5 Things About Home Warranties that Will Shock You


5 Things About Home Warranties that Will Shock YouFor many people, a home represents the most valuable purchase they will ever make. It’s important to understand the different types of coverage (builder’s warranty vs. home warranty or service contract), what they cover, how to file a claim, and how to deal with any issues between you and the builder. or the warranty company.

The builder‘s warranty is a warranty that comes with a newly built or remodeled home. It covers items that are typically a permanent part of the home, such as concrete floors, plumbing, or electrical systems. Most new homes have a builder’s warranty.

See 5 Best choice home warranty – Editors Research

About Home Warranties
5 Things About Home Warranties that Will Shock You

5 Things About Home Warranties that Will Shock You

In reality, a home warranty is a service contract, and it costs extra. It usually applies to existing homes and covers replacements and repairs of things such as appliances or air conditioning systems. The decision to purchase a home warranty is up to you.


Many home warranties are backed by the builder. Builders also buy warranties from other independent companies. In fact, the Federal Housing Authority (FHA) and the Department of Veterans Affairs (VA) require builders to purchase third-party warranties as a way to protect new home buyers with FHA or VA loans.


What does it cover and for how long?

Builders’ warranties for new homes typically provide limited coverage for workmanship and materials on specific home components, such as windows, heating, ventilation, and air conditioning (HVAC), plumbing, and electrical systems. Warranties usually explain how repairs will be carried out.

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

  • One Year: Coverage for labor and materials on most components typically expires after the first year. For example, most new construction warranties cover siding and stucco finishes, doors, frames, and trim, and masonry and paint for the first year.
  • Two Years: Coverage for HVAC, plumbing, and electrical systems is generally for two years.
  • 10 years: Some builders cover up to 10 years for “major structural defects,” which they often define as problems that make the home unsafe and endanger the homeowner. For example, a roof that is likely to collapse is a “major structural defect.”

Situations and items not generally covered

Most new home warranties do not cover expenses a homeowner may incur as a result of a major construction defect or warranty repair, such as the expenses of having to move and live elsewhere while repairs are being made. the repairs.

Builder warranties also typically do not cover the following:

  • Appliances.
  • Small cracks in brick, tile, cement, or plaster.
  • Components are covered under a manufacturer’s warranty.

service contracts

Service contracts are also sometimes called home warranties or extended warranties, but service contracts are not warranties.

A service contract can help you repair or maintain products like home appliances and air conditioners for a specified period of time, just like a warranty. But, unlike the guarantee, service contracts have an extra cost.

You might find that some service contracts:

  • They offer you the same coverage you get from the warranty included in the purchase price of the product.
  • They only cover part of the product.
  • They make it virtually impossible to get repairs when you need them.

And if the repairs are cheap, you may simply not get any benefit from the extra expense you did for the service contract.

File a warranty claim

If your home has a defect that may be covered under warranty:

  • Check the warranty to make sure your issue is covered. Pay special attention to the duration of some specific types of coverage.
  • Submit your claim following the instructions in your warranty. Even if the company offers you a hotline for urgent requests, put your repair request in writing. It is a good idea to send your letter by certified mail and ask for a return receipt. That way, you will have proof that the company received your letter and the name of who signed the receipt. Keep a record of your correspondence and conversations with the company. It is always good to keep a record of your dealings with the builder and warranty company.

How to solve the problems

Disputes sometimes arise between a homeowner and a builder, or an outside warranty company, regarding coverage for a defect or whether the repair work was done correctly.

Many new home warranties offer or require mediation and arbitration for warranty claim disputes.

  • In mediation , a neutral third party called a mediator helps the homeowner resolve the problem with the company by facilitating dialogue between the two parties. However, reaching an agreement is up to the homeowner and the company.

If the dispute is not resolved through mediation, the homeowner may have to pursue the claim in arbitration, rather than go to court. In this process, an “arbiter” or committee listens to each side of the case and then makes a decision or sets compensation. Some warranties allow the homeowner to choose an arbitrator from a list accepted by the builder or third-party warranty company.

  • Arbitration is a less formal process than a court proceeding, although the homeowner and the warranty company may have to appear at hearings, have legal representation, receive documents from the other party, present evidence, and cross-examine witnesses. other part. Most guarantees require both parties to abide by the arbitrator’s decision without appeal.

If your loan is financed by the FHA or VA and you make a claim against a third-party guarantee company, you can choose between arbitration or going to court. If you choose arbitration, you must submit to the decision.


Arbitration generally costs less than a court proceeding, but depending on the complexity of the arbitration, you should expect to pay several thousand dollars to complete the entire claim process. Review your warranties to see what costs you and the builder must pay.

Some companies offer owners the option of going through arbitration or court proceedings. Sometimes builders will agree to pay all costs related to arbitration to avoid going to court.

See Know the Difference Between Home Warranty and Home Insurance

For more information

  • To learn more about new home warranties, contact your state or local building board.
  • If you have an FHA-insured loan, contact the nearest US Department of Housing and Urban Development field office or visit www.hud.gov.
  • If you have a VA loan, contact your nearest VA office, or visit www.homeloans.va.gov.

5 Best choice home warranty – Editors Research

Your home is one of your most important assets, and when it comes to protecting it, you want the best options available. One thing you may not realize is that a homeowners’ insurance policy does not offer protection for many valuable items and systems in your home that can break down from normal wear and tear, including appliances such as washers and dryers, HVAC systems, plumbing, and electricity systems.

Our editors independently research, test, and recommend the best products and services; you can learn more about our review process here.


Recent Articles

Related Stories

Leave A Reply

Please enter your comment!
Please enter your name here

Stay on op - Ge the daily news in your inbox