Which of the following best describes a home warranty?

A home warranty is best described as a service contract that covers repairs or replacements of major home systems and appliances. These systems can include HVAC (heating, ventilation, and air conditioning), plumbing, electrical systems, and appliances like refrigerators, ovens, and dishwashers. The purpose of a home warranty is to provide homeowners with peace of mind by helping to mitigate the financial burden of unexpected breakdowns or failures of these essential systems.

This contrasts with the first choice, which describes a type of insurance policy that typically covers events like natural disasters, which is not the focus of a home warranty. The third option refers to closing costs, which are financial expenses associated with the purchase of a home and do not involve repairs or maintenance. The fourth choice suggests a legal agreement between a buyer and seller; however, a home warranty is a service contract that is generally purchased after the transaction rather than being a part of the sales agreement. Thus, the second option accurately captures the essence of what a home warranty represents in the context of homeownership.