Real Estate

What is a Builder’s Home Warranty?

A builder’s home warranty is essential when buying a newly constructed home. Learn what it could cover and what it won’t before signing a contract.  

New construction on a two-story-home

Are you buying a newly constructed home? A builder’s home warranty applies to new construction or a remodel that is completed by a builder. Unlike a home warranty, which is purchased by the homeowner, a builder’s warranty on a new home is provided by the builder or from a third-party provider.

A builder’s warranty on new homes offers limited coverage on the materials and workmanship for a specific amount of time. The length of the warranty will depend on what features your home has. On average, builder’s warranties will last between six months and two years. However, some may last up to 10 years for any major structural defects that occur during that timeframe. For extended coverage, you can also add an American Home Shield® New Construction Home Warranty to your home, which will pick up after the builder’s warranty expires. 

A warranty will differ from builder to builder, so it’s important to know what it will cover and what it won’t before signing a contract. Find out what you should be looking for when going over a builder’s warranty contract for better peace of mind throughout the process. 

What Does a Builder’s Warranty Cover?

Negotiating a new home builder warranty can be a lengthy process. More times than not, a builder wants to limit their responsibility, so it’s up to you to ensure your home has as much coverage as possible. Before signing a contract, be sure to ask the following questions:

  • What isn’t covered by the warranty?
  • Do you have any references from previous projects?
  • How long does your warranty last?
  • What is the process for submitting a claim?

A builder’s home warranty will typically include limited coverage on any supplies used to build your home and items they constructed. These will often include:

  • Carpentry
  • Concrete foundations and floors
  • Doors and windows
  • Dry basement
  • Electrical
  • Garage doors
  • Glass
  • Heating and cooling
  • Insulation
  • Landscaping
  • Plumbing
  • Roofing
  • Septic system
  • Shingles
  • Thermal and moisture cover
  • Waterproofing

What a Builder’s Home Warranty Doesn’t Cover

It can be frustrating thinking something is covered by a warranty when it’s not. Weather and normal wear-and-tear are generally not included in a builder’s home warranty. Other items that a builder’s warranty may not cover are:

  • Household appliances
  • Defects resulting from work conducted by the homeowner or anyone else after the builder's work is completed
  • Shrinkage and expansion of the house
  • Normal fading of paint
  • Shrinkage of joints/minor cracking
  • Weather-related issues
  • Dampness/condensation caused by failure of the homeowner to maintain adequate ventilation
  • Insect damage

Terms of the Builder’s Warranty

Submitting a claim correctly and on time will help ensure your coverage under a builder’s home warranty. If something breaks during the warranty period but you wait to report the issue until after it expires, your claim could be voided. Another pain point you might face when submitting a claim is the question of who is at fault. For example, if you decide to install a satellite on your roof and cause damage in the process, then you could be responsible for repairs, even if your roof is covered by the builder’s warranty. Doing a walk-through prior, during and right after building is complete can help avoid issues with responsibility. 

For extra coverage against damage and repairs that a builder’s home warranty won’t cover, consider an American Home Shield® Home Warranty. From broken appliances to electrical wiring, American Home Shield can help protect your budget against costly unexpected repairs. Purchasing and owning a home is expensive, so make sure you protect your investment and enjoy the added peace of mind a home warranty brings.