• Two Types of Coverage: New Homes and Pre-Owned
  • Pre-Owned Home Warranties: cover normal wear and tear, but not major pre-existing conditions, usually offered in homes 5 years and older.
• Cover:
• Central Heating/Air Conditioning Systems
• Interior Plumbing
• Electrical Systems
• Water Heater
• Kitchen Appliances: dishwasher, oven, range and hood, trash compactor, garbage disposal
• Electric Garage Door Opener.
• Add-on Options include:
  • Clause covering pre-existing problems.
  • Pool, Spa, or Well-Pump coverage.
• Often Don't Cover:
• Washers and dryers (since frequently they are not part of the sale).
• Pre-existing conditions and rust/corrosion.
• Radiant floor heating and other in-slab plumbing.
• Plumbing problems between home and sewer.
• Cost: usually between $250 and $600/year, with deductibles of $25-$100, and service fees ranging from $10-100 per call.
• Purchased by:
  • Seller: to make the property more attractive and minimize disputes after the sale, or as part of negotiation with buyer.
  • Buyer: in case the appliances are on their last legs.
  • Real Estate Agent: a common thank you gift to the buyers celebrating a successful transaction.
  • Typically paid for at closing.
• Renewal: Most policies are renewable at the end of the year. Most buyers keep their warranties for only the first year, although some homeowners have renewed for as long as nine years.
• New Home Warranties: Are purchased by the developer and they can last for as long as 10 years.
• Limited Liability: builders tend to offer these warranties as a way to limit their liability for the performance of the new home.
• Cover the roof, structure, and foundation.
• Add-on coverage can include construction workmanship, materials and the home's mechanical systems.

• Usage Caps: On average, owners file two claims per year, but some warranties have limits on usage:
• Up to 10 Service Calls per year.
• Up to $5,000 on repairs per year.
  
  
• New Industry:
• Not Insurance: Home warranty companies aren't considered insurance companies in many states, and so they aren't as tightly regulated.
• Make sure you are working with a reputable company (check the Better Business Bureau for complaints) and ask:
• How claims are handled?
• The company's financial condition?
• How long has it been in business?
• Limited Recourse: Many warranties include mandatory arbitration clauses, which means your options are limited if the company doesn't perform to your expectations.
• National Rollout: More than half of all warranties are sold in the West Coast, but they are becoming increasingly common across the country.

Homeowner's Insurance
Most lenders will require that you have homeowners insurance in place before the closing. This can also be called hazard insurance¹ because it covers natural disasters like fire and storms, and theft. First American offers home owner insurance policies you can trust.

• Why do you need insurance for a house you don't own yet?
  Lenders generally require you to have a Certificate of Insurance, Insurance Binder or some other document showing proof of insurance by the date of closing. If you don't have it, you can't close on the home.
  
  Basically, the lender won't fund the loan on a property that isn't insured, and the lender will often require certain types of insurance and at a specific financial level (usually at least the amount of the loan) to make sure they won't lose their money in the event of a disaster.
  
  Also, some states require homeowners carry specific types of insurance, like earthquake or flood insurance.
  
• Types of Coverage: Most insurance policies have several sections, each one covering a different aspect of homeownership:
• Dwelling Insurance: pays for damages to the structure of the home, outbuildings, detached garages, etc.
• Personal Property: covers household items, including furniture, clothing, appliances and electronics which are damaged or stolen. (After an event, many people find that they have a lot more stuff than is covered in their policy, do an inventory and videotape your possessions.
• Liability Insurance: protects you against financial loss if you are found legally responsible for someone else's injury or property damage
• Medical payments: pays the medical bills for anyone injured on your property (and some injuries away from the property, for example, if your dog bites someone)
• Loss of Use: covers living expenses if your property is destroyed or too damaged to live in while being repaired
• Flood Insurance: many lenders and some states require a specific policy for flood insurance.
  
  The property may be far from water, but if it is located in a designated flood plain, you may have to get a policy that covers losses due to water damage from heavy rains, erosion, sewer backup or rising rivers and streams. Most standard homeowners' policies don't cover this type of damage.
• Types of Reimbursement: there are two forms of reimbursement for damages:
• Actual Cash Value: the amount you paid for the item, minus depreciation. So if you paid $10,000 for a new roof five years ago and it was destroyed in a storm, the insurance company would give you maybe $7,500 to take the 5 years of depreciation into consideration
• Replacement Value: the amount it would cost to replace the item (with an identical or similar item) in today's dollars.
  
  These policies usually give you a higher reimbursement than actual cash value policies, and so cost more. In some cases, these policies allow the insurance company to decide how the house is repaired (they dictate what is an appropriate replacement)
  
  Your policy amount will not match the dollar value of the property, since it doesn't include the value of the land. If you aren't sure how much it would cost to rebuild your home, your insurance agent will have construction tables to help you figure out an amount.

Know your policy limit:

If you insure your home for $100,000, that is the maximum amount you will receive, even if it costs more to repair or rebuild it. Check the Declarations page on the first page of the policy and make sure you are comfortable with what it states for your coverage.
It's not exactly fun to read, so many people don't, only to discover afterward that they aren't covered for the kind of flood/storm/fire that destroyed their home and everything in it.
Thousands of people are still struggling with their insurance companies over damage done by Hurricane Katrina: they could be covered for hurricane damage, but not for wind-driven water intrusion, or vice versa. Make sure you know what you are covered for and what risks you are taking.

• Personal Property: When they file a claim, many people find that they have a lot more stuff than is covered in their policy.
• Avoid Uncovered Loss: To keep from having a major uncovered loss:
• Do an inventory: note each item, its value, serial number and attach receipts for expensive items)
• Photograph or videotape your possessions: walk around each room and include closets, open drawers, storage areas and garage.
• Store these in a fire and waterproof box and make copies to store someplace safe, maybe at your Mom's house.
• Riders: Most policies have strict limits on coverage for jewelry and furs, often you can purchase additional coverage called endorsements.¹