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What is Covered Under a Builder Warranty

With so many new homes being built, a huge question is what exactly does the builder warranty cover?

First of all, it is good to know the difference between a home warranty and a builder warranty.

A home warranty is a one year, often renewable, service contract that typically covers repairs to major systems and appliances in the home. The HVAC, hot water heater (plumbing) and electrical would be considered major systems and the refrigerator, washer and dryer, and stove some of the appliances. Many plans allow you to purchase add-on coverage for items such as spas, swimming pools and second refrigerators. Home warranties are purchased by either the seller or buyer.

A home warranty covers repairs (sometime replacements) of major home systems that fail due to standard usage or age.

In Indiana, there are two types of new home construction warranties: "implied warranties" and "express warranties". Basically, the implied warranty, implies that the home is fit for habitation. An express warranty is a warranty given to the purchaser of a home by the builder and offers limited coverage of material and workmanship for one year (defects and faulty workmanship) to 10 years (major structural defects).

Most builder warranties will cover the following, though they may differ from builder to builder:

  • Concrete foundations and floors

  • Dry basement

  • Doors and Windows

  • Roofing and siding

  • Waterproofing

  • Insulation

  • Glass

  • Doors and windows

  • Carpentry

  • Clapboard and shingles

  • Garage doors

  • Paint

  • Plumbing

  • Electrical

  • HVAC

  • Septic system

What is not covered in a builder warranty? Household appliances, small cracks in brick, cement, tile or drywall, any components covered by a manufacturer's warranty will not be covered. Notice, if the systems have been used improperly or damage has occurred while trying to adapt the home, the builder warranty will be void and the homeowner will be responsible for the cost of repair/replacement.

Not only should buyers insist on a builder warranty, they should have an independent inspection to catch any concerns missed by the builders. Remember, there are many, many people in and out of the house before it is completed. An independent inspection will point out things that will need to be addressed. The buyer can use this for their list during the final walk through. It is much easier to connect with the builder at this point of the process than a year down the line.

Research local builders by checking the Better Business Bureau or asking local inspectors. Real Estate agents will also have an idea on the quality and craftsmanship of local builders.

Bottom line? Make sure you have a builder warranty if you are building a new home and make sure you understand who is responsible for what.


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