If you are constructing a new home it's likely your builder is required to provide a one year or more warranty for problems you might encounter after closing. The warranties we're talking about here are a little different, since they cover any home, no matter what its age.

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Don't confuse a home warranty with a hazard insurance policy. A warranty replaces items that fail on their own. Your hazard insurance takes care of items damaged in fires, by wind or by other covered events.

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Standard home warranty coverage differs quite a bit by provider, so be sure to study each policy carefully before selecting one.

• Many standard home warranties pay repair or replacement costs for plumbing systems, appliances and the heating and cooling units.
• Some home warranties cover the roof of your home.
• Warranty coverage for a private well, septic system and other items can often be purchased by paying an additional fee when you purchase the policy.

Warranty coverage is sometimes different for buyers and sellers. For instance, a standard policy might not pay a seller's repair bill if the furnace fails before closing, but it will cover the buyer if that happens after the sale. Read the fine print to be sure about warranty coverage for your particular situation. If you're working with a real estate agent, ask for literature from home warranty providers.

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A typical home warranty policy is effective for one year with an option to renew coverage upon expiration. The renewal cost might be higher than the fee paid for the initial policy.

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Cost varies, but a standard home warranty policy is typically $275 to $450.

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Grab a sheet of paper and list items that you wish to be covered down the left-hand side. To the right, make a separate column for each policy provider. Check-off items that are covered by each one.

• Which items are included in the standard coverage?
• Which items must be added on as separate policies and how much extra will it cost to add them?
• What's the co-payment? This is the amount you'll pay when a repair person comes out to fix a failed system. Similar to a health insurance co-payment, it generally covers the entire cost of the repair.
• Has the warranty company been around long enough to show you a good track record for customer service?

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A home warranty can make your home more attractive to potential buyers, especially if appliances and other items are aged. Buyers shouldn't come knocking on your door after closing if something fails, but that doesn't mean they won't, especially if they feel you didn't disclose a defective item. Providing a warranty offers a little peace of mind. The price of a home warranty is minimal compared to the price of the house, and since the policy can be paid for at closing you're not out any cash until the home sells.

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You may be somewhat cash-shy after coming up with the funds required for closing. All you need is to replace the refrigerator two months later. There are no rules that state who must pay for a home warranty. A seller can offer it as part of a marketing package. A buyer can purchase it or ask the seller to pay for the policy. Both parties can agree to share in the cost at closing

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