When it comes to protecting your brand-new home, one of the best investments you can make is getting a New Home Warranty.
A New Home Warranty is an insurance-backed warranty product that covers any structural defects and failure of certain components in a newly built or newly purchased home. It provides additional protection from the potential costs of expensive repairs and replacements due to these defects.
This article will help answer some frequently asked questions about New Home Warranty and explain the benefits and costs associated with them.
What is New Home Warranty?
A New Home Warranty is a policy that covers defects and failure of certain components in newly built or newly purchased homes. Depending on the specific policy, New Home Warranty covers things such as heating, ventilation, and air conditioning systems, electrical systems, plumbing, countertops, flooring, roofing, and more. It also covers structural and water infiltration issues, which can cause major headaches down the line.
Essentially, the warranty provides assurance that the home’s components will last and function correctly throughout the warranty period.
How much does New Home Warranty Cost?
The cost of New Home Warranty varies depending on the type of coverage and length of the warranty. Generally, a one-year warranty costs around 0.8% of the home’s purchase price, but can range from 0.5% to 1.25%. These percentages will apply to any houses built in the same year.
For example, if the house you are buying was built in 2020, any warranty policies for that house in 2021 will be calculated on the basis of the purchase price for the 2020 house.
What is Covered Under New Home Warranty?
The type of coverage you get from a New Home Warranty depends on the specific policy you choose. Generally, most warranties cover things like the structure of the house, the electrical, plumbing, and heating systems, countertops, flooring, and roofing. They can also cover things like appliances, decks, patios, and landscaping. Most warranties also include a few non-structural items, such as windows, doors, and trim.
Additionally, some warranties also cover major systems that require professional maintenance, such as septic tanks and swimming pools.
When does warranty coverage start?
When a homeowner purchases a newly built or newly purchased home, the warranty coverage begins on the day that ownership is transferred from the seller to the buyer. This means that any structural defects and failures of certain components found in this period are covered under the policy and can be repaired or replaced without the homeowner having to pay out of pocket. The coverage usually continues until the warranty period expires, which is usually one year or longer, depending on the type of policy chosen.
Ultimately, a New Home Warranty is a great way to protect your newly built or purchased home and save money in the long run. It provides peace of mind knowing that expensive repairs and replacements due to structural or system defects are covered. Furthermore, the cost of the warranty usually amounts to less than 1% of the purchase price, so it’s an inexpensive way to protect your brand-new home.