Many people in older houses have home warranty coverage. This coverage, which is provided by a warranty company, covers repair or replacement of specific items. These include air-conditioning, plumbing, electrical systems, and the furnace. For an additional fee, they can also have coverage of major appliances. New home warranties apply to repair or replacement of problems in the basic construction of the building.
Many new home builders personally provide a warranty on their construction. Others will provide coverage from a warranty company. To make sure they are fully covered against any building defects, many new home buyers purchase additional coverage.
New home warranties have a specific length of times for coverage of certain areas. Things such as paint, siding, drywall, doors, trim, and stucco are ordinarily covered for one year. The electrical, HVAC, and plumbing systems have two years, and major structural defects ten years. The latter applies to things such as the roof, foundation, or other major construction problems.
The new home’s service contract or warranty policy should be carefully read. Knowing what is covered and the length of time the guarantee is in effect will assure that should a building problem occur it will be covered. The contract or policy will have a number to contact as well as provide instructions for filing a claim. To avoid misunderstanding, all correspondence should be made in writing and a return receipt requested. In addition, a careful record should be kept of all conversations with the builder and/or the warranty company. As a rule, most claims are promptly attended to.
Sometimes there is a dispute regarding a claim for repairs or replacement. Most warranties of this kind have what is called a mediation clause. This provides for a third independent party to hear both sides of the claim and help reach an amicable decision. Should this fail, in most cases the claim will go to arbitration rather than to court.
A disputed claim can become very expensive. For this reason, the buyer should carefully read the service contract or warranty policy and know whether the problem is covered. In addition, personal expenses, such as having to stay in a hotel while repairs are made, are not covered.
The importance of having a good new home warranty or service contract cannot be overemphasized. Defects often occur in new construction that appears later. This kind of coverage will assure that these problems will be taken care of promptly at no added expense to the buyer.