In a fix? Home appliance coverage offers a cheap way to get repairs done.

Your refrigerator goes on the blink and it will cost you $800 to replace it. Sound familiar? What if you had purchased a home warranty policy? Well, you would only have to worry about paying a $50 deductible to cover the cost.

Home warranty policies cover the repair or replacement of" major home appliances. In general, it costs between $200 and $300 for a one-year policy. As with other types of insurance plans, home warranty policies require consumers to pay a deductible (ranging from $50 to $75) to cover an appliance when it needs to be serviced or replaced.

Home warranty policies provide "peace of mind," says Art Ansoorian, a spokesman for the Home Warranty Association of California. "If your heating furnace goes out in the middle of winter, at least you don't have to dip into your [savings] account," says Ansoorian.

While homeowners insurance policies cover appliances damaged or lost via emergencies or theft, they do not cover appliances that stop working as a result of normal wear and tear. That's where the home warranty policy comes into play.

Most people buy home warranty policies when they first purchase their home, which is usually the best time to get one since often you are entering into a purchase agreement for appliances that were already in the home. Still, you can buy a warranty at any time and renew it every year.

CHOOSING A POLICY

When shopping for a home warranty, it's important to compare packages to figure out what appliances are covered for which price. Different home warranty companies service different states. The largest is American Home Shield (www.americanhomeshield.com), which services 49 states. Other companies include Home Warranty of America (www.hwahomewarranty.com) and Fidelity National Home Warranty (www.homewarranty.com). Also, check with your local board of realtors.

Consumers should "read the fine print for whatever company that they select to make sure that they're getting the coverage they want," says Ansoorian. "Make sure you know what's excluded from coverage." For example, a policy might cover a home's heating system, oven, and washer and dryer, yet it might charge an additional $25 to cover a refrigerator.

Nancy Seats, president of Homeowners Against Deficient Dwellings, says her organization has fielded mixed feedback. "We have heard from a few people who found them useful," says Seats, though complaints about service rendered on appliances do exist. Many home warranty companies have their own list of contractors that they use to do repairs. Often, they put a cap on how much money can be allotted to replace appliances. All terms are spelled out in the contract.

Of course, many appliance manufacturers offer extended warranties on their individual products for a cost that might range from $20 to more than $100. But David Helm, deputy editor of special sections for Consumer Reports magazine, says extended warranties are almost always a bad deal since most consumers don't have major problems with the product being covered for the period that the warranty is offered.

Home warranty policies, on the other hand, cover several appliances and can be renewed for as long as those appliances exist, no matter how old they are. There is a caveat: To stop homeowners from buying a home warranty policy after an appliance breaks down, home warranty companies typically require that appliances are in working order when the plan goes into effect.

--Tamara E. Holmes