What is Home Warranty?

The term home warranty is also used by new-home builders and remodeling contractors to insure the foundation and structure of their projects.
Unfortunately, the new-home warranty industry has had a lot of abuses and bad press. It has even has been the target of Congressional hearings. Many of these problems have come from builders ‘‘self-insuring’’ their warranties and homebuyers not insisting that everything be in writing. It’s important to realize that in the end a warranty is only as good as the company behind it. If the contractor goes belly-up, you’re left holding the bag. To prevent this, it’s a good idea to involve a third party insurer who backs up the builder’s warranty. One such company, Home Warranty Corporation, has provided new-home warranty protection for more than two decades.
For remodelers, the Home Owners Warranty (HOW) Remodelers Program offers a oneyear policy against faulty workmanship and materials, and from three to ten years’ coverage of major structural components. Under this coverage, you still deal with the contractor, but if there’s a problem, HOW is there to back up the warranty. When you’re dealing with a contractor or builder: (1) Make sure the warranty spells out clearly all the terms, conditions, and limits of your agreement. (2) Chisel in stone: If it isn’t in writing—it doesn’t exist! (3) Even if it costs you extra to have a third party guarantee the warranty, it’s usually worth it to you for peace of mind.