When you purchase a new home, getting a home warranty is often a wise choice. This type of contract covers specific home repairs and is typically offered by builders for new constructions. Additionally, home sellers might include a warranty as a perk to entice buyers, but homeowners always have the option to buy one themselves to protect their property.
Now, you might be wondering exactly what a builder’s warranty entails. Essentially, it’s a guarantee made on new construction or renovation work. The builder stands by their craftsmanship, offering warranties that usually last anywhere from six months to two years.
So, what kind of coverage can you expect? A builder’s warranty typically protects you against issues relating to workmanship, installation, construction processes, and materials—think framing, concrete flooring, windows, or even paint. However, it’s important to know what it doesn’t cover. Usually, items like appliances (such as dishwashers or stoves) aren’t included, though you can purchase additional coverage for these items with a separate home warranty.
It’s crucial to gather all necessary information about a builder’s warranty before selecting a home builder. Make sure to ask explicitly what the warranty includes and its duration.
Let’s explore the differences among a builder’s warranty, a regular home warranty, and a new home buyer’s warranty. The distinctions mostly lie in who offers the warranty, what is covered, and the coverage period.
A builder’s warranty is usually provided directly by the construction company to address defects in materials and workmanship, covering a period typically spanning from six months to two years. Meanwhile, a home warranty functions as a service contract where you pay either monthly or annual fees in exchange for potential repairs or the replacement of specific covered items. There’s also usually a fixed service call fee involved. A new home buyer’s warranty is often included as a bonus in real estate contracts, and who pays for it depends on the agreed terms.
Although many home warranty companies have carved out a solid reputation for themselves, effectively helping reduce repair costs, some fall short. Several complaints from consumers highlight cumbersome processes for arranging service calls or getting repairs done. Restrictions on service providers or the specific brands used for replacements can result in subpar workmanship, with limited options for further repairs. Some warranties impose a cap on claims, covering only a set amount for repairs or replacements—even if the actual expense is greater. Furthermore, fine print conditions may require private arbitration instead of court proceedings in case of disputes.
One piece of advice for new homeowners: Considering a home warranty as an added layer of protection along with a builder’s warranty could offer peace of mind if you’re concerned about potential costly repairs. However, given the often restricted coverage of such warranties, it might be worthwhile to evaluate whether setting aside the equivalent of the warranty premiums in a savings account for future repairs might be more advantageous.
