Difficulty: Medium

Average Score: 50%

Which claim for damages would be most likely to be covered by a home warranty program?

Rationale

A furnace that breaks a few weeks after the buyer moves in.

Home warranty programs typically cover major appliances and systems within a home, including furnaces. If a furnace malfunctions shortly after the buyer takes possession of the home, this event is likely to be included in the warranty coverage, as it falls under the program's intent to protect homeowners from unexpected repair costs.

A (a special assessment for a sewer which was not disclosed) YOUR ANSWER

This claim relates to financial obligations associated with property transfer and not to the functionality or condition of the home’s systems or appliances. Home warranties do not cover undisclosed assessments or financial liabilities incurred from property ownership, as they focus on repairing or replacing home systems.

B (an error in the tax proration on the settlement statement) YOUR ANSWER

Tax proration errors are financial and legal matters tied to the real estate transaction rather than the condition of the property itself. Home warranty programs do not address issues related to financial discrepancies or miscalculations that occur during the closing process.

C (a furnace that breaks a few weeks after the buyer moves in) CORRECT

This claim directly involves a home system covered under most home warranty programs. A malfunctioning furnace shortly after purchase is a typical situation where a warranty would be invoked, as it aims to protect the homeowner from costs associated with such repairs.

D (the fact that the property was the site of a paranormal event) YOUR ANSWER

Paranormal activity does not affect the physical condition or functionality of the home and is not a concern addressed by home warranties. Such claims fall outside the scope of coverage since they do not pertain to the repair or replacement of home systems or appliances.

Conclusion

Home warranty programs are designed to cover repairs and replacements of major home systems and appliances, such as furnaces. Among the options presented, the claim regarding a furnace breaking shortly after move-in is the only one likely to be covered under typical warranty agreements. Other claims relate to financial matters or non-physical issues, which are outside the warranty's intended purpose.

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