Buying a home is one of the most significant investments people will make in their lives. That is why home warranty insurance is an integral part of buying a home, whether it is brand new, a resale home that still has home warranty coverage, or part of a strata plan. Home warranty insurance gives you financial security against risks you cannot control. Here are a few things buyers should keep in mind when looking to build or purchase a new home:
Know Your Warranty Provider
Make sure you know who your warranty provider is. Find out by asking your builder, looking for a sticker on the electrical box, or visiting BC Housing’s online New Homes Registry. The warranty provider issues a home warranty insurance policy when the home is completed or occupied.
Understand Your Coverage
The provincial government set in place a 2-5-10 New Home Warranty Program. This insurance protects homeowners from a range of construction defects for designated periods of time: two years on labour and materials, five years on the building envelope, including water penetration, and 10 years on the structure.
If your new home is included in a strata plan, the home warranty insurance will provide coverage for your unit, plus separate coverage for the common property. For this reason, it is crucial for unit owners to take the time to gain an understanding of the difference between the common property and what is unique to the individual unit being purchased.
Read the Fine Print
Always review the fine print of your policy. A few exclusions your policy may include are design, materials; labour supplied by the owner or by someone other than the builder, its workers or sub-trades; landscaping; issues arising from the use of the home for non-residential purposes; or failure of the homeowner to prevent or minimize damage.
Talk to Your Builder
Some builders may offer additional warranties. Even though the government does not regulate these warranties, they must be enforced like any other contract, so be sure to get any builder warranties in writing. These warranties may be in the name of the builder, so find out if you need to have copies of the manufacturer warranties transferred to you.
Once your new home is complete, your builder or warranty provider should give you a home maintenance manual advising how mechanical systems work, where to find controls and a maintenance schedule to help protect and maintain the home. Don’t forget – your warranty insurance coverage is conditional on the proper maintenance of your home being carried out according to this manual and the minimization of further damages.
Be sure to visit the GVHBA consumer blogs to review BC Housing’s guide and checklist to understanding and protecting your home warranty coverage. You can also attend the GVHBA Homebuyer Form on Wednesday, March 7, 2018, where you will gain access to market knowledge from industry experts, not readily found on the internet. To register, visit gvhba.org/event/homebuyer-forum.