Nothing takes the place of a comprehensice home inspection, including buying a home with a home warranty policy.

Here are some of the problems you will find with a home warranty:

The contracts come with loopholes. You need to read your service agreement carefully to determine what is and isn't covered. Coverage for plumbing, for example, typically ends at your home's foundation, so leaks or breakages beyond that would be your responsibility. "Pre-existing" problems typically aren't covered, nor are breakdowns that result from poor maintenance or improper installation. The contract also may require that a system be upgraded to current building code standards -- at the homeowner's expense -- before it agrees to repairs.

Regulation is spotty. Some states hardly supervise home warranty companies at all. Others, like California, regulate them more closely. Home warranty companies in some states have shut down abruptly, leaving homeowners with nothing to show for their premiums.

That's not the only thing that can go wrong. A real estate agent may pay for the home warranty policy but only pay for 1 or 2 months of the policy.

If you're considering a warranty:

• Find out which government agency, if any, regulates home warranty companies in your state and check its complaint records.

• If regulation is loose or nonexistent, pick a company that has a long track history in your state and solid financials. (If the company is public, you can ask for an annual report to see if its home warranty operations are making a profit.)

• If someone else -- the home seller or a real estate agent -- is paying for the policy, insist that the warranty premium be paid in full for the term of the agreement before the sale closes. Check to be sure the amount is listed on the final escrow statement.

You don't have control over who does the work. The home warranty provider contracts with local service companies to perform the actual inspections and repairs. You don't get to choose, and scheduling repairs can sometimes be a trial.

Home warranty companies often favor repair over replacement. Repairs are usually cheaper, but that doesn't mean they're the wisest choice.

Aging, patched-together household systems can detract from the value of your home when it comes time to sell. Meanwhile, newer appliances and household systems are typically more energy efficient and can often pay for themselves within a few years.

According to Consumer Reports, most household appliances should be replaced if they're older than seven years or if the repair cost is at least half the price of a new unit. Here are samples of how long appliances and systems in a home should last.

If you want control over what is repaired and what is replaced, or if your appliances and home systems are relatively new, a home warranty probably isn't for you. (With new systems and appliances, the minor repair costs you're likely to incur will probably be much less than what you pay out for a warranty.)

So when might a home warranty make sense?

• In the first year you own a new home, when money tends to be tight, a home warranty can temporarily substitute for a home maintenance fund.

• If you're trying to sell a house, a home warranty can give buyers some peace of mind and may reduce the chances of your being sued should an appliance or system break down after the sale.

• A home warranty also can work if your home's systems are aging and you're willing to settle for repairs if the warranty company won't replace whatever breaks.

If you do decide to try a home warranty, check with several companies and carefully read each contract to determine what is and isn't covered. You also might check with friends and neighbors to see who has warranties and what their experiences have been with various providers.