A home warranty gives you the peace of mind that if your home has structural issues within a certain period of time, you will be covered financially. For example, soil settling can cause structural distress to a load-bearing element such as the foundation, floor framing, or columns. This is the type of event that is totally out of the builder’s control, but if you have a home warranty, you won’t have to pay out of pocket to cover the repair costs if something like this happens to you. A home warranty also typically covers defects in materials and systems for a certain period of time.
Look for these five crucial elements when choosing a home warranty, and always ask a potential builder what type of warranty they offer.
1. Builder Vetting
Look for a home warranty that has strict requirements for builder qualification. A good warranty provider will have high standards for a builder’s:
- Financial stability
- Typical building practices
- Adherence to national building standards
Having stringent builder requirements not only demonstrates that the warranty provider is credible and experienced, it also ensures that the builder you’re working with has a strong track record of delivering quality homes.
2. Clear Definitions of Responsibilities
Your home warranty should clearly define the responsibilities for both you as the homeowner and for the builder. For example, some of the responsibilities a warranty might require from a homeowner include:
- Proper maintenance of the home
- Maintaining grades around the home
- Planting trees and shrubs at the proper distance
Similarly, builders are expected to conform to certain construction performance guidelines. A warranty document includes a comprehensive list of the most common construction deficiencies, what the performance guidelines are, and what the responsibilities are for both the builder and the homeowner. Review these carefully to get an understanding of what is covered and what is expected from you in order to maintain coverage.
Whether you are building a new home as an investment or plan to stay in it indefinitely, it’s always a good idea to have a transferrable warranty. If you do choose to sell your home before the warranty has expired, it will be more attractive on the resale market because your coverage will transfer to the new owners.
4. Percentage of Paid Claims
A reputable home warranty company will research all claims and pay the ones that are covered under the warranty. When comparing your options, ask each company what percentage of their claims have been paid. Look for a provider at the higher end of the scale because you know that they stand behind their warranties.
5. Strong Track Record
Investing in building a new home is a big financial decision and you want to be sure that your investment is protected by a home warranty company with a strong track record. Ask how long they have been in business, how many homes have been covered in that time, and whether they have any customer testimonials they can share. You also never know when something will go wrong, so look for a provider that offers 24-hour claims service.
As part of our SMARTology approach, Adair Homes offers a SMARTwarranty through one of the most reputable warranty providers in the industry. The 2-10 Home Buyers Warranty provides coverage for one year of workmanship defects, two years of systems defects, and ten years of structural defects. If you’re planning on building a new home, get in touch with Adair Homes today to learn more about our warranty program and how it protects you as a homeowner.