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9. F. Warranties

 
 

Warranties Purpose of home or construction warranty programs Scope of home or construction warranty programs

Home warranties

 FHA/VA require warranties from builders with new construction. 

What is a home warranty?

A home warranty is an annual service contract covering the repair or replacement of essential appliances and systems components that break down over time.

What do home warranty plans cover?

Home warranties cover the parts and components of major home systems and appliances. From HVAC systems to kitchen appliances, plans help cover damage caused by everyday wear and tear.

Warranties

Purpose of home or construction warranty programs

For many people, a home is the most expensive purchase they ever make. It’s no wonder, then, that buyers of newly built homes are interested in warranties, which promise to repair or replace some aspects of the home, if necessary, within a specific time. According to the Federal Trade Commission, the nation’s consumer protection agency, if you’re considering a home warranty, it’s essential to understand what it covers, how to make a claim, and the process for resolving disputes that may arise between you and the builder or warranty company.

The builder backs many home warranties; the builder purchases others from an independent company that assumes responsibility for specific claims. Some homeowners buy additional coverage on their own from third-party warranty companies to supplement the coverage their builder provides. These add-on service contracts are commonly called warranties. The Federal Housing Authority (F.H.A.) and the Department of Veterans’ Affairs (V.A.) require builders to purchase a third-party warranty as a way to protect buyers of newly built homes with F.H.A. or V.A. loans

Home warranties

 FHA/VA require warranties from builders with new construction. 

What is a home warranty?

A home warranty is an annual service contract covering the repair or replacement of essential appliances and systems components that break down over time.

What do home warranty plans cover?

Home warranties cover the parts and components of major home systems and appliances. From HVAC systems to kitchen appliances, plans help cover damage caused by everyday wear and tear.

Scope of home or construction warranty programs

Coverage

Warranties for newly built homes generally offer limited coverage on workmanship and materials relating to various home components, such as windows, heating, ventilation and air conditioning (HVAC), plumbing, and electrical systems for specific periods.

Warranties also typically define how repairs will be made. 

The duration of coverage varies depending on the component of the house. 

Coverage is provided for workmanship and materials on most components during the first year. For example, most warranties on new construction cover siding and stucco, doors and trim, and drywall and paint during the first year.

Coverage for HVAC, plumbing, and electrical systems is generally two years. Some builders provide a range for up to 10 years for “major structural defects,” sometimes defined as problems that make a home unsafe and put the owner in danger. For example, a roof that could collapse is a “major structural defect.”

However, most warranties for newly built homes do not cover expenses an owner may incur as a consequence of a significant construction defect or warranty repair, like the cost of having to move out of one’s home while repairs are being made. Nor do they typically cover:

  • household appliances
  • small cracks in brick, tile, cement, or drywall
  • components covered under a manufacturer’s warranty

Homeowners Insurance

(Separate Policy) Renters Insurance

Renters get their insurance.

Homeowners insurance protects your home and personal property against damage or loss. It ensures you in case someone gets hurt while on your property. You may already have insurance on your home if you have a mortgage on the property.

Renters insurance offers renters coverage similar to homeowners insurance. 

What Can Homeowners or Renters Insurance Cover?

Homeowners or renter’s insurance may pay claims for:

  • Damage to your home, garage, and other outbuildings
  • Loss of furniture and other personal property due to damage or theft, both at home and away
  • Extra living expenses if you live in temporary housing until your house is being repaired

Homeowners or renter’s insurance may also pay for:

  • Physical injury and property damage that you cause to others through negligence
  • Accidents happening in and around your home, as well as away from home, for which you are responsible
  • Injuries occurring in and around your home to anyone other than you or your family
  • Limited coverage for money, gold, jewelry, and stamp and coin collections
  • Personal property in storage