How Important Is Home Warranty Insurance

Most people assume that when you are buying a new housing product, it is built to a high standard. After all, it's a multi billion dollar industry that is regulated by multiple levels of government. And it's also backed by a 2-5-10 warranty, which should provide some basic level of protection.

What Does The 2 Stand For

The 2 year part of the warranty protects everything that is inside of the property, and the labour and materials to fix any said issues. An example would any sort of delivery system that becomes inoperational during the 1st two years. So if your hot water heater stops working, this would be covered under warranty.

Another example could be if a door comes off a hinge. Technically, this is the builders responsibility to repair and replace within the 1st two years. Another example would be if a window stops opening and closing.

What Does The 5 Stand For

The 5 year part of the warranty covers the exterior for water penetration. A few examples could be if the rainscreen technology on the exterior of the building is faulty or if the roof is designed is an ineffective way so it is not repelling rain as it falls.

Water penetration can cause rot, which in turn can cause mould. Mould is a cause of respiratory illness and most people would want to avoid having it around at all costs. This becomes especially true when you are buying a newly built home.

What Does The 10 Stand For

The 10 year part of the warranty provides coverage for the foundation of the property. This wouldn't be relevant if you didn't maintain the property properly. A good example of this would be if you don't regularly maintain the gutters. If you don't maintain the gutters this can cause drips from a specific location, which in turn can cause cracks in your foundation.

If you have maintained the home to a good standard and there are issues with the foundation, it can be quite difficult to prove this is a violation of the home warranty. You'll need to contact various professionals and build a case against the warranty provider and builder.

There are multiple companies that offer home warranty insurance regulated by the provincial government. But they do have different standards on what level of builder they offer this insurance. It's best to do your research on the warranty company and the builder.

Buying a new property can be very exciting. But there are certain pitfalls you'll want to avoid. You'll want to purchase a house from a reputable builder, which you can usually find quite a bit of information about online. An old fashioned way of confirming this would be to go knock on the door of someone who has purchased a home from this builder previously. A little due diligence can go a long way.