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Commonly Asked Questions about Home Service Contracts

Most service contracts or extended service plans fall into one of six basic types: Date of Purchase Plans. These plans begin on the date the customer purchases the product and its extended warranty from the retailer. Extension Plans. Major Component Programs. Comprehensive Programs. Replacement Programs. Deductible Programs.
Service contracts may include towing, rental and emergency road service Under a maintenance agreement, the maker of the agreement is obligated to perform regularly scheduled maintenance of property, such as regularly scheduled oil changes for an automobile.
How does a service contract differ from a warranty? A service contract is an agreement between a businessAnd consumer to cover the repair cost of the product. Frequently called extended warranties, they are not warranties.
A home warranty plan protects the appliances and systems in your home: major home appliances, electrical, plumbing, and HVAC systems. Unlike your homeowners insurance policy, which protects your home from covered perils, a home warranty is a service contract that covers general wear and tear.
Extended warranty can be a confusing term, but actually refers to a service contract. A true warranty comes from the manufacturer WITH the purchase of your car, while an extended warranty or service contract is an extra protection that you can purchase for your vehicle that extends beyond the manufacturer warranty.
The main difference is that warranties are included in the purchase price and service contracts cost extra. Service contracts, also known as extended-warranties, can vary greatly and may not be worth the extra money.
An SLA usually includes an escalation path, troubleshooting methodology, and sometimes it provides a service credit remedy. If the new product purchased does not work once you it, an SLA will not cure that problem. Think of the Lemon Law for new car sales when you think about the warranty.
Both service contracts and warranties offer repair or maintenance for a specific time period. But theres an important difference: a warranty is included in the price of an item; a service contract costs extra.