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Whether you’re renovating an old home or moving into a newly built home, anything can happen. Because things can go wrong in any building process, it is vital to consider a builder’s warranty. This can cover any necessary repairs or replacements during a build. 

Builder’s warranties are often backed by the builder, but can also be purchased separately through a third-party company to supplement the coverage provided by the builder. Some loan companies, such as the Federal Housing Authority and the Department of Veterans Affairs actually require builders to purchase third-party warranties to protect buyers of newly built homes with FHA or VA loans.

For newly constructed homes, most warranties offer limited coverage on workmanship and materials related to the home, such as windows, siding, doors and roofs, as well as plumbing, HVAC systems and electrical work. Typically, these warranties provide this coverage for 1 – 2 years, though time periods may vary depending on specific elements. More often than not, these warranties will also determine how, when and who will make any necessary repairs. 

Household appliances, tile cracks, drywall damage, irrigation systems and any other components covered under a manufacturer’s warranty are generally not covered in a builder’s warranty. Coverage may also not be available for additional expenses, such as storage for household belongings during a repair. 

It is vital that homebuyers and homeowners understand what a builder’s warranty covers, and what they do not cover. Be sure to ask your builder, as well as any third-party provider, questions such as:

  • What is covered under this warranty? What is not covered?
  • How long will I have this coverage for?
  • If I make a claim, what is the process or timeliness of responses?
  • Is it possible for me to dispute your decision to deny a claim?
  • What are your liability guidelines?

Because warranties are a necessity when purchasing a newly built home, it is worth understanding the type of coverage you will receive. Talk to your real estate agent for references and be sure to shop around to ensure you are getting the best coverage and the best deal. Contact your local builders’ board for more information about builder’s warranties. If you are purchasing your home with an FHA or VA loan, these organizations may also provide you with additional information. 

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