What is a new-construction home warranty?
When you build a home, you have certain responsibilities. One of the biggest responsibilities is covering structural defects that occur during your state’s statue of repose. This means that if something goes wrong with the structural integrity of the house, you’re legally obligated to solve it for a certain time period. The problem is that different states have different expectations, which can have disastrous effects if you’re caught off guard. A new-construction home warranty from 2-10 Home Buyers Warranty (2-10 HBW) can address these problems and keep you and your buyers protected against the unexpected. Here’s how.
What does a new-construction home warranty cover?
A new-construction home warranty—also called a builders warranty or structural warranty—provides performance standards for workmanship, distribution systems, and structural defects that might arise within a newly constructed home. This helps you and your buyers establish expectations about who’s responsible for specific, covered problems with the home. Here’s what that means when you purchase coverage through 2-10 HBW.
For workmanship and distribution systems, you get insurance-backed coverage for repairs you cannot make. So, if the home’s workmanship or distribution systems require repairs and you default on that responsibility, 2-10 HBW takes on that responsibility. This provides protection to your homeowners, along with much needed third-party validation of your work.
But the crown jewel of a new-construction home warranty from 2-10 HBW is the 10 year, insurance-backed structural warranty. It protects you and your homeowners against qualified structural defects. We define structural defects as “actual physical damage to a designated load-bearing element of the home caused by the failure of such load-bearing element, which affects their load-bearing functions to the extent that the home becomes unsafe, unsanitary, or otherwise unlivable.”
Here is a list of what qualifies as a load-bearing element:
- Floor framing
- Columns
- Beams, girders, and lintels
- Footings
- Foundation systems
- Lead-bearing walls and partitions
- Roof framing systems
So, if any of these elements face a qualified defect and you have a structural warranty from 2-10 HBW, you are not responsible for making the repairs. Instead, 2-10 HBW takes responsibility for handling, paying for, and hiring the subcontractors to fix the problem. This can be a literal business saver, given the high fiscal costs ($42,000–$113,000 on average) and the damage such defects can do to your reputation.
When can you purchase a warranty for a new home?
You can purchase a new-construction warranty on a newly built home at the time of sale. Only you, as a builder, may purchase this warranty on behalf of your buyers. You must be a 2-10 HBW Builder Member to purchase a new-construction warranty.
Your homeowners may not purchase a new-construction warranty themselves. However, they can purchase a systems and appliances home warranty from 2-10 HBW. A systems and appliances home warranty is different from a new-construction warranty.
What type of warranty do you need on a home?
It’s an extremely good idea to have a structural warranty from 2-10 HBW for every home you build. Recall that the average cost to address a structural defect ranges from $42,000 to $113,000 per claim. And because 80% of structural defects result from soil movement, it’s possible that one claim can turn into several.
With a structural warranty from 2-10 HBW, you can pass those obligations onto us. Instead of having to scramble to solve qualified defects, you can call on 2-10 HBW to help you and your homeowners address the structural issue head on. This means a safer, happier experience for your clients, and more time for you to do what you do best—build quality homes.
What is the difference between home insurance and a new-construction home warranty?
Home insurance covers any accidental damage to your buyer’s house and movable possessions. A new-construction home warranty provides coverage against structural defects for up to 10 years.
Learn how you can protect your business and add valuable selling points to your new builds with a 2-10 HBW structural warranty.
