Purchasing a new home is a big deal, so is a new home warranty. A new home represents the culmination of a lot of hard work and planning. When a new home is so shiny and new, it seems odd to be thinking about what could go wrong with your new home. You will have spent hours choosing the flooring, counters, light fixtures and more, which are all very exciting. Yet equally important is considering the protection of this investment. This is where a home builders warranty comes into play and why they are so essential. In this article, we’ll discuss what a builder’s warranty covers and doesn’t cover, as well as other important aspects that will allow you to protect your new home.
What Is a Builder’s Warranty?
A builder’s warranty is different than the typical home warranty that you might purchase on your own. Where a home warranty covers appliances and other systems, a builder’s warranty covers structural defects to system failures. Even the best builders and contractors have defects that can occur. The builder’s warranty plays a pivotal role in addressing these issues, ensuring you are not left to foot the bill due to problems arising from poor workmanship or subpar materials. This warranty is either backed by the builder or is purchased by the builder from an independent company. The length of coverage varies. For example, many items will have 1 year of coverage, such as doors, drywall, and flooring, while other items such as the HVAC and plumbing may have 2 years of coverage. Some builder’s warranties have 10 years of coverage for structural defects, such as the foundation and load bearing walls.
What Does It Cover?
It’s important to understand that builders warranties are limited, which means that not everything is covered. What is covered by your builders warranty will differ depending on your builder. Here are some items that might be covered:
Concrete foundations and slabs
Heating/cooling, electrical and plumbing systems
Roofing, siding and roof shingles
Insulation and waterproofing
Doors and Windows
Carpentry
Many builder warranties will state that their homes will be free from defects as defined in the National Association of Home Builders Residential Construction Performance Guidelines for Professional Builders. This comprehensive book states what are defects and the actions the builder must take if there is a defect.
What Doesn’t It Cover?
While knowing what is covered is important, it’s often even more valuable to know what is not covered. Here are some common exclusions:
Home Appliances (e.g., cooktop, oven, refrigerator, dishwasher, washer/dryer and microwave). These will typically be covered by their own manufacturer warranty
Normal Wear & Tear
Acts of Nature & Weather related damage
Improper Maintenance or Homeowner Misuse
Defects or problems caused by work done by the homeowner or other contractors after the builder’s work is complete
Insect damage
Landscaping & Fences
Expenses related to relocating during a repair
How Do You Choose the Best Builders Warranty?
By choosing a builder, you have be default chosen your builders warranty, so its important to evaluate the warranty as part of the overall decision in selecting your builder. Our builder interview questionnaire includes key questions to ask of the builder and their past customers to evaluate how a builder performs during the warranty period. Understanding the fine print of the warranty is important, but even more important is knowing the builder’s reputation. Will they fight every claim? How do they handle items beyond the coverage period? The best builders know that a lot of goodwill is generated by covering items when they don’t have to.
How Do You Make a Claim?
If you discover a defect with your home, your warranty should clearly describe the process for submitting a claim. Documenting the issue is critical. Promptly notifying the builder with photographs and written descriptions of the problem and keeping good records of your communication is very important. Make sure to follow your warranty claim procedures. If it indicates that claims are to use a specific form or be emailed to a certain email address, do that promptly. You don’t want a claim to be denied for a procedural issue.
Once the claim is received, it’s common for the builder or third-party warranty company to want to inspect and evaluate the issue. Unless it’s an emergency item that is causing other damage or harm, it’s important not to perform repairs until after you’ve received approval. Should a claim be denied, your builder’s warranty may have a dispute process. This might involve a 3rd party inspector or other mechanisms.
What about Unfinished Work?
Most builder warranties exclude incomplete work in your home. That’s why the pre-closing and punch list activities are a critical step. Don’t assume that unfinished items will be addressed as part of your warranty. They most often will not unless there is a defect. It’s not a bad idea to hire a home inspector or a similar construction professional to assist you with the development of your punch list items.
How to Protect Your New Home?
You’re all moved in and enjoying your new home, so how do you take care of it. Here are a few things you can do to make sure it’s protected:
Understand Your Warranty: Read it carefully and make sure you know what’s covered and not covered. Know the timeframes of coverage. Be clear on the claims process. If you’re unclear on any of these, get clarification.
Maintain Your Home: Although it may seem like you don’t have anything to do with your new home, there is routine maintenance that must be done. Everything from changing filters on the AC and fridge to knowing your irrigation timer is working. There are routine items and then other items such as annual AC maintenance, dryer vent cleanings, routine painting, and caulking. All of these are important to do regularly.
Keep Up Insurance: Having an updated home insurance policy that covers your full replacement home value is key. Making sure there are no odd exclusions is important. If you’re in a flood zone, be sure to have that separate flood insurance policy up to date, too.
Conclusion
While a new home warranty or builders warranty serves as vital safeguard for your new home, offering protection against defects and providing peace of mind, know what you have. Make sure to understand the coverage, limitations and procedures that go with your warranty. This will give you the confidence that your investment is well protected.