What Does the Builder’s Warranty Cover?

What Does the Builder’s Warranty Cover?

Buyers of newly-built homes are often interested in warranties. Known as a “builder’s warranty,” this agreement promises that the builder will repair or replace certain elements of a home if things go awry. Some of these warranties may be backed by the builder directly, while others are purchased by builders from independent companies that may assume responsibility for specific claims. In some cases, a homeowner will purchase coverage from a third-party warranty company as a way to supplement coverage provided by the builder.

Before investing in this type of warranty, it is essential to understand what’s covered and what is not covered. Additionally, you should understand the claims filing process; disputes may arise, and you should prepare to defend yourself if necessary.

In the case of newly constructed homes, most warranties will offer limited coverage on factors like workmanship and materials as they relate to components of the home. This may include windows, sliding doors, roofs, plumbing, electrical, and HVAC systems. A warranty will generally provide coverage for one- to two years, but separate components may have their own timelines. The warranty itself will define how and by whom repairs are made.

So, what’s not included? Warranties will not cover household appliances, and they rarely cover tile and drywall cracks and irrigation systems. Most builder’s warranties exclude expenses that may be incurred as a result of the repair, such as household storage.

However, you should understand that all warranties are different. Before you close on a new home purchase, ask your builder or third-party warranty provider the following questions.

1. What does the warranty cover?
2. What is not covered by the warranty?
3. What is the claim process?
4. What is the extent of your liability?
5. Where are some of your previous projects so I can speak with owners there?

Additionally, before signing, check with your state’s Attorney General Office or contractor licensing board to ensure your builder is offering all warranties they are required to provide.