Builder warranty versus home warranty: What’s the difference?
When purchasing a house, you may hear a lot about various warranties that can protect your home from repairs. Depending on the property’s age, a builder’s home warranty, often provided for new homes, is a smart idea. A home warranty (you’ll notice there’s no mention of builders) is slightly different. Both provide a home protection plan, but it’s all about the details.
The quickest summary of a builder warranty vs a home warranty is that the builder’s warranty is for new or newly refabricated homes. It covers all the basics for six months to two years, and its coverage changes from builder to builder. You can purchase a home warranty for any home, and you determine coverage for your specific needs. Home warranties can be purchased anytime and last as long as the client pays the premiums.
Builder warranties and home warranties
A strong warranty can give you great peace of mind. The builder’s warranty won’t be available if you buy an older home. If the home is new (or newly refabricated), your coverage options and similar terms for these two warranties can get confusing.
There are three types of home coverage you’ll want to know. The first is home insurance. This one is mandatory for home ownership and covers emergencies like floods, fires, trees falling through the roof, and other mishaps. If something goes wrong, your home insurance covers the damage. That’s why all homes need homeowner’s insurance.
If your home is new, odds are you’ll have a builder warranty that comes with the home. This builder warranty is mandatory in most states (though not all) and temporarily covers the home’s basics. This option could be the home’s systems — such as plumbing, electrical, or HVAC, or it could be as important as the home’s structure. Every home warranty for builders is different and can cover 6 months to 2 years.
A home warranty – which you’ll notice doesn’t have the word builder attached – is a warranty you can purchase at any time for a home of any age. You can choose how much or how little coverage you want. Home warranties cost a monthly or yearly premium. Your coverage differs from insurance – a warranty covers the repairs instead of covering the cost of damage when something goes wrong. If your furnace breaks down, your warranty will fix it.
The home builder warranty and the home warranty are very similar. The builder warranty comes with a new home and, therefore, doesn’t cost monthly premiums for upkeep. Its coverage may be extensive, but only sometimes. You can supplement a builder’s warranty with a home warranty if there are aspects of the home you feel need added protection.
Home Builder Warranty
Keep in mind that not all home builder warranties are the same. Some may lack a lot of coverage, whereas others may be extensive. You’ll want to read yours carefully and ensure you understand it.
Major Structural Defects
This is one of the most important aspects of a builder’s home warranty. It covers the foundation, the roof framing, the load-bearing walls, masonry arches, and columns and floor systems. Faulty structural issues are expensive to fix and unsafe, so consider this a structural home warranty.
Home Systems
The major systems your home operates on include the HVAC, ductwork, electrical, and plumbing systems. The builder warranty will cover the repair or replacement cost if these systems break down.
Exterior Components
A builder’s warranty of exterior components includes windows, siding, shingles, garage doors, and maybe even paint (though it’s less common).
Workmanship
This is a bit hard to define, but if the home’s quality is below industry standards – like water getting in through the windows – it may be covered by a home warranty for builders.
Miscellaneous
Other covered aspects include the floors, drywall, landscaping, doors, carpentry, insulation, glass, and trim.
What Isn’t Covered
These warranties won’t cover household appliances or any defects arising from work the homeowner undertakes. The normal fading of paint, the average shrinking or expanding of the home, and insect damage are often not covered by a builder’s warranty.
Home Warranty
The details of a home warranty differ from company to company and are frequently more customizable than a builder’s warranty. The client can choose how much coverage they want. With any home warranty, you’ll want to know what’s covered in addition to the fine print.
Large Home Systems
Your home warranty will cover your major home systems if something breaks. This option includes the ductwork, HVAC, electrical, and plumbing systems. Remember – if a pipe bursts in your home, insurance pays for the damage caused by the flood, while the home warranty covers the repair of the leaking pipe.
Small Home Systems
Many more taken-for-granted components keep a home going. These elements could include the garbage disposal, water heater, smoke detectors, central vacuum system, doorbell, and ceiling fans.
Appliances
Your stove, oven, refrigerator, dishwasher, and laundry machines are all covered by a home protection plan. Garage door openers, trash compactors, and other appliances may also be covered.
Potential Add-Ons
While not standard, most home warranties offer add-ons for other significant areas of the home that may apply to you. This option would include spa equipment and swimming pools, limited roof leaks, well pumps, and guest units. It could cover HVAC pre-seasonal maintenance, pest control, and rekey services. If you have a septic system, most warranties will have an add-on that covers it.
What Isn’t Covered
Most home warranties don’t cover pre-existing conditions when you move into the home. If something is installed or badly maintained, the resulting damage won’t be covered by a home warranty. If an appliance is misused, it won’t be covered. Cosmetic issues around the home also won’t be covered by a home warranty.
The difference between a homebuilder warranty and a home warranty
When you want to look at a builder warranty vs a home warranty, comparing the coverages makes the differences clear. Both will cover the major home systems — such as plumbing, electrical, and HVAC systems (and ductwork).
The Builders Warranty Exclusives
The builders’ warranty covers the major structural components of a home, while home warranties do not. This is usually because builder warranties provide a ten-year warranty for these systems.
Builder warranties also cover the quality of the build plus many external components — such as windows, garage doors, roofing, and siding. It may protect landscaping, floors, trims, and drywall as well.
The Home Warranty Exclusives
The home warranty covers appliances and many smaller systems within the home. These could include the central vacuum system, garbage disposal, etc. Add-ons for home warranties can protect pools and spas, roof leakages, and septic systems.
Builder Warranty versus Home Warranty
A builder warranty covers the home and only the major systems that keep that home running. If you have any problems with a new home, it is likely to be covered by a builder warranty. A home warranty overlaps in its coverage of the major systems but goes a step further by covering all the smaller systems that bring comfort to a home — like dishwashers and laundry machines.
Think of it like this – a builder warranty will guarantee the aspects of the home they built. A home warranty will cover all the pieces that can break down or fail at some point. A home warranty knows that everything breaks down; it’s just a matter of when. Home insurance covers damage caused when things go wrong (such as a flood or fire) but won’t replace the failed systems.
The home warranty, builders warranty, and home insurance can be confusing – especially if you’re learning about all three simultaneously. The builder warranty is for the home you built. This fact means the walls, structure, roof, floors, trim, and the systems that run the home — including heat, AC, plumbing, and electrical.
A home warranty covers all aspects that make your home comfortable. This package includes HVAC, plumbing, and electrical, but more beyond that. Appliances, such as the oven and stove, fridge, washer and dryer, dishwasher, and even some built-in microwaves, are also part of this.
A couple of differences to be aware of:
You cannot extend a builder warranty, whereas a home warranty can be extended as long as you like.
A builder warranty will only be applied to a new home, whereas a home warranty can be purchased anytime for any home.
Knowing the details about these coverage plans will set you and your home up for long-term success.
