New Home Warranties – What Do They Cover?
Buying a new house means you’re entitled to a warranty on the construction of your house. Such a warranty covers any damages to your property which have been caused during its construction phase, for up to 10 years. However, what’s covered during this time period is not as simple as you might think.
What is a New Home Warranty?
A new home warranty is an insurance policy that covers all the damages caused to the house during its construction process. These damages include any defects caused by the construction materials used for the house as well. This means the insurance policy will be covering problems ranging from structural issues to foundation issues, while also handling cosmetic problems such as cracks in the walls.
These policies are referred to by many names, including New Home Warranties, New Build Warranties, Structural Warranties, Latent Defects Insurance, and Inherent Defects Insurance. All these terms are used interchangeably.
Who Provides a New Build Home Warranty?
The top choices for most new homeowners are the National House-Building Control, Global Building Control Warranty, and Premier Guarantee. The commonly opted one is NHBC, which serves the warranties to around 70-80% of the new build market. Normally, a warranty of up to 10 years is issued, which can be extended to 12 years in certain cases.
What is Covered with a New Build Warranty?
The basic goal of a home builder’s warranty is to provide coverage for any damage caused to the structural elements of the house. The warranty also covers the workmanship and materials utilized for the different features of the property, such as the windows, tiles, and drywall as well as the distribution systems such as electricity and plumbing.
Before opting for a certain warranty is important to thoroughly research and read the paperwork since some companies do not start providing coverage until after three years of a home closing. Added to that, if structural defects start becoming noticeable within the first two years, then the builder is responsible for fixing all the damages caused until the warranty expires.
Added to the, once the property has been constructed, the warranty is split into two periods:
- The defects Insurance period, covering the first two years
- The structural insurance period, lasting for 10 years after the purchase has been completed
Defects Insurance Period
The first two years of an house builder’s warranty are referred to as the defects insurance period. This time period covers all structural defects, such as the doors not closing properly, or the heating not working properly due to faulty pipes.
Structural Insurance Period
The rest of the years are referred to as the structural insurance period. This time period handles any major structural problems within the house. The list includes the foundations, external render, roofs, ceilings, chimneys, and load-bearing parts of the floors.
Other non-structural elements such as gutters, fixtures, or fittings are not covered by the warranty making them your own responsibility to maintain and upkeep.
What is not Covered with a New Build Warranty?
Since all home builders provide warranty plans with different coverages, builders should carefully review coverage inclusions and exclusions.
Natural wear and tear are one of the damages that are not covered by the warranties since they result from the homeowner not providing their house with adequate maintenance. Natural disasters are another potential threat since the damage caused by such catastrophes isn’t covered by the builder’s warranty either. Damage caused to any of the appliances installed within the house is also excluded from this list.
A detached garage is usually not covered by the builder’s warranty either unless the structure had been preinstalled by the home builder. Lastly, damages caused by damp or condensation can only be covered if it is a direct result of the builder’s failure to comply with the warranty provider’s standards.
Is a New Home Warranty Worth Buying?
Buying a home builder’s insurance is a worth-it option since it protects home builders from any ongoing liability related to structural damages. Home builders tend to find warranties that ensure the risk is minimized.