Home Warranty vs. Builder's Warranty
Also known as: Home Service Contract, Home Protection Plan
A home warranty (or home service contract) is a separate product you can purchase that covers repairs to home systems and appliances after the builder's warranty expires. It is different from the builder's warranty that comes with your new home.
Detailed Explanation
A builder's warranty is included with your new home and covers construction defects — issues with how the home was built. It typically lasts 1-10 years depending on the type of defect.
A home warranty (home service contract) is a separate product you can purchase that covers the repair or replacement of home systems and appliances when they break down from normal wear and tear. It typically costs $300-$600 per year with a service call fee of $75-$125.
The two products serve different purposes: the builder's warranty covers defects in construction, while a home warranty covers breakdowns from normal use. They can complement each other, especially as builder warranty periods expire.
In Your Contract
The builder's warranty is part of your purchase agreement. A home warranty is a separate product you purchase independently. Some builders include a complimentary first-year home warranty as a closing incentive.
Key Points
- 1Builder's warranty: covers construction defects, included with the home.
- 2Home warranty: covers breakdowns from normal use, purchased separately.
- 3Home warranties cost $300-$600 per year with per-visit service fees.
- 4Consider a home warranty after your builder's workmanship warranty (1 year) expires.
- 5Read the home warranty coverage terms and exclusions carefully.
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