A home warranty is actually a service contract, not a legal warranty, that provides discounted repair or replacement for home systems and appliances. Originating from builder-backed schemes like the UK's National House Building Council (NHBC) in 1936, the modern US version emerged in the 1970s, shaped by the Magnuson–Moss Warranty Act of 1975 and state regulations such as Texas's 1979 licensing law. By the mid-2020s, this industry had grown to roughly $4 billion in annual revenues and is often used as a real-estate closing incentive. Typical coverage includes plumbing, electrical, heating, and major appliances like refrigerators, but contracts frequently carry overall dollar limits. However, significant exclusions apply—particularly for "known conditions" (problems identified before coverage starts, such as those found in a home inspection) and for damage caused by misuse or lack of maintenance.