New Home Warranty – What it does and doesn’t cover

home warranty   Builder’s home warranty is a written statement by the builder that promises, should the things go wrong, that they will repair or replace certain elements of the house.  Many new home buyers look for home warranties to insulate themselves from latent defects. The duration of such contracts are between one and ten years. Some of these warranties are backed by the builder itself but it is also a practice for builders to buy them from third-party companies. There is also the possibility for home buyers to get a warranty from a third party to supplement the one provided by the home builder.  

Coverage

A common builder’s home warranty for newly built homes offers coverage of various components like:

• HVAC units
• Plumbing systems
• Electrical systems
• Windows
• Roofs
• Major structural elements

Typically, a builder’s home warranty provides coverage for one or two years. However, the specific time period varies for each component. For example, they usually cover materials and workmanship problems like paint, siding, drywall for a year. They cover major structural elements for ten years. Generally, warranties do not cover household appliances.  This is because they come with a manufacturer’s home warranty. Also, the warranties do not cover the costs while the repair is being done.  For example, moving out of the house during this period or the need to store the belongings until the repair is done.

Making a Claim

If you are in the situation to make a claim, the first step is to check your builder’s home warranty contract. Make sure they cover the specific damage. If it is, you contact the builder and request a repair. We advise you to do this in writing.  Even if the builder provides a telephone number. It is in your own interest to keep details records and receipts. In case of a dispute, these will help you.

Home Warranty Questions

Here is a list of the most important questions you should ask the builder or your third-party home warranty provider:

• What is covered?
• What is not covered by this warranty?
• How do I file a claim?
• The timelines and what is the process?
• Where are two or three of your previous built new houses so I can speak with the owners?
• Is there a procedure for me to dispute your decision to deny my claim?
• What is the extent of your liability?

The information that you will gain by asking these questions will help you understand your position, should you have to file a claim. You should also note that some states enforce tougher requirements for builder home warranties. We strongly encourage you to check with the Attorney’s General Office and with the contractor licensing board to assure the builder is providing the warranties stipulated by the state law. Some states are already enforcing laws that raise the one-year duration warranty for material and workmanship to two years. They might even command four years or more for major issues like HVAC and plumbing/electrical systems and 10 years for water-penetrations problems or structural defects.

The home warranty might not be transferable

If you buy a house from its original owner and it’s still within the first year of the warranty, it is possible the builder's home warranty will not cover you.  Make sure to check with the builder whether the warranty is transferable from the seller to the property's new buyer.

Conclusion

Consequently, there is a rule of thumb about builder contracts: the longer the contract, the worse the builder is. The shorter the contract, the better the builder. We think it’s a good idea to have a professional inspect your new home before buying it.  Also, do the same thing before the 12-month home warranty expires. A professional will easily spot out defects or even potential ones. A builder home warranty is a good method to assure that you will not have to pay for repairs caused by badly constructed houses. Keep in mind to clear your questions before signing the contract and preserve all documents carefully.

Contact Casey Moseman for further assistance

702-271-1274

www.lasegascustomloans.com