New construction is booming all over the country and prospective buyers want the closest thing to a guarantee possible when purchasing a newly built home. There is no greater peace of mind for a new homeowner than that which comes with knowing that the cost to repair or replace certain components will be covered by a solid builder’s warranty.
While some home warranties are backed by the builders, others are purchased by the builder from independent companies. These companies ultimately accept the liability of certain claims. Third-party companies offer warranties as well which are available for homeowner purchase in order to supplement builder warranty coverage. It is a requirement of the FHA and VA for builders to purchase third-party warranties in order to protect FHA and VA buyers.
Regardless of the type of warranty, builder, and third party company involved, it is paramount to learn what is covered, how to make a claim, what is not covered, and how to go about resolving any disputes. Most new construction warranties are somewhat limited in their coverage of windows, siding, doors, roofs, plumbing, electrical, and HVAC systems and coverage is usually good for one to two years. Make sure you know the exact coverage period as coverage periods could vary depending on the specific components covered. Some structural elements might be eligible for a ten-year coverage period and your warranty might be specific about how a repair should be performed and by whom.
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Household appliances, cracks in tile or drywall, irrigation, or items already covered by a manufacturer’s warranty are not usually covered by a purchased home or builder’s warranty. Many warranties do not cover incurred expenses accumulated during repairs such as furniture storage.
If you are planning to close on a new home soon, be sure to ask your builder or warranty provider about the specifics of your warranty coverage, what is not covered, specific timelines for claims and the process, dispute process for claim denials, and the extent of your liability. Also, you would be wise to request referrals to new homeowners with whom your warranty provider has worked and the location of some of the warranty company’s previous claims in order to speak with the associated homeowners.
While this info may not necessarily spur you to run right out and purchase a warranty for your new home, you can at least appreciate knowing where you will wind up in the event that you ever need to file a claim. If you are unsure as to whether your builder offers warranties he is required to provide, contact your state’s Attorney General of contractor licensing board.
For further education regarding builder’s warranties, contact your state’s builder’s board or the FHA or VA if you are intending to purchase via their loans.