NOT TO BE PUBLISHED IN OFFICIAL REPORTS

OPINION

McKINSTER, J.

The court has read and considered the record in this proceeding and has concluded that an alternative writ would add nothing to the presentation already made and would cause undue delay in resolving the action. We therefore issue a peremptory writ in the first instance. (Code Civ. Proc., § 1088; Palma v. U. S. Industrial Fasteners, Inc. (1984) 36 Cal.3d 171, 178-179; Alexander v. Superior Court (1993) 5 Cal.4th 1218, 1222-1223, disapproved on another ground in Hassan v. Mercy American River Hospital (2003) 31 Cal.4th 709, 724, fn. 4.)

FACTS

Old Republic Home Protection Company, Inc. (petitioner) provides home protection warranty contracts to homeowners. These contracts provide for repair or replacement protection for certain systems or appliances in residential dwellings for a limited term.

Gail Steinert (real party) had such a contract from petitioner for a condominium, which she rented to two tenants.

In June 2009, real party notified petitioner that the tenants had observed a black, sooty substance on the carpets and drapes of the condominium, which they believed might be due to the air conditioning unit. Petitioner sent out a contractor to check out the problem. Real party was not satisfied and another contractor was sent out.

Shortly thereafter the air conditioning stopped working altogether and a dispute arose between real party, who wanted the air conditioning unit replaced, and petitioner, who just wanted to replace the coil for $652.

Real party sued her homeowners' insurer, as well as petitioner and the first contractor, for breach of contract, fraud (lack of intent to perform), and breach of the covenant of good faith and fair dealing, etc. The fourth cause of action is for bad faith and it sounds in tort with real party seeking emotional distress damages for petitioner's failure to replace the air conditioning unit, as well as punitive damages.

Petitioner filed a demurrer challenging several causes of action, including the fourth cause of action. With respect to this count, it contended that the tort remedy of bad faith does not lie for breach of a home protection contract. Petitioner argued that home protection contracts are not insurance policies and do not fall within the 20 statutory classes of insurance under the code. It noted that an earlier version of the legislation regulating these contracts would have classified them as insurance, but the final version did not.

The trial court overruled petitioner's demurrer to the fourth cause of action for bad faith. It noted that policyholders whose claims are denied cannot obtain a substitute in the marketplace. Without the possibility of tort damages, an insurer might deny the claim arbitrarily, knowing that the most it would have to pay would be the benefits owed. Although such contracts are meant to avoid an inconvenience rather than to provide economic protection, the contracts are also intended to provide the consumer with peace of mind. On balance, the court found that the policy reasons for permitting tort damages applied.

DISCUSSION

Although all contracts have a covenant of good faith and fair dealing, tort remedies are generally not available for breaches of noninsurance contracts. (Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 669-700; Rattan v. United Services Automobile Assn. (2000) 84 Cal.App.4th 715, 722 (Rattan).)

A home protection contract is not classified as an insurance contract under the Insurance Code. (Ins. Code, § 100.) Real party points out that the Insurance Code does not expressly state that they are not insurance contracts. She also notes that companies that offer home protection contracts are regulated by the Department of Insurance. However, we cannot deduce from these facts that these contracts should be considered insurance contracts. Unlike insurance contracts, a home protection or warranty contract does not provide indemnity against losses or legal defense against claims of liability. A home protection contract is much more limited and is a contract "whereby a person . . . undertakes . . . to repair or replace all or any part of any component, system or appliance of a home necessitated by wear and tear, deterioration or inherent defect, arising during the effective period of the contract, . . . [¶] Such contract shall provide for a system of service for effectuating such repair or replacement and shall not include protection against consequential damage from the failure of any component, system or appliance." (Ins. Code, § 12740, subd. (a).)

In Rattan, the court distinguished between the contractual obligations an insurer had assumed. There, the insurer not only had the obligation embodied in the insurance contract, but had also guaranteed the work of contractors to whom it had referred the insureds. These guarantees were not part of the insurance contract, and the breaches did not give rise to a tort remedy. The court explained that "the insured who has been provided a policy's financial benefits but is unhappy with the paint job performed by an agent of the insurer has contractual remedies against the painter, as well any insurer . . . acting as a guarantor of workmanship. The insured may, as was the case here, simply find another painter and require that the insurer pay for it. In this situation it is difficult to see any substantial public interest which supports any additional tort remedy." (Rattan, supra, 84 Cal.App.4th at p. 723.)

The situation here is comparable. The trial court concluded that the home protection agreement provides homeowners with "peace of mind"—just like insurance policies. However, the peace of mind is the same as any product warranty or "easy return policy." These contracts provide for repair/replacement only and would generally involve relatively minor systems. As in Rattan, if the homeowner is not satisfied with the repair job or the replacement product, he can use another contractor or purchase a different product and sue—as was done here. We agree, of course, with the trial court that after the breach, the homeowner cannot go out into the open marketplace and find another company willing to pay for a loss already incurred, but that is the predicament that many a contracting party is in following a breach. The homeowners have an adequate remedy—a contract remedy. There appears to be no compelling reason to expand the available remedies in such cases and, to the contrary, allowing a tort remedy could very well result in companies curtailing coverage and raising prices for these relatively inexpensive protection plans. When the Legislature has not definitely acted to provide a tort remedy by specifying these plans as insurance contracts, this court will not do so.

DISPOSITION

Let a writ of mandate issue directing the Superior Court of Riverside County to set aside its order overruling petitioner's demurrer to the fourth cause of action of real party's complaint and to issue a new order sustaining the demurrer to that count without leave to amend.

Petitioner is directed to prepare and have the peremptory writ of mandate issued, copies served, and the original filed with the clerk of this court, together with proof of service on all parties.

Prevailing party to recover its costs.

We concur.

RAMIREZ, P. J.

CODRINGTON, J.