A home warranty from the builder of a new house is intended to protect homeowners from costly repairs for a specified period. While new-home guarantees offer reassurance, they are sometimes misunderstood, which may result in disputes between builder and homeowner. It pays to know just what is covered and for how long, and to supplement a builder’s warranty with additional coverage from a third party if necessary.
What is Covered
A typical new-home warranty in the builder covers the heating, ventilation and air conditioning (HVAC) components of the house. Warranties also cover windows, plumbing and electrical systems for workmanship and materials. Siding, drywall, paint, trim and stucco are covered as well. The whole period of protection varies from builder to builder and from component to component. Ordinarily, home warranties cover repairs for one to two decades. Major structural defects that affect the safety of the house are covered for up to ten decades. If you decide to buy supplemental policy, the Better Business Bureau advises that you assess the warranty company’s repair record of accomplishment before purchasing the policy.
What is Not Covered
Standard house warranties normally do not cover appliances at a new residence. Most appliances come with their manufacturer’s policy, but you may choose to buy extended warranties to those policies. Home warranties do not cover the cost of lodging, should you require it, while major repairs are made to your house. Small defects, such as cracked tiles are also not covered. Many warranty companies use their own crew of support contractors, restricting your choice of tradespeople.
Claims and Disputes
If you need to make a claim because of a covered defect, follow your warranty directions carefully. Make claims in writing and maintain records of any pertinent correspondence. If the builder or a third party provider disputes your claim, your course of actions is frequently a mediation procedure followed by mediation, if necessary. Warranty documents spell out how disputes are handled, and while mediation doesn’t involve the courtroom, you may have attorney representation. If a homeowner has an FHA or even VA-backed mortgage, then he may choose between utilizing mediation and going to court. Builders generally discourage suits, as they prefer to handle complaints themselves. The state of California requires homeowners to follow specific guidelines that enable builders time to correct problems before homeowners may take legal actions. However, homeowners hold the right to sue a builder if they are dissatisfied with repairs. The legislation, known as SB 800, applies to new homes marketed on or after January 1, 2003.