Home Warranty Education

Building a New House? Here’s How a New Construction Home Warranty Protects You

Written by Whitney Bennett

Every new construction home should have a home warranty.

Building a new home can be a smart way to get all the features of a home you want for less money than fixing up and existing home. Depending on the land, type of home, and internal features, building a new construction home can be cheaper than buying an existing house. But, no matter how much your home costs, you want to protect it from normal wear and tear! If you’re building or buying a newly built home, you should look into purchasing a special new construction home warranty plan.

How Does a New Construction Home Warranty Work?

The differences between a home warranty on a resale home and on a new construction home.

Click to download the full infographic.​​​​​​​

A home warranty is a bit like insurance for a home’s systems and appliances. When a home’s air conditioning or dishwasher unit begins to fail from old age and normal wear and tear, a homeowner with a home warranty plan can call their home warranty company and get the failed system or appliance repaired or replaced for much cheaper than they would have to pay out of pocket. Usually, a homeowner would just have to pay a small service call fee (between $60 and $70 depending on the plan) to have a professional come out to their home and diagnose the problem.

A new construction home warranty covers a home's systems and appliances for three years after closing.

In newly built homes, this home warranty plan works a bit differently. Home buyers can purchase a new construction warranty for newly built homes, which covers the same home systems and appliances if they break down due to a manufacturer error or from normal wear and tear. Home buyers can elect to purchase a home builder’s warranty, which covers the home’s systems and appliances for a year from closing. Usually, this type of warranty is included in the purchase price of a home from the builders. However, home buyers can also purchase a three-year new construction warranty, which begins a year from the date of closing and protects the home’s systems and appliances during years 2-5. Since most of the newly built home’s appliances will already be under manufacturer warranty for the first year, this builder’s warranty is a smart decision to protect against manufacturer error once the manufacturer warranty ends.

What Does a New Construction Home Warranty Cover?

A new construction home warranty covers a home's systems and appliances, just like a home warranty plan for a resale home.

Click to download the full infographic.

What a new construction warranty covers depends on the plan purchased. At the most basic level, a new construction warranty plan covers a home’s air conditioning, heating, electrical, and plumbing systems. It also covers a home’s oven, dishwasher, garbage disposal, and built-in microwave. Depending on the state and plan purchased, the warranty may also cover the home’s refrigerator, as well as the clothes washer and dryer.

Depending on the state, home buyers can upgrade their plans to cover items like no-fault coverage, which includes haul away and permits, as well as extra plumbing coverage.

Most importantly, a new construction home warranty covers a spring and fall tune-up for the home’s air conditioning and heating system. This tune-up helps to get the home’s air conditioner up and running in the spring and a home’s furnace warming the home in the fall. These tune-ups are preventative maintenance and can find small problems before they become large ones. They cost just the price of a service call fee, which is between $60-$70, depending on the new construction plan. You can learn more about spring tune-ups for air conditioners here and fall tune-ups for furnaces here.

How Much Does a Home Warranty Cost for a Newly Built Home?

A normal yearlong home warranty plan will cost a homeowner between $350-$550. The new construction home warranty, which is three years of coverage that begins a year after closing, will run a home buyer about $200 more than the normal plan per year, depending on the level of coverage purchased.

When opening a service request on a failed system or appliance, or just opening a request for a spring or fall tune-up, homeowners will only spend between $60-$70.

How Can a New Construction Home Warranty Protect You?

If you are purchasing a newly built home, a new construction home warranty plan can protect your investment. Forbes says that having a home warranty after purchasing a newly built home is an excellent purchase, as it can protect against defective parts of a home’s systems and appliances. Often these problems aren’t apparent when getting an inspection or when walking through the home and don’t crop up until a few years down the line. For more information, or if you are interested in purchasing a new construction plan for yourself or your home buyers, go to www.landmarkhw.com/home-buyers-warranty and get started.

Why a new construction home needs a home warranty plan.

Click to download the full infographic.

Home Warranty Education

Everything you need to know about what a home warranty is, how it works and what it covers. Real estate professionals: use these articles to help your clients!

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