40 years of offering new home warranties is a long time. But even after all those years, some builders are still asking "Why Does a New Home Warranty Matter?"
Wondering “WHAT IF...” about the things you can’t see, like the rafters, beams, or mechanical systems? With a new home warranty, you’ll have peace of mind knowing your home is protected long after the sale.
A new home purchase is one of the most exciting and biggest investments a person will make. As a savvy homebuyer, you’ll want assurance your new home will stand the test of time.
But is a third-party expressed written warranty really necessary? The simple answer is yes! A new home warranty can be a lifesaver if an unforeseen problem occurs. Without warranty coverage, a Major Structural Defect can siphon your emergency fund, devour your time and energy, and conceivably end up in litigation. In addition to coverage for Major Structural Defects, warranty programs may include workmanship and materials coverages for a specified period of time.
If a builder chooses to include a written and insured warranty on your home, you can breathe a sigh of relief knowing there is a safety net in place should a warranted defect arise. This is your assurance that your home was built by a qualified professional and your home will be protected.
BUILDERS MUST MEASURE UP
Every builder who offers a warranty should first meet stringent criteria by the warranty company. Potential builders may be examined (and reviewed yearly) for financial stability, customer satisfaction, and technical competence; plus they must comply with specific construction standards in order to warrant their homes. This ensures that not just any fly-by-night builder will hold your future in his hands. Builders should be able to provide you with written material on the warranty they include on the homes they build.
PROTECTION
Builders pride themselves with quality craftsmanship and skill, but from time to time construction defects do happen in spite of the builder’s best efforts. The average cost to repair a major structural failure exceeds $30,000. These types of defects usually are not covered by a homeowner’s insurance policy. Having a written and insured warranty in place on your home means that covered defects in warranted structural components will be repaired by the Insurer rather than you, personally.
SECURITY
Even excellent builders can fall short financially for reasons beyond their control. In the event that a builder would go out of business or file for bankruptcy, a warranty backed by a reputable insurer, will step in to cover the builder’s obligations. Regardless of what the future may hold for your builder, the warranty marches on.
Speaking of stability, what about the Insurer’s strength and dependability? Be sure warranties are insured by a company that specializes and writes warranties and insurance for builders only. That means you don’t have to worry about the insurer going out of business because of catastrophic losses such as hurricanes, etc.
EXPERT SECOND OPINION
Despite the written warranty, sometimes builders and homeowners don’t always see eye-to-eye. If an impasse should emerge between you and your builder regarding whether or not something should be considered a defect, the limited warranty document can be a valuable ‘measuring stick’ for evaluating the issues. The homeowner, builder and warranty company all have clearly defined responsibilities which are outlined in the book provided for your home. A third-party warranty is an excellent unbiased tool to reference in customer service discussions. In fact, a dispute resolution process should include free mediation between the builder and homeowner. (If needed, formal binding arbitration.)
RESALE VALUE
Decided to move? No problem. If you sell your home within the duration of the warranty period, the balance of the warranty should automatically transfer to the next homeowner. This is an excellent sales tool while your home is on the market. It gives your home the upper hand over other homes for sale in your neighborhood.
*Review specific warranty provided by your builder for exact terms of your coverage.
About Residential Warranty Company
Residential Warranty Company, LLC is one of the nation’s oldest and largest providers of written insured new home warranties, providing homeowners with a strong foundation of security for their home. Understanding that just one warranty rarely meets everyone’s needs, RWC has created a “menu” of home warranties & services through a network of affiliated companies. The result is comprehensive coverage and effective risk management for the greatest long term stability. Builder warranties issued by RWC are insured by Western Pacific Mutual Insurance Company, A Risk Retention Group (WPMIC). WPMIC is rated “A- (Excellent)” by A.M. Best and has $112 million in surplus equity as of Dec. 31, 2019. RWC’s goal is to provide a level of security to homeowners and Builders alike and has devoted three decades to that purpose across the country. Being able to provide a variety of services to our customers is the result of much hard work and due diligence along the way. Over the years, RWC has expanded and now offers an ever-increasing array of products and services to both homeowners and the home building industry. RWC has established itself as a rock solid leader in providing new home warranty protection. The appeal of our program is that when you become part of one of the companies in the RWC “Family”, you benefit from 40 years of leadership and experience that is unrivaled in the home warranty industry.
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