Nina Smith

Nina Smith

Nina is a writer with more than 5 years of experience. She is experienced in such topics as home warranty and home maintenance. She enjoys giving a piece of helpful advice, so don't hesitate to ask her in the comments.

New build home warranty

The requirements of a newly constructed property are much different from a home that has already been in use for a few months. Generally, the homeowner requires minimal concern regarding the replacement of entire systems. However, there is no guarantee that the new systems will not fail or have any troubles. As such, builder warranties cover the home for a few years. However, a builder warranty may not cover the appliances installed in your home. These aspects make a new builder home warranty a necessity for most homeowners. Here, the article will consider the need for builders warranty on a new home, including:

What is a New Home Warranty?

Cost of New Home Warranty

Additional Fee and Deductibles Involved in New Build Home Warranty

Different Structure of Home Warranties for New Homes

Difference between Builder’s Warranty and Home Service Contracts

What is a New Home Warranty?

Builder’s warranty generally does not cover appliances. As such, no coverage is provided to the homeowner for an appliance that malfunctions through usage. The cost of replacing these appliances can be a severe financial burden for new homeowners. However, homeowners can reduce the expense of these costly repairs and replacements by covering their appliances under a home warranty plan. A new build home warranty covers the systems and appliances installed in a new home, reducing the financial burden on the homeowner if something malfunctions.

Cost of New Home Warranty

Usually, there are no significant differences in the costs of home warranties for new or old homes. The only varying factor is the type and level of coverage selected. Consequently, most companies offer differently priced plans offering coverage for systems, appliances, or a combination of both. Most single plans start at 35 USD per month, while combo plans may start at an average of 50 USD per month. Another option for homeowners is to pay the yearly fee upfront. Such payments often involve generous discounts offered by the home warranty providers, reducing the annual costs to around 400 USD.

Additional Fee and Deductibles Involved in New Build Home Warranty

Apart from the premium payments made annually or monthly, the homeowner must pay a few additional fees in different circumstances. 

  • Service call fees are paid every time the home warranty provider is contracted to perform a service.
  • Transfer fees are involved in changing your home warranty plan to another provider.
  • Some home warranty providers charge a plan cancellation fee as well.
  • Other fees may include building code violations, permits, and disposal fees.

In most cases, top-tier new home warranty providers offer affordable options for these fees and deductibles to accommodate the homeowners.

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Different Structure of Home Warranties for New Homes

A newly built home requires a builders warranty in most states. The builder provides this warranty to the homeowner for the newly constructed house. Such a warranty follows a specific structure:

  • In Year 1, almost everything related to your new home is covered by the builder. However, such robust coverage is often based on how repairs are performed. In many cases, the homeowners don’t get timely services in case any repair is required. Similarly, builder’s warranty does not cover the mostof appliances. As such, most homeowners prefer to bring in the appliances from their previous homes instead.
  • Between Year 2 and Year 5, only major home systems are covered by the home builder as part of their builder’s warranty. Therefore, the builder warranty covers your heating pumps system, garbage disposal system, electrical system, and air conditioning system. However, warranty no longer covers many value-added features. These features include discounts on labor costs, auto repairs, air filters, roof leaks, etc.
  • In the last five years of your builder’s warranty, the homebuilder covers only the major structural damages and faults. More importantly, minor defects and cosmetic damages to the home are now the responsibility of the homeowner.

Difference between Builder’s Warranty and Home Service Contracts

There are some major differences between home service contracts and builder warranties:

  • Some states require builders to provide builders warranty with the homes that they sell. Usually, the length of time for the warranty is one year after the sale.
  • Home service contracts have a more extensive network of technicians and contractors. Thus, the service time offered to the customers is comparatively better than the builder’s warranty. While builders’ warranty may take between 2-10 days to perform the repairs, home warranty providers can cover the same work within 48 hours.
  • Builder’s warranty is comparatively cheaper than extensive home warranties.
  • Home warranties cover many more aspects, systems, appliances, and items in your home than a builder’s warranty.
  • Unlike a builder’s warranty, a home warranty does not have exclusions to the coverage as the years pass by.

Conclusion

Try opting for a home warranty for your newly builder home to cover your appliances and systems. Remember, a builder’s warranty will only offer you restricted coverage. Instead, choose a home warranty that can reduce the financial burden in case you will need any repairs.

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