Home Builder’s Warranty: Definition, Coverage, and When It’s Needed

Key takeaways:

• A builder warranty covers repairs due to non-code-compliant work or defective materials, including foundational defects, major systems like HVAC, and craftsmanship.
• Builder warranties typically use a 1-2-10 format, with one year for craftsmanship, two years for systems like plumbing and electrical, and ten years for structural defects.
• Builder warranties address issues from poor craftsmanship or building defects, while home warranties cover appliance and system repairs due to wear and tear.
• A builder's warranty is essential, especially given the potential use of inexperienced labor, protecting new constructions at no extra cost.
• Improper maintenance, unauthorized repairs, or unclaimed replacements can void a builder warranty, underscoring the need to follow warranty guidelines.

Did you know that from 2019 through 2023, an average of 991,560 new privately owned housing units were built annually in the U.S.? Yes, that’s nearly 1 million new homes per year!

For most, buying a home is one of the most important and expensive purchases. Protecting this significant investment should be a high priority. Whether you are building new construction or remodeling extensively, it is important to know the insurance and warranty options that may help you protect your home – with a builder’s warranty being one of those options.

What is a builder’s warranty?

Most new constructions come with a builder's warranty that the builder funds themselves or through a third-party company. The builder might incorporate the cost into the price of the home, but you won’t have any monthly fees to worry about here.

What is covered in a builder's warranty?

Although builder’s warranty plans can differ, some of the things that you can expect to be covered in most are:

Foundational defects

Components that affect the home's safety, like load-bearing walls, roof framing, masonry arches, columns and floor systems, are usually included. Structural warranties are among the most important to have since they are not only expensive but can also be potentially life-threatening.

Exterior components

The warranty covers many items on the house's exterior, like siding, shingle roofing, windows, garage doors and sometimes paint.

Home systems

The major systems of a new home are typically protected, including HVAC units, ductwork, plumbing and the electrical system.

Craftsmanship

If the craftsmanship in the home's construction is below industry standards, the warranty might cover repairs. For example, if the builder installs flooring and it doesn’t allow for proper spacing, warped floors could be covered by the builder's warranty.

Some specific fixtures typically covered by a new construction include:

• Windows
• Doors
• Trim
• Floors
• Drywall
• Glass
• Septic system
• Landscaping
• Carpentry
• Insulation

It is important to remember that your warranty will vary by house and builder. Ask your builder or provider for a detailed list of covered items.

How long do builder warranties last?

Like home warranty plans, builders' warranties are regulated at the state level, so coverages and lengths can differ based on location. However, most builders warranties use a format referred to as 1-2-10.

According to ConsumerAffairs, the length of coverage varies by the specific component being covered. Here is what we mean:

One year

Most elements of new construction are only covered for one year. For example, most warranties on siding, stucco, doors, trim and drywall are only covered for one year.

Two years

Coverage for HVAC, plumbing and electrical systems is generally two years.

Ten years

Many builders offer coverage for up to 10 years for “major structural defects,” typically defined as defects that make the home unsafe.

What is a home warranty?

Home warranty coverage is a service agreement between a homeowner and a company that states the company will help cover the repair and maintenance costs of home systems and appliances for a given period.

Often confused with homeowners insurance, a home warranty plan isn’t mandatory but is an excellent way to help protect your budget and provide added peace of mind.

What’s the difference between a home warranty and a builder’s warranty?

A builder warranty offers protection against damage caused from poor craftsmanship or building defects.

Meanwhile, a home warranty plan helps you avoid unexpected expenses for repairs and replacements on covered household appliances and systems due to normal wear and tear. This may include your microwave, refrigerator, washer, dryer and HVAC. When these things break down and stop working, you’ll know exactly who to call to fix it and you won’t have to worry about paying hefty repair bills.

There can be an overlap between the two, but in most cases, there are differences between builder’s and existing home warranty plans.

Do you need a home builder's warranty on new construction?

According to ABC News, the United States has a construction worker shortage that has exceeded half a million. With the growing number of new buildings being built around the country, there’s an increased risk of less experienced workers being employed in constructing your home.

Although a builder’s warranty is not mandatory, it is an important to protect your home from faulty craftsmanship. Also, since most home builders offer this protection on their new buildings, it is protection that you can typically have access to without paying any additional fee. Considering this, requesting home builders' coverage from your builders if you are constructing a new home may be a good idea.

Choosing a builder's warranty that fits your needs

Knowing the available coverage options for everything from home warranties to homeowners insurance is essential. When it comes to a builder warranty, the person building your home often provides this. Even though you are not shopping around for a builder warranty the way you would for the right home warranty plan or homeowners' insurance company, you still have some say in the length of coverage and the specifics of your builder warranty. Do not be afraid to ask questions regarding what’s covered and for how long.

What can void a builder warranty?

Now that we have explained what a builder warranty is and why it’s important, let’s go over some things you shouldn’t do if you want to keep it.

You can void a builder warranty by:

• Ignoring the required maintenance needed on items
• Completing repairs on your own and doing more damage
• Attempting to replace a defective item or system without making a claim

In summary, make sure that you’re patient when things need repair and follow the right process to maintain your builder's warranty.

Need home warranty* protection?

If you’re in the market for home warranty plan for a new home, don’t hesitate to contact us here at Cinch Home Services. A home warranty plan can provide peace of mind and may help you save money on repairs.  

Click here to learn more and find a home protection plan that’s right for you. 

* The product being offered is a service contract and is separate and distinct from any product or service warranty which may be provided by the home builder or manufacturer.

*The information in this blog library is intended to provide general guidance on home warranties, and on the proper maintenance and care of systems and appliances in the home. Not all of the topics mentioned are covered by our home warranty or maintenance plans. Please review your home warranty contract carefully to understand your coverage.

*Our blog library may link to third-party sites that offer products, services, coaches, consultants, and/or experts. Any such link is provided for reference only and not intended as an endorsement or statement that the information provided by the other party is accurate. We are not compensated for any products or services purchased from these third-party links.