Home Warranty glossary

Service contract - the legal category this product belongs to. Federally defined as "a contract in writing to perform, over a fixed period of time or for a specified duration, services relating to the maintenance or repair (or both) of a consumer product." Home protection contract - California's statutory term for the same thing: a contract to "repair or replace all or any part of any component, system or appliance of a home necessitated by wear and tear, deterioration or inherent defect."

Service call fee (also trade call fee or deductible) - the per-visit charge, typically $75 to $125, generally payable whether or not the claim is approved. Coverage cap - a per-item dollar limit. Aggregate limit - the total the contract will pay across all claims in a term. Both convert "covered" into "covered up to."

Normal wear and tear - the failure mode these contracts are built around. If a failure is attributed to something else - abuse, improper installation, lack of maintenance, a manufacturing recall - it may fall outside. Pre-existing condition - a defect present before the contract began. Waiting period - a stretch after purchase during which claims are not accepted.

Covered component - the specific part of a system named in the contract; systems are frequently covered part-by-part rather than wholesale. Exclusion - anything the contract removes, by item or by cause. Cash in lieu - a cash offer instead of repair or replacement, usually calculated on the company's cost, not retail. That distinction is often the whole disagreement.