It's not that home warranties or those who issue them are deceptive.

It's all right there in the small print -- disclaimers, exclusions, "weasel" clauses.

The contract tells you what isn't covered and that's no small matter.

The problem is, many home owners don't discover just how limited home warranties truly are until they need coverage they think they have.

So says the 13-page "New Home Warranties: Deception or Protection?A Consumer’s Perspective", prepared by John R. Cobarruvias, president of the Texas Chapter of Homeowners Against Deficient Dwellings (HADD).

Home warranty protection is an issue that has confounded home owners for years.

Founded in Liberty, MO, HADD is a nationwide, non-profit, grass roots organization created by home owners with unresolved complaints, most often about new home defects.

It its latest effort to assist home buyers, the group is warning them that "warranty" doesn't always mean what you think it does.

"Too many home buyers believe they have a full 10-year, bumper-to-bumper warranty that should, at the very least, be as comprehensive as a new car warranty in comparison and worthy of a product, which requires monthly payments for 30 years," the report says.

They aren't.

"The new home warranties reviewed for the recently released report are extremely limited in their coverage," said Cobarruvias.

Among the shortcomings, HADD found that so-called "10 year" warranties are riddled with dozens of exclusions, little is covered after the first year, by the second year only air and electrical systems are covered, during years three through 10 only major structural damage is covered -- provided the damage meets stringent and specific definitions, and a cracked foundation is not specifically covered for the full 10 years.

Most warranties also contain binding arbitration clauses that take away the constitutional right to a trial by jury and, depending upon the warranty, it can also contain unreasonable maintenance requirements.

"One warranty suggests that, when on an extended absence from the home, the home owner should have someone else maintain the foundation during dry periods. Maybe the neighbors could feed the cat, water the plants, and maintain the moisture content around the foundation," the report says.

To compile the report, HADD.com did not compare warranties, examine complaints about warranty service or actually rate them. It merely read some of the most common warranties to learn what is and what isn't covered.

Warranties HADD reviewed were primarily issued in Texas, but many were identical to those used nationwide, HADD said.

"One in particular is the Home of Texas Warranty used by David Weekley Homes, a Texas home builder. Home of Texas is almost word for word, picture for picture, identical to the Residential Warranty Corporation (RWC), which seems to be the most popular in the United States," the report says. The RWC warranty is the most popular warrant used, says HADD.

"The Home of Texas also has an interesting page dedicated to foundation maintenance requirements. Because of this extra set of maintenance requirements and the similarity to the RWC, the Home of Texas will be used as an example throughout this report," the report said.

Along with those two warranties, HADD also examined the Home Buyers Warranty (HBW or 2-10 Warranty), the Pulte Homes Warranty, the Ryland Homes Warranty and the Home Owners Warranty Corporation (HOW) Warranty.

The HOW Corp. entered receivership in 1994, leaving home owners with little, if any, coverage. Homeowners who have this warranty can apply only if there is money available and all other avenues of compensation have been exhausted, according to HADD.

HADD also examined the National Association of Home Builders' Performance Standards, which is not a warranty program, but a set of standards recommended to the builder. The standards, however, are very similar to those found in the various warranties reviewed.

"Home buyers should only use this report as a guide to the quality of protection provided by the various warranties," says the reports disclaimer.

While some state laws, including those in California, offer protections not provided by warranties, HADD's warranty study report found without such regulatory protection:

Published: January 15, 2003

Use of this article without permission is a violation of federal copyright laws.

Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.